Vacheron Constantin, Chopard, Piaget and Pucci comprise the recent club of brands to close operations of their respective boutiques in DLF Emporio, compelling one to take stock of the market sentiment which could be telling otherwise than the past reports of expanding luxury retail in India
The luxury market in India, for all the talk of expansion and growth, has also been witnessing a slow exit of luxe brands, or of franchises closing down. As per the Goldman Sachs research report — The Asian Consumer — India Consumer Close-up – the growth of luxury and high-end, in general, will be limited as, culturally, India’s affluent consumers tend to shy away from ostentatious display of wealth, and the urban masses tend to go for brands offering incremental value, and not so much aspirational. While reports stated that the luxury market in India has been growing at a CAGR of 25 per cent over the last couple of years and has been estimated at $14.7 billion, the complex consumer psyche is a force to reckon with, in itself. Because even as the number of high net worth individuals increases, and Indian business men find their place in the global big league, the sentiment towards spending on premium goods might hold sway but when it comes to luxury goods, priced more here than offshores, the mindset changes as value luxury and discounts become crucial to the scheme of things, also taking down the instances of repeat purchasing, even among the HNIs.
So, even as there is a positive curve witnessed by upscale designer brands working out market entry into India, there’s also the corresponding trend of boutiques shutting operation or reducing the number of stores and square metres. Taking the case in point of DLF Emporio, in Delhi NCR, the region which is leading luxury good consumption in India, followed by the cities of Mumbai, Bengaluru and others like Chandigarh and Ahmedabad, we have had brands exiting with one such being Alfred Dunhill, which shut all its three outlets in India, run through a franchise deal with Brand House Retail.
A slowdown in the economic climate, and low consumption, both led to this decision
A slowdown in the economic climate, and low consumption, both led to this decision. While this is one such, there’s also the case of coming across boutiques, which could have been functioning a week back, now witnessing closed shutters or construction inside. One such instance is that of the Pucci boutique, situated near one of the entrances on the ground floor of DLF Emporio, which has folded up operations, and the store space to be occupied then by an existing brand, shifting shops within the mall.
Reports suggest fragrance, jewellery, and watch brands being the top tier grossers, but then there are three cases of brand exits which go contrary to this. International luxury watch brands like Piaget, Chopard, and Vacheron Constantin have all closed their respective boutiques in DLF Emporio, over a period of some months, within the last year.
Notable names like Murjani Group are exiting the luxury space to focus on premium brands, so that Jimmy Choo is now part of Genesis Colours
Following close is also the change of hands between brands and franchises, with notable names like Murjani Group exiting the luxury space to focus on premium brands, so that Jimmy Choo is now part of Genesis Colours. And then there’s also the case of luxury brands winding up multi city operations and staying invested in only one location, thereby curtailing expansion plans, for example, Bottega Veneta, which shut shop in Mumbai and opened in Delhi within the same month.
With the above predicating a somewhat grim sentiment in the luxury landscape, there’s also a silver lining to consider, which pertains to recent FDI regulations allowing for brands like Hermes and Longchamp to open shop in India. Also, poised for market entry are brands like Kate Spade which have found DLF Emporio to be their natural launchpad.
There’s also a silver lining to consider, which pertains to recent FDI regulations allowing for brands like Hermes and Longchamp to open shop in India
But even with luxury brands testing waters, DLF’s own retail arm, DLF Brands has exited the luxury fashion business, parting ways with Salvatore Ferragamo, Giorgio Armani and even shutting down couple of DKNY stores, to focus on the mass apparel market in India, thereby setting a tone which could be the defining one in times that are beset with shifting trends and consumer sentiments, especially when it comes to high end luxury.
