14 DEC, 2011, 01.

40AM IST, RAVI TEJA SHARMA,ET BUREAU FDI in retail: 30% sourcing from small-scale sector restricts luxury brands

NEW DELHI: The Indian government may be mulling to allow 100% FDI in single brand retail, but the stipulation of 30% sourcing from the small-scale sector might be the spoiler for luxury brands in the country. Luxury houses find this clause restrictive. Ravi Thakran, group president, South, Southeast Asia and West Asia at French luxury house LVMH, said that a number of their brands, which operate through separate joint ventures, would like to increase their stake. But they will have to stick to only 51% for now because of the mandatory 30% local sourcing clause, which is seen as a hindrance. The mandatory clause will make it very difficult for any brand to comply with such a condition. "It is going to be a challenge for most brands. I don't know if brands will change their global manufacturing processes for India," said Sanjay Kapoor, managing director of Genesis Luxury, the joint venture partner of Burberry in India, which also represents other luxury brands like Canali, Jimmy Choo and Bottega Veneta. Abhay Gupta, executive director at Blues Clothing, that represents Versace in India, feels this will act as an indirect trade barrier for these companies. "There's only a limited range of inputs that could be sourced from India like embroidery, but luxury brands then should have products of that kind too," said Gupta. Burberry, for example, has very little manufacturing in India, for embroidery. The Indian luxury market is growing at 20% a year and is expected to grow to $14.7 billion by 2015, up from $5.8 billion today. But this size still doesn't measure up to countries like China. "The scale of the Indian market is small at the moment for it to make sense of the luxury brands to start manufacturing in India, only for India," said Neelesh Hundekari, principal at consulting firm AT Kearney. There are other issues as well like finding quality raw materials, workmanship and even intellectual property rights. "They will need to find the right vendors in India and train them but that will take a long time," said Hundekari. Many brands are also worried about exposing their IPR in India.

7 JAN, 2012, 05.33AM IST, MANSI TEWARI, Lack of trained salesmen may hit luxury sales

NEW DELHI: A mystery shopper recently did a round of some of the top retailers of luxury brands in south Delhi. At a couple of stores, no one opened the door for her, while at another, the staff was not fluent in English, and in yet another shop, the front-end staff had a sketchy idea of the product. The lady, who trains retail staff especially for uber luxury firms, was surprised, but not disappointed. "For me, this means more business, but for my clients this is not good news," she says, requesting anonymity. The good news about 100% FDI in single brand retail is that it will allow luxury good makers to ramp up in India; the bad news is there's a 30-40% shortage of staff already and this could worsen with the expansion. Arun Ramakrishnan has a tough job of training people to sell luxury watches. A sales manager at Tag Heuer, who also trains new recruits in the art of selling watches that cost Rs 1.5 lakh and above, says he encounters trainees who often ask questions like "why would anyone buy a Rs 1.5 lakh watch" and "what is luxury". "I have to first train them to understand luxury, the brand knowledge comes much later. It's tough to find people who already have that background and understand luxury," says Ramakrishnan, who himself was sent for training to Singapore and Switzerland when he started at Tag Heuer. The Indian luxury retail market is facing a manpower shortage of at least 30-40%, especially for front-end staff, which is the direct interface with customers, says Roohi Dmello, associate principal consultant, retail at recruitment firm ABC Consultants. Unlike other retail businesses, luxury retailers need well-educated, skilled workforce having good communication skills, a high level of presentability and customer centric approach. "There are no specialised training schools yet for luxury retail. We screen our people from related luxury brands and products and also consider the service sector like hospitality, airlines, premium to high street apparel brands and high end cosmetic brands and train them based on specific brand requirements," says Nikhil Mehra, vice-president, Genesis Luxury, the JV partner of Burberry in India, which also represents other luxury brands like Canali, Jimmy Choo and Bottega Veneta.

"Most people are not familiar with luxury brands. A company has to invest to train staff and ensure a recap course every month through online tests," says Manishi Sanwal, general manager, LVHM Watch & Jewellery India, which sells Tag Heuer watches. The Indian luxury market is growing at 20% a year and is expected to grow to $14.7 billion by 2015, up from $5.8 billion today. "International brands have been wanting to come in and do things their own way. With the recent news about 100% FDI in single brand retail creating hope amongst global brands it will act as a growth stimulant and remove supply constraints," said Neelesh Hundekari, principal at AT Kearney.

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For franchises like Blues Clothing, which represents Versace and other brands in India, training people is an additional cost burden. "First we need to find people and spend to train them and then also on retaining them as the attrition in the luxury industry is very high," says Abhay Gupta, executive director at Blues Clothing.

11 JAN, 2012, 03.11AM IST, SOBIA KHAN & SARAH JACOB,ET BUREAU Luxury brands like Kimaya Fashions, Hermes and others prefer heritage homes over fivestar hotels

BANGALORE: Heritage homes are fast becoming the favourite hunting grounds of luxury brands scouting forpremium retailing space in India, where suitable high-end malls are too few and the sales potential at five-star hotels is still uncertain. When designer wear brand Kimaya Fashionssearched for a store in Hyderabad, it settled on a 16,000-sq ft bungalow in the upscale Jubilee Hills, in a property with floor area nearly three times the size of its average outlets. French luxury brand Hermes also moved into a Victorian property in Mumbai's Horniman Circle to retail its popular Birkin bags. "It's not necessarily out of choice," says Pradeep Hirani, managing director of Kimaya Fashions, "This is the only way to expand presence in India because of the limited options." While luxury brands are aggressively looking to expand footprint, real estate developers have shied away from building high-end malls. So, instead of waiting for luxury infrastructure to develop, such companies are seeking out heritage properties. Multi-brand store Kitsch run by TSG International, which retails brands such as Alexander McQueen, Moschino and Stella McCartney, touched operational break-even in less than six months when it opened a standalone outlet in Mumbai's Kala Ghoda area. In contrast, its outlet at luxury mall DLF Emporio in New Delhi took over a year to do so. Besides turning to heritage homes, luxury brands are also beginning to share space with brands that are a notch lower in prestige sweepstakes. Industry observers say this is a smart move because Indian consumers may buy luxury products in one category and premium in others. "It is not a question of where but how many stores a luxury brand opens that dilute its brand value," says Amit Bagaria, chairman of retail planning consultancy Asipac Projects. Genesis Luxury, which has partnered brands such as Jimmy Choo and Bottega Veneta, experimented by opening a store for Italian menswear Canali at Mumbai's Palladium mall. "There were high risks of adjacencies," says Deepika Gehani, creative head of Genesis Luxury,

referring to neighbours such as DKNY and Zara, which are international brands but not classified as luxury. Internationally luxury brands always retail alongside those of similar positioning," says Gehani, but points out that the departure from strategy in India has worked. The Canali store at Palladium generated close to 100% higher sales within three months of launch than its outlet at JW Mariott in the same city. In Chennai, too, Genesis Luxury opted for Express Avenue, a mall which has a mix of brands such as Levi Strauss and Biba as well as the super-premium brand Diesel. While it opened a standalone outlet for Burberry, it clubbed its other brands under a format called Luxxe Box.

Or take Tag Heuer, the world's fourth-largest Swiss watch maker, which opened a 600-sq ft store in Bangalore's Phoenix Market City mall next to the Spanish premium brand Mango. "We need a flexible footprint to develop retail space," says Manishi Sanwal, general manager at LVMH watch & jewellery, which owns TAG Heuer. Higher footfalls have meant sales of 15

watches per month against 10 watches a month in hotels. Genesis Luxury's Gehani says the brand retains its exclusivity by not partnering high street brands in the mall for marketing promotions. Since luxury high streets such as New York's Fifth Avenue and Madison Avenue or London's Bond Street are absent in India, most luxury brands chose to open their outlets in five-star hotels. Real estate consulting firm Cushman & Wakefieldsays such hotels across cities such as Mumbai, Delhi and Bangalore account for as much as 80-90% of luxury retail space in the country. Footfalls have, however, been lower in hotels than in malls because most guests at hotels shop overseas and head for the restaurants and bars. Malls and standalone luxury outlets have been a comparatively bigger draw. While a luxury mall seeks rentals of 550-600 per sq ft, standalone outlets and malls with a mix of high street brands get offered up at half the cost. "Rentals are 10% of the sales of luxury brands globally and we are able to achieve that in India by experimenting with location," says Priya Sachdev, creative director and COO of TSG International. The cost of creating an ambience and generating footfalls per sq ft is however higher in a standalone property, says Hirani of Kimaya Fashions, which is planning to open a cafe, spa and art gallery at its Hyderabad outlet. The company will look at a similar model at its Habibullah Estate store, a heritage property in Lucknow. "It's not just about retailing a product. We are actually selling an ego massage or a great experience," says Hirani.

9 JAN, 2012, 01.16PM IST, SOBIA KHAN,ET BUREAU Louis Vuitton, Rolex redefining luxury with 'made-to-measure' products BANGALORE: Tailor-made, cut-to-fit suits and watches with one's name engraved on the dial are the new benchmarks of luxury for a growing club of rich Indians who happily spend up to 50% more money and wait up to two months to get their apparel and accessories customised. The demand for customisation covers niche products and services such as signature perfumes, personalised dials in watches, and name initials on handbags and T-shirts, helping luxury brands such as Brioni, Louis Vuitton, Paul & Shark, Rolex and Tag Heuer grow more than 20% in this segment during 2011. "Personalised service is all about showing that you have arrived in life," says Berry Singh, business head, Paul & Shark, an Italian luxury sportswear brand that operates in the country through Reliance Brands. "We have many first time discerning customers who are ready to pay premium to get the right fit product," he says. The brand allows customers to put their initials on their t-shirts and choose colour and design. It plans to introduce tailor-made jackets and pullovers in the 2012 fall-winter season. "The customisation is done in Italy and takes 60 days. It cost over 15% more than off the shelf products," says Singh. Customised services account for 15% of the $250-million, or aboutRs1,300-crore, luxury apparel and accessories market in the country, according to Technopak Advisors. Analysts expect customisation as a trend in luxury goods and services to catch on in the country. "The indulgence in these fancies is here to stay for the uber rich Indian, and will continue to rise in the times to come," says Technopak Advisors Vice-President-Apparel Operations Amit Gugnani. "There exists a huge opportunity for brands to encash upon the budding market," he adds. Italian luxury label Brioni, renowned for its suits stitched by hand by one of the 1,200 commissioned tailors in the little Southern Italian town of Penne, has 40% of its sales coming from bespoke service, says Brioni India Brand Manager Joseph Jacob. "Made-to-wear clothing is growing faster than our ready-to-wear segment," he says. A customised Brioni suit costs between Rs 3-12.5 lakh and takes more than six weeks to get stitched. It customers in India include Leela Hotels Chairman Captain C P Nair, Mahindra & Mahindra Vice-Chairman and Managing Director Anand Mahindraand Hiranandani Group MD Niranjan

Hiranandani.Louis Vuitton offers its client to select personalised initials, stripe patterns and colours to ensure that very few bags will ever be alike. LVMH had rolled out 200 pieces of limited edition Tag Heuer watches for the Airtel India Grand Prix Formula 1 race, priced Rs2 lakh each, and it was sold out in 10 days, according to LVMH Watch & Jewellery General Manager Manishi Sanwal. Swiss watch brand Rolex has seen growing demand for personalised dial made of mother of pearl and gold, which cost anywhere between Rs 70,000 and Rs 2.5 lakh. The company also offers engraving name or occasions on bracelet and case. A typical of the shelf Rolex watches starts at Rs2.5 lakh and can go up to Rs6 lakh, while a watch with personalised dial or engraving will cost 5-20% more. According to industry experts, bespoke apparel costs 25-50% more than off-the-shelf apparel in the luxury segment. The range starts from around $300, or about Rs 16,000, for a shirt from a luxury brand such as Ermenegildo Zegna, and about $4,000, or Rs 2, 00,000, for a suit.

12 JAN, 2012, 04.27PM IST, ET BUREAU 30% local sourcing for retailers can be tricky, say lawyers The self regulatory clause for foreign retailers and investors seeking to invest over 51% in single brand in India may prove to be a double edged sword as the onus of keeping track of their sourcing partner's accounts would be the retailer's liability, say eminent lawyers. According to the note issued by Department of Industrial Policy & Promotion, foreign companies willing to increase their stake beyond 51%, will have to mandatorily source 30% of the value of products from small industries and village and cottage industries, artisans and craftsmen. The small industries would be those which have a total investment in plant and machinery not exceeding $1.00 million (around Rs 5 crore), said the note. "While it is easier for the retailer to certify that they are in compliance of the local sourcing requirement, the clause also requires the statutory auditor to confirm its compliance in the annual accounts." says Shardul S Shroff, managing partner of Amarchand Mangaldas. "The liability for wrongly stating compliance in the annual accounts may open the company for potential prosecution for wrongdoings under the Companies Act 1956 as well as under FEMA. Statutory auditors will have to be more vigilant while stating the compliance in the annual accounts and must do their due diligence."" There are retailers like Hermes which already source textiles, designs and crafts for their

international operations in India, who would not face any significant disruption in their operations. Other companies which rely solely on imports may have to recast operations to comply with the local sourcing requirement. "For those single brand retailers who are getting their products manufactured locally, this will not be a problem, but for many whose goods are imported into India for sale, this will be a big issue," said Akil Hirani, managing partner at Majmudar & Company. Strangely, there are no databases or repositories where foreign companies can seek out information about artisans, craftsman, village and small industries and locating suitable vendors may prove to be a challenge. Also, the local sourcing requirement may encourage innovation by causing retailers to liaise and deal with craftsmen to procure products. The flip side however, is that it may impact the ethnic handloom and handicraft industry as they will become manufacturers for retailers rather than focusing on age-old traditional products. "While a local content requirement runs the risk of violating India's international obligations under GATT and TRIMS, it is important to note that a number of countries, ranging from Canada to China, have used local content requirements for many years as a method of spurring development of indigenous industry." said Rajiv Luthra, founder of Delhi-based law firm Luthra and Luthra. Many major companies house their brands and trademarks in subsidiaries, but if this condition is strictly interpreted (as is presently the case), they may not meet this condition even though they have complete control and ownership over the brand. "The conditions that this amendment is subject to, may dampen the initial enthusiasm." said Rabindra Jhunjhunwala, Senior Partner, Khaitan & Co. The ideal situation would have been to have no restrictions at all and to keep things simple. Not only would this have encouraged free trade, but it would have also given a level playing field to foreign single brand retailers, say industry experts. 18 JAN, 2012, 06.01AM IST, SAGAR MALVIYA & KAILASH BABAR,ET BUREAU Delhi airport emerges as the best retail location for luxury brands like Swarovski, M&S & Hidesign MUMBAI: Can you name the retail location in India from where Swarovski, Marks & Spencer, Samsonite, Hidesign and Kimaya all reported their best sales numbers last calendar? Not Khan Market or Select City Walk Mall in Delhi, not Linking Road or the Phoenix Mall in Mumbai; it's the Delhi airport. Indira Gandhi International Airport in the capital is the most lucrative retail location in the country, having generated sales of 5,000 per square feet per month in 2011, which is almost four

times higher than the second-best location. This figure includes sales from duty-free shops, but regular shops too are buzzing here. "Our ticket size at airport is double in value compared locations elsewhere," says Ruchita Sharma, marketing operation manager of high-end crystal products maker Swarovski's consumer goods business. The brand store at the T3 terminal of the Delhi airport ranks among its top stores by sales globally. Retailers are at a loss to explain why a place meant just for travelling let brands rake in more moolah than most shopping malls and high streets. Many of them are, in fact, surprised. A case in point is high-end fashion house Kimaya, which did not exactly expected hurried travellers to indulge in couture when it opened its outlet in the swanky international terminal in November last. Its promoter Pradeep Hirani says he had turned down offer to open a shop at the airport two times before saying yes the third time. "For us, it was more of exhibitional than commercial." Not any more. Today, Kimaya's airport store sales are much higher than its high street outlets at around 3,500 per sq ft every month. And Hirani regrets having opted for a revenue-sharing model-where the retailer pays a percentage of its sales as rental to the airport operator-instead of the high rentals the airport had quoted earlier.

So what makes Delhi airport the most profitable destination for brands? One reason is its sheer size. It is the largest and busiest airport in South Asia. More than 35 million passengers used it last year. It is the fourth largest retail hub in the country with sales of 1,200 crore in 2011 despite being ten times smaller than malls such as Ambience Mall in Gurgaon and Phoenix High Street in Mumbai. "For any retailer, sales-per-sq ft is the most important parameter while deciding on setting up their store," says Susil Dungarwal, chief mall mechanic at Beyond Squarefeet Advisory, a boutique mall consultancy firm. It reflects the profitability of an outlet as the persquare feet cost is comparable in most prime locations in metros. Premium leather accessory brand Hidesign mopped up over 10,000 per sq ft per month on an average against 1,500-6,000 elsewhere, while Samsonite generated sales of 7,200 from the Delhi airport store compared to 1,350 in other stores.

23 JAN, 2012, 10.40AM IST, SAMIDHA SHARMA & BOBY KURIAN,TNN LVMH co Sephora set for India foray

MUMBAI: French luxury goods conglomerate Moet Hennessy Louis Vuitton SA (LVMH) is likely to clinch a multi-brand retail deal with New Delhi-based Genesis Luxury Fashion, in which the former's private equity arm L Capital holds a significant minority stake. Genesis Luxury is expected to open doors for LVMH's subsidiary Sephora, a multi-brand beauty and personal care retailer, with a licensing deal as talks failed with other contenders like Reliance Retail and Parcos, said two separate sources familiar with the matter. LVMH is finalizing plans for Sephora a little over a month after India deferred foreign direct investment (FDI) in multi-brand retail. The 20-billion-euro luxury group's discussion with Genesis also signals its deepening ties with the Indian company after L Capital last year picked up 25.5% equity in the Sanjay Kapoorowned firm, which operates single-brand stores Just Cavalli, Canali, Paul Smith and Jimmy Choo. LVMH has independent operations of its flagship Louis Vuitton stores in the country. When contacted by TOI, a spokesperson for Genesis Luxury Fashion declined comment on its partnership with LVMH to bring Sephora to India, adding they would talk about their plans in time. Industry observers said Sephora's deal-making with Genesis would be innovative following the L Capital investment in the latter. L Capital is sponsored by LVMH and Groupe Arnault-the private holding company of business tycoon and LVMH chairman Bernard Arnault-managing assets worth over 900 million euros. The Sephora stores are likely to open by end of this year offering cosmetic, skin care, fragrance, bath and body, hair care across multiple brands. The retail chain also has a hugely popular private label brand in its name which is moderately priced as well as a strong online presence across markets. Sephora has over 1,200 stores globally. LVMH has been scouting for a partner to unfurl its multibrand retail operations in India, and had held discussions with multiple suitors, including Reliance Retail, a part of India's largest private sector companyReliance Industries. One of the sources mentioned earlier said LVMH always seeks control over retail operations, and would have preferred Genesis given its existing investment ties. This would also provide the group enough flexibility to expand Sephora's India business.

Sephora and DFS (a dutyfree store chain) are the two multi-brand retail businesses of LVMH. The Paris-based group is betting big on the potential of its multi-brand channels in emerging markets like India. DFS has been in talks with the country's swanky new airports to start operations. The Indian beauty retail market is largely unorganized with department store chain such as Shoppers Stop and Lifestyle offering shop-in-shop outlets for most of the high-end

brands operating in the segment. "The key challenges facing the industry are low consumer awareness, limited supply side push and product, infrastructure/retail channel availability. This is where a multi-brand outlet which offers a plethora of choices has a huge potential to succeed," said Neelesh Hundekari, principal at consulting firm AT Kearney. An AT Kearney-CII report on the luxury market said the personal care segment in India is estimated at $280 million as of 2010 and growing at 22%. Typically, a female consumer dominated market in other countries, with a significant share of cosmetics and skin care, the Indian market stands out for its fragrance domination. Not just a cosmetic deal

French giant LVMH's PE arm L Capital holds 25.5% stake in Genesis Luxury, which operates singlebrand stores Just Cavalli, Canali, Paul Smith & Jimmy Choo LVMH's subsidiary Sephora is a multi-brand beauty and personal care retailer

Sephora stores are likely to open by this year-end, offering cosmetics, skin care, fragrances, bath & body and hair care across multiple brands

23 JAN, 2012, 10.08AM IST, RAVI TEJA SHARMA,ET BUREAU Canali buys 51% stake in Genesis JV

NEW DELHI: Italian luxury brand Canali has picked up 51% stake to form a joint venture with its Indian franchise, Genesis Luxury Fashion, two persons familiar with the matter said. Though Canali had the option to set up a wholly-owned subsidiary, following the government's decision last month to allow 100% foreign direct investment in single-brand retail, it has opted to stick to the previous ceiling. A higher shareholding would have required it to mandatorily source 30% of its products from Indian small and medium enterprises, the persons quoted earlier explained. Small and medium enterprises are defined as companies that have a total investment in plant and machinery not exceeding $1 million.

A Genesis Luxury Fashion spokesperson declined to comment on the JV plan, which is awaiting the government's clearance. Canali is the first luxury brand to invest in India since the government removed the cap for foreign companies. Genesis, a franchise for several global luxury brands, has been operating five Canali stores in India - two in the National Capital Region, at the DLF Emporio Mall and at the Oberoi hotel in Gurgaon, and one each in Mumbai's Palladium mall, Hyderabad's Taj Krishna hotel and Bangalore's UB City mall. "Canali is bullish about India and it might also venture into some of the smaller cities if good retail infrastructure comes up there," an industry expert, who works with various global luxury brands, said on condition of anonymity. Global brands are increasingly eyeing India where the luxury market is growing at 20% a year and is expected to expand to $14.7 billion by 2015, from $5.8 billion, according to a recent report by CII and AT Kearney. India has three million affluent households, defined as those with more than $100,000 (about Rs 50 lakh) of investable surplus, a global affluence study by research firm TNS said. The number of high net worth individuals, who have assets of $1 million or more, will more than double to 403,000 by 2015, Swiss wealth manager Julius Baer recently forecast. 17 JAN, 2012, 01.15PM IST, RAVI TEJA SHARMA,ET BUREAU Industrialists, celebs and businessmen spending on ultra-luxury gifts; 60% of luxury items sold are gifts NEW DELHI: Opulence has no limit. You can be happy with your hardworking employees and dole out a bonus for them, or you can ring in some style and hand them Versace mobile phones, each costing 3.5 lakh, as one top industrialist recently did to six of his senior execs for clinching a difficult deal. In another company, they gave away gift vouchers of 1-2 lakh to a bunch of top performers to buy bespoke suits. And last year, Shah Rukh Khan gifted Tag Heuerwatches to all members of his Kolkata Knight Riders cricket team, when it reached the last four of the Indian Premier League. These gestures of generosity may not muster support in these difficult times, but they come as a fresh lease of life for many luxury brands in India, who are now planning to expand their business. Gifts made up for 60% of luxury goods sales in 2011. "While many Indians have started spending on self, there are many who would still prefer someone splurge on them. It may be a matter of family bonds, which still run deep in the Indian

society," says Roasie Ahluwalia, general manager at Genesis Luxury, which represents brands such as Canali, Jimmy Choo and Bottega Veneta and has a joint venture with Burberry in India. Men, for instance, are picking up iconic Alexander McQueen clutches that cost over a lakh rupees for their wives, girlfriends and others. Women are gifting 50,000 cufflinks to their men. Fathers-in-law are gifting entire wardrobe makeovers for their son-in-laws and businessmen are buying expensive watches and pens to please the wily policy-makers. Needless to explain why most luxury goods sale happens during the festival season or on occasions such as the Valentine's Day, when people find a reason to splurge for someone he loves or wants to reward. "There isn't a doubt that sales shoot up during the October-December period, which is the festival and wedding season," says Abhay Gupta, executive director of Blues Clothing Company that represents brands like Versace, Corneliani, Cadini and John Smedley in India. Industry puts the share of the festival revenues to overall revenues of luxury good sales in India to as much as 70%. Ten years ago, for someone to gift a luxury product would require him to travel abroad. Today, disposable incomes have risen and aspirations are high. The entry of several international brands makes it easier for the high-spender. The airport stores of luxury firm Swarovski, for instance, are doing brisk business. "Our stores at airports in Delhi, Mumbai and Hyderabad are growing at 20% a year as this is the best place to pick up such gifts," says Sukanya Dutta Roy, director, consumer goods business at Swarovski India.

According to a global affluence study by research firm TNS, India has 3 million affluent households, defined as those with more than $100,000 (around 50 lakh) of investable surplus. In a report released last month, Swiss wealth manager Julius Baer forecast that the wealth of HNIs in India, with assets of $1 million or more, would more than double to 403,000 by 2015. The Indian luxury market is growing at 20% a year and is expected to grow to $14.7 billion by 2015, up from $5.8 billion today, according to recent report by CII and AT Kearney. The rapid growth in luxury sales can be attributed to the fast growing affluence in the country. Priya Sachdev Chatwal, chief operating officer and creative director, TSG International Marketing, which runs the luxury multi-brand store Kitsch, besides representing brands such as Alexander McQueen, Lanvin and Stella McCartney, says 30-35% of these brands' revenues come from people buying luxury accessories like wallets, clutches, jewellery, cufflinks, passport holders and scarves as gifts. The really high-value gifts are coming from industrialists, celebs, politicians and diplomats who are spending on gifting ultra-luxury cars and watches worth 5 lakh and even homes. About 1015% of business for luxury firmShreyans, that sells Ferrari, Maserati, Porsche and Ducati in India, comes from gifting, says Ashish Chordia, chairman of Shreyans. "We recently had a businessman gift two luxury apartments costing 5 crore and above to his daughters," says Kunal Banerji, president, marketing at Gurgaon-based M3M Group.

2 FEB, 2012, 09.29AM IST, TNN Italian luxury brand Giorgio Armani to enter Indian homeware market

MUMBAI: Iconic Italian luxury brand Giorgio Armaniis looking to bring its high-end homeware and furnishings retail stores to India in the next one year. A senior executive from the group told TOI that talks were ongoing with potential local partners even as the group scouts for retail spaces to open its Armani Casa outlets in India. The luxury group, which has an existing joint venture partnership with DLF Retail , a subsidiary of the real-estate major DLF, for its fashion business is not likely to extend the tie-up for the Casa brand. The lifestyle luxury market is evolving rapidly in Asia's third largest economy on the back of growing disposal incomes and consumer awareness . Last year, another luxury powerhouse Versace had opened its first standalone home furnishing store in partnership with New Delhibased Blues Clothing. For now, the Indian homewares market, including furnishing, furniture and home decor , is estimated to be Rs 80,000 crore growing at 10-12 % annually - this includes

largely domestic players operating at the midtier range. On the other hand, the luxury market in India witnessed a robust growth of 20% over the past year and is estimated to have reached $5.75 billion in 2010, according to an AT Kearney-CII report. Industry sources said Armani had earlier shown interest in tapping the luxury interiors market when it entered India in 2008 but the plan did not take off then. Armani Casa is currently designing interiors for Mumbai-based real estate developer Lodha Group's ambitious 'World One' project. In an exclusive chat with TOI, Fabrice Gouffran, director, Armani Casa, said, "We have done very well with our fashion line and the potential of our home products should be huge looking at the rising demand for luxury here." Armani Casa registered a 10% growth in its business in 2010 23 JAN, 2012, 10.40AM IST, SAMIDHA SHARMA & BOBY KURIAN,TNN LVMH co Sephora set for India foray

MUMBAI: French luxury goods conglomerate Moet Hennessy Louis Vuitton SA (LVMH) is likely to clinch a multi-brand retail deal with New Delhi-based Genesis Luxury Fashion, in which the former's private equity arm L Capital holds a significant minority stake. Genesis Luxury is expected to open doors for LVMH's subsidiary Sephora, a multi-brand beauty and personal care retailer, with a licensing deal as talks failed with other contenders like Reliance Retail and Parcos, said two separate sources familiar with the matter. LVMH is finalizing plans for Sephora a little over a month after India deferred foreign direct investment (FDI) in multi-brand retail. The 20-billion-euro luxury group's discussion with Genesis also signals its deepening ties with the Indian company after L Capital last year picked up 25.5% equity in the Sanjay Kapoorowned firm, which operates single-brand stores Just Cavalli, Canali, Paul Smith and Jimmy Choo. LVMH has independent operations of its flagship Louis Vuitton stores in the country. When contacted by TOI, a spokesperson for Genesis Luxury Fashion declined comment on its partnership with LVMH to bring Sephora to India, adding they would talk about their plans in time. Industry observers said Sephora's deal-making with Genesis would be innovative following the L Capital investment in the latter. L Capital is sponsored by LVMH and Groupe Arnault-the private holding company of business tycoon and LVMH chairman Bernard Arnault-managing assets worth over 900 million euros. The Sephora stores are likely to open by end of this year offering cosmetic, skin care, fragrance, bath and body, hair care across multiple brands. The retail chain also has a hugely popular private label brand in its name which is moderately priced as well as a strong online presence across markets. Sephora has over 1,200 stores globally.

LVMH has been scouting for a partner to unfurl its multibrand retail operations in India, and had held discussions with multiple suitors, including Reliance Retail, a part of India's largest private sector companyReliance Industries. One of the sources mentioned earlier said LVMH always seeks control over retail operations, and would have preferred Genesis given its existing investment ties. This would also provide the group enough flexibility to expand Sephora's India business.

Sephora and DFS (a dutyfree store chain) are the two multi-brand retail businesses of LVMH. The Paris-based group is betting big on the potential of its multi-brand channels in emerging markets like India. DFS has been in talks with the country's swanky new airports to start operations. The Indian beauty retail market is largely unorganized with department store chain such as Shoppers Stop and Lifestyle offering shop-in-shop outlets for most of the high-end brands operating in the segment. "The key challenges facing the industry are low consumer awareness, limited supply side push and product, infrastructure/retail channel availability. This is where a multi-brand outlet which offers a plethora of choices has a huge potential to succeed," said Neelesh Hundekari, principal at consulting firm AT Kearney. An AT Kearney-CII report on the luxury market said the personal care segment in India is estimated at $280 million as of 2010 and growing at 22%. Typically, a female consumer dominated market in other countries, with a significant share of cosmetics and skin care, the Indian market stands out for its fragrance domination. Not just a cosmetic deal French giant LVMH's PE arm L Capital holds 25.5% stake in Genesis Luxury, which operates singlebrand stores Just Cavalli, Canali, Paul Smith & Jimmy Choo LVMH's subsidiary Sephora is a multi-brand beauty and personal care retailer Sephora stores are likely to open by this year-end, offering cosmetics, skin care, fragrances, bath & body and hair care across multiple brands

10 FEB, 2012, 10.50PM IST, PTI Canali Holdings to invest Rs 7.65 cr for Indian JV

NEW DELHI: Italy's luxury fashion brand Canali will invest Rs 7.65 crore in India to set up a joint venture with 51 per cent ownership.

The Foreign Investment and promotion Board on Friday cleared Canali Holding's proposal to set up the JV with 51 per cent foreign equity participation for single-brand retailing. Canali has been selling products in India in partnership with Genesis Luxury Fashion Pvt Ltdsince 2007 through a marketing and distribution agreement. Genesis operates five Canali stores in the country and the two parties are understood to be in the process of setting up a JV. When contacted Genesis Luxury Fashion's spokesperson did not offer any comments. Canali had proposed investment in India soon after the government notified 100 per cent foreign direct investment in single brand retail. According to industry observers, it has decided to restrict holding to only 51 per cent because a higher stake would have required it to mandatorily source 30 per cent of its products from Indian small and medium enterprises. Genesis also retails a host of other international luxury labels including Paul Smith, Bottega Veneta, Jimmy Choo, Etro and Tumi. It also has a joint venture with Burberry of UK.

13 FEB, 2012, 05.11AM IST, ET BUREAU Canali, Genesis form JV to sell products in India

NEW DELHI: Italian luxury major Canali has entered into a 51:49 joint venture with Genesis Luxury Fashion, which currently has distribution rights of Canali-branded products in India. The company also plans to invest Rs 7.65 crore in India. The joint venture company will now sell Canali branded products in India exclusively. Canali had sought approval from the Foreign Investment Promotion Board (FIPB), which gave its clearance last week. "India is a market with a remarkable potential still to be exploited. By teaming up with Genesis Luxury we are confident we will be in a better position to strengthen our leadership in Indian

luxury menswear market," said Stefano Canali, general manager and third generation of the Canali family in business. The Italian brand, which currently operates five exclusive stores in India through a marketing and distribution arrangement with Genesis Luxury, has had a successful business association with Genesis Luxury for over four years now and the joint venture was the next logical step, said Sanjay Kapoor, managing director, Genesis Luxury. The JV will now accelerate the brands growth in India by opening 10-15 stores over the next three-four years. Canali is the first luxury brand to invest in India since 100% FDI in single brand retailing was allowed by the government earlier this year. Genesis, a franchise for several global luxury brands, has been operating five Canali stores in India-two in the National Capital Region, at the DLF Emporio Mall and at the Oberoi hotel in Gurgaon, and one each in Mumbai's Palladium mall, Hyderabad's Taj Krishna hotel and Bangalore's UB City mall.

17 FEB, 2012, 05.01AM IST, RAVI TEJA SHARMA,ET BUREAU Roberto Cavalli teams up with Manav Gangwani's Infinite Luxury for Indian stores NEW DELHI: Italian fashion brand Roberto Cavalli is set to enter India in partnership with startup firmInfinite Luxury, which will also bring the designer'sCafe Cavalli to the country. Known for its bold patterns and exotic animal prints, Cavalli plans to open a 3,500 sq ft store at the ground floor of Delhi's DLF Emporio Mall in May, a person familiar with the matter told ET. The brand is looking to open a store in Mumbai as well, the person said, adding that plans are also afoot for setting up in different parts of the country Cafe Cavalli, on the lines of the group's original cafes in Florence and Milan. The group's other brand Just Cavalli has been in India for a few years. Cavalli has signed a franchise agreement with Infinite Luxury, set up by Indian fashion designer Manav Gangwani, Dubai-based entrepreneur Sahiba Narang and finance expert Rahul Kapoor. Gangwani could not be reached for comment.

The brand has lined up for launch in India its latest range of fashion wear for men and women, besides accessories such as handbags, shoes, watches, sunglasses, jewellery and small leather goods, gifting items and children's collection. The Italian brand hit the headlines for the wrong reasons in 2004 when a section of the Hindu community protested against a line of female underwear designed for Harrods of London that featured images of Hindu goddesses. Cavalli had then withdrawn the line and issued an apology. It is the latest among global luxury brands being drawn by the growing opportunity in India. According to a recent study by industry body CII and AT Kearney, the domestic luxury market is growing at 20% a year and is expected to grow to $14.7 billion by 2015, up from $5.8 billion currently. The country has three million affluent households, according to a global affluence study by TNS. Though there are just four luxury malls in India at the moment, over one million sq ft of luxury retail space is likely to come up in NCR, Chennai and Kolkata in three years.

Affect of FDI in luxury retailing:

Big retail gets negligible FDI: Commerce ministry Despite the controversy over the entry of foreign retail giants, the government has cleared foreign direct investment (FDI) worth only $3.1 million in retail between February 2006 and May 2007. In a note prepared in response to questions raised on FDI in retail, the commerce ministry said it had cleared 17 projects of single-brand product retailing, a majority of them in the fashion and ready-to-wear business. Company Socomec France Etamint Louis Vuitton Fendi Christian Dior Hermes Grotto Moja Shoes Mitsui Automotive Lladro Damro Product UPS systems Womens wear Pens, shoes, travel bags, jewellery Bags, dresses, accessories Travel bags, shoes, readywear, lingerie Leather, ready-to-wear apparel Retailing Gas brand of clothing Retailing sportswear and shoes Retailing Toyota cars Retail products under its own brandname Furniture

Most of these companies are looking at minimal investments in setting up their retail stores. For instance, Louis Vuitton, which will sell products such as pens, shoes and bags under the premium LVMH brand, will invest only Rs 3.32 crore, Moja Shoes Rs 2.6 crore for a 20 per cent stake and Grotto Rs 3.82 crore for 50 per cent. The low level of FDI inflow is significant given the widespread opposition to big retail in general and foreign retailers in particular. September 3, 2007 Source: Business Standard

Italian brand Tods plans to enter India Italian accessories brand Tods, which is known for its high-end leather shoes, is planning to enter India through a 51:49 joint venture with Bhukhanvala Holding Pvt Ltd. The joint venture company, Tods Retail India, has approached the Foreign Investment Promotion Board for retail trading under single brand, sources said. The permission is being sought for Tods Hong Kong and its affiliate Tods International BV to acquire 51 per cent of shareholding in Tods Retail India amounting to Rs 5.7 crore.The proposal would come up for discussion on Friday. The acquisition would enable Tods to bring its range of products to India. The Tods group sells shoes and luxury leather goods under the brands Tods and Hogen and also deals in casual wear under the brand name Fay. Tods recently reported consolidated sales of 316.4 million in the first six months of 2007, an increase of 15.7 per cent compared to the same period of 2006. The companys products are made in the groups own factories, a total of seven for shoes and two for leather goods, and in a limited number of specialised laboratories. August 31, 2007 Source: Hindu Businessline Genesis Colours to form luxury retail JV Genesis Colours, the marketer of Satya Paul brand, is forging a luxury retail joint venture with Sports Station International (SSIPL). The JV Genesis Luxury will roll out retail chain across India, exclusively dedicated to luxury brands.

The two partners are exclusive Indian licensees for some of the worlds biggest luxury brands, which will get transferred to the new company. While Genesis Colours holds licence for Canali in India, SSIPL is licensee for luxury labels such as Paul Smith, Aigner, Rosetti. The proposed venture will ride an investment of Rs 18-20 crore in the first year of operation that will go into setting up of stand-alone single luxury brand outlets and shop-in-shops in key metros such as Delhi Mumbai, Bangalore and Hyderabad. Subsequently, the chain will enter other key cities. Over three years, the JV plans to have 50-70 outlets in all major Indian cities, with 6-10 exclusive retail stores for each of the JVs licensee brands. August 23, 2007 Source: Economic Times

Strategy: A/X Armani Exchange Sees Seasonal Apparel Appeal

By Sandra O'Loughlin Published on AllBusiness.com
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In an effort to break through the glut of fashion print ads, A/X Armani Exchange has changed its strategy and will divide its spring/summer effort into separate campaigns. The first will break in March publications; the second, in June. Previously, the company produced one consistent campaign which ran January through August.

Spreads and single-page ads will run in Cosmopolitan, Jane, Lucky, Elle, Marie Claire, Nylon, Teen Vogue, GQ, Vitals, Out, The Fader and V. Billboards, POP, direct mail and Internet support the effort, which was developed in-house. Ad spend was not revealed, but is up about 10% over last year, according to Tom Jarrold, vp-marketing and creative. The company spent $4.3 million from January-October 2004, per Nielsen Monitor-Plus.

The first campaign, "Lush," showcases apparel against the surrealistic backdrop of a dense tropical garden and blue sea. In one image, a female model in a skimpy white suit is surrounded by shirtless young men posed like statues and gazing seductively into the distance.

The theme will continue in-store with a Lush CD of Latin-style dance music. The CD also will be sold through Virgin music stores.

The second campaign, "Tropic," takes a more romantic approach, and images will have

golden tones.

"Our creative and media strategies for the season reflect the increased pace at which we are doing business," said Jarrold. "A/X releases new product monthly, so it's important for us to convey a new offering with fresh and frequently changing imagery."

Source: http://www.allbusiness.com/marketing-advertising/branding-brand-development/46959181.html#ixzz1nKXxcFdD

2 MAR, 2012, 03.10PM IST, PTI

Reliance Brands to sell LVMH's Thomas Pink shirts in India

MUMBAI: Mukesh Ambani-led Reliance Brands today said it has signed an exclusive agreement to sell French major Louis Vuitton Moet Hennessy's brand Thomas Pink's shirt collection in the country. Louis Vuitton Moet Hennessy (LVMH) had acquired the British brand Thomas Pink in 1999, and it will hawk a range of luxury shirts, ties, knitwear and accessories in the country. "In Reliance Brands we found a partner that not only understands and resonates our brand values but also has a winning combination of people, infrastructure and market muscle that we aspire to have in a partner," Thomas Pink President and Chief Executive Jonathan Heilbron said in a statement issued here. Reliance Brands currently has brand partnerships for high-street labels like Diesel, Ermenegildo Zegna, Hamley's, Kenneth Cole, Paul & Shark, Quiksilver, Roxy, Steve Madden and Timberland and had also announced a joint venture with US-based Iconix recently. "Given the increasingly well-travelled and aspirational Indian consumer, the choice to partner with and launch Thomas Pink in India was obvious. It is a Brand with very high recall and will sit in the Indian wardrobes easily and naturally," Reliance Brands President and Chief Executive Darshan Mehta said.

26 January, 2012 | by Guest Contributor

Global Briefing | Is FDI Reform the Answer to the India Problem?

MUMBAI, India By the end of 2015, emerging markets should account for more than 50 percent of luxury sales, Antoine Colonna, a luxury analyst at the asset manager Carmignac Gestion in Paris, told The Wall Street Journal in the spring of 2011. This isnt evolution. Its revolution, she continued. But in India, the revolution has yet to take hold. Despite having the worlds second-fastest growing major economy and a rapidly expanding population of high net worth individuals, the countrys market for international luxury goods, worth around $1.3 billion, remains surprisingly small. In fact, while China currently accounts for an estimated 10 percent of the global luxury market, India makes up a mere 1 to 2 percent. So why has Indias market for international luxury goods failed to take off? FOREIGN DIRECT INVESTMENT REGULATIONS Recently, enormous attention has been focused on Indias foreign direct investment (FDI) laws, which for years capped foreign ownership of India-based retail operations at 51 percent. In a landmark decision earlier this month, India formally lifted restrictions on foreign investment in its single-brand retail sector, allowing global fashion brands like Louis Vuitton, Gucci and Burberry to acquire 100 percent ownership of their India operations and trade without local partners. This was the last frontier to open. It will make India a preferred market, Tikka Shatrujit Singh, chief representative in Asia for French luxury conglomerate LVMH, told BoF. But the decision comes with a caveat: foreign companies are required to source 30 percent of their production from small and mediumsized enterprises (SMEs) in India. Were delighted with the decision, but the 30 percent caveat about working with small industries has to be carefully looked into, since there are concerns over child labour and quality factory production, added Singh. Sourcing from Indian SMEs will restrict investments since its difficult for brands to match their quality standards and positioning, said Abhay Gupta, executive director at Blues Clothing Company, a firm that represents Versace, Corneliani, Cadini and John Smedley in India. Besides, most brands cannot alter their DNA and signature specialisation of made in country of origin. A bureaucrats delight, a business persons nightmare, commented Darshan Mehta, president and CEO of Reliance Brands, a subsidiary of Indian conglomerate Reliance Industries, which represents international brands Ermenegildo Zegna, Diesel, Paul & Shark and Kenneth Cole in India. Indias cottage industries are not equipped to even produce H&M quality goods, forget catering to luxury brands. But new sourcing requirements aside, FDI reform only addresses one of the many challenges that international fashion brands face in India. HIGH IMPORT DUTIES For one, high import tariffs mean that luxury products can cost between 20 and 30 percent more in Mumbai and Delhi than in London or Paris. The government has assured us that at an appropriate time,

the duty structure will be adjusted to realistic levels, said Singh. But for now, the problem persists. We have only seen year-on-year growth, but the reason that the business suffers, even if slightly, is on account of high import duties, said Bertrand Michaud, president of Herms India. In fact, affluent Indians, who are extremely price-conscious even when shopping for luxury goods, buy more than 50 percent of their international luxury goods abroad. Brands also face significant difficulties finding suitable retail space and understanding and catering to Indian tastes and sensibilities, challenges that can make partnerships with savvy local allies highly advantageous. NO RUSH TO END LOCAL PARTNERSHIPS Indeed, despite recent changes to FDI law, few brands are in a hurry to snap their ties with their Indian partners. The FDI announcement doesnt affect Herms at all, said Michaud. Our partners in India, Ashok and Neelam Khanna, have been friends of the brand family for 50 years. They are in sync with our aesthetics and the Indian market. The relaxation in FDI norms is a progressive move in the economic reforms process; it opens up the economy further to competition from global players, resulting in better processes, improved supply chains, better pricing and of course, more jobs, said Sanjay Kapoor, managing director of Genesis Luxury Fashion, which holds Indian franchising and distribution rights for Burberry, Paul Smith, Bottega Veneta, Canali, Jimmy Choo and Etro. But on their own, brands may not have enough understanding of the Indian market, its nuances and customer demographics; all critical to the luxury retail business, he added. A SCARCITY OF SUITABLE RETAIL SPACE In particular, the challenge of finding suitable retail space in a country without equivalents to Londons Bond Street or New Yorks Fifth Avenue makes local knowledge highly valuable. One of my jobs is to continue an ongoing dialogue with real estate developers, said Singh. Purchasing property is extremely expensive and quality rental space in India comes at a premium. Ambiance, cleanliness and security can be significant concerns, as well. As a result, luxury retailers have historically favoured opening stores in five-star hotels and upscale malls. But in cities like Mumbai, for example, brands face a shortage of premium mall space and selecting the right retail location is no simple task for those unfamiliar with the local landscape. Herms was the first international luxury brand operating in India to open a stand-alone boutique with an open storefront to the street in South Mumbais Fort District in 2011. The brands two other outlets in Delhi and Pune are both housed in hotels. Retail is about detail, said Mehta. Galleria gets 10 footfalls a day! Tods had to shut down, he continued, referring to retail space at South Mumbais Hilton hotel. The next best bet is malls. Palladium in Mumbai is doing well, he added, mentioning a luxury mall in Mumbais Lower Parel neighbourhood that houses international brands like Burberry and Zara (which in India is positioned as a premium label). CULTURAL COMPLEXITY & LOCAL LUXURY COMPETITORS International brands operating in India also face a market with cultural complexity and culturallyattuned, local luxury goods. Indian consumers are price-sensitive when buying Western high fashion. They wont spend easily on that one lakh-plus rupee ($2,000) eveningwear dress. But theyd splurge on Indian couture-based wedding wear in a jiffy, said Sanchita Ajjampur, a design consultant to

international fashion brands including Lanvin, Gucci, Marni and Etro, underscoring the enormous cultural and economic importance of Indias wedding market and the local designers who cater to it. Indeed, a wedding outfit by Indian designer Sabyasachi, for example, can come at couture prices, which leaves less share of wallet for international brands. This probably explains the decision to launch the Herms India sari collection, she continued. I am not here to get tourists. I want Indians. I want Herms to be in the hands of Indians, said Christian Blanckaert, senior executive vice-president of Herms, at the launch of the brands first India store at New Delhis Oberoi hotel back in 2008. But achieving this is no simple task. To attract local clientele, Herms has experimented with a number of India-inspired product lines, including a recently launched line of saris, based on the companys famous scarves. Other international fashion brands have also offered Indianised products, tailored to local tastes, like Bottega Venetas Knot India clutch, Jimmy Choos Chandra clutch and Canalis Nawab line, all designed to cater to the countrys large wedding market. But while most India experts emphasise the importance of a tailored offering, localising product isnt a guarantee of commercial success. India-inspired collections add PR value to the brand, but they dont always translate into serious sales, said Mehta. Every brand has a different approach; global but tinged with local ideas, said Singh. Indeed, knowing exactly when and how much to localise is a delicate act and each brand has a different formula that must be fine-tuned to its specific positioning and target customer. When we tied up with Diesel, my friends asked me, Are you launching desi (local) Diesel or the real Diesel? Mehta continued. Luxury brands have a Western quotient attached to them. Thats what adds the aspirational value for Indians. LONG-TERM DIVIDENDS Indeed, despite recent FDI reform, the on-going challenges of cultural complexity, scarcity of suitable retail space and high import duties mean the Indian problem is far from solved. But for brands with staying power, India presents a compelling long-term opportunity. According to Swiss wealth manager Julius Baer, the number of high net worth individuals in India with assets of over $1 million is expected to reach 403,000 by 2015. Furthermore, according to the United Nations, India is set to enjoy favourable demographic momentum for another three decades and will add over 241 million people to its workingage population by 2030 (far more than Brazil or China) boosting the countrys economic growth prospects in the coming years. Doing business in India doesnt have a wham-bam-thank-you-maam formula, said Gupta. Its a slow process but its one that will eventually pay long-term dividends.

GIROGIO ARMANI The Brand Philosophy Unlike the usual practices of branding that are normally seen in the consumer goods industry, the branding philosophy in the fashion and luxury goods industry is quite unique and personality based. Most of the famous fashion houses like Christian Dior, Yves Saint-Laurent, Gucci, Versace, Giorgio Armani and many others were built on the personality of the founders. As design is the most important ingredient of fashion and luxury apparel, the individual style of these designers becomes crucial to creating and sustaining the fashion brand strategy. It is these unique designs and patterns that reflect the personality of their creator that gives an identity to the brand and helps to differentiate it from the crowd. The Giorgio Armani fashion house, like many other fashion houses, has been built primarily on the unique personality and identity of Giorgio Armani himself. The brand takes on the identity of the founder through the designs created. Though this aspect of the fashion industry provides fashion houses with a strong sense of differentiation that can be conveyed in a tangible and visual form, it also poses a serious threat. When an entire brand and fashion house are built on the basis of the founders' personality and identity, it becomes a major challenge to keep the brand going after the demise of the founder, something many of the fashion houses have realized in the recent past. The Giorgio Armani Brand Architecture Whenever a brand gains popularity and acceptance from its target customers in its core business, the next obvious step for the brand is to charter a new course by venturing into different product lines, different segments, and ever different markets. This phenomenon seems common across industry sectors. Giorgio Armani with its iconic popularity amongst the elite of the society and the fashion literate segment of the market has followed similar steps by extending the brand. Today the Armani brand architecture encompasses one corporate brand and five sub-brands, each catering to different sets of target customers and at different price levels. The signature Giorgio Armani line: This is the main collection of apparel that consists of the signature Armani suits, Oscar gowns and so on, which are of the ultra-premium price points and essentially targeting consumers in the 35-50 year old age group. Armani Collezioni: This is Armani's venture into a slightly lower market segment. This basically caters to the segment of people who aspire to wear Armani apparel but cannot afford the ultimate signature line, or to those who crave to add extra products to their existing portfolios. The Armani Collezioni brand, with a price point of almost 20% lower than the main line, provides an excellent line of affordable fashion. Emporio Armani: Targeted especially at the young professional segment in the 25-35 year old age group, the Emporio Armani brand provides contemporary designs that are relevant to the target customers. Armani Jeans: This is the lowest range of Armani apparel. This is to the value segment what the signature line is to the premium segment. Catering necessarily to the young adults in the 18 to 30 year old age group, the Armani Jeans collection provides a trendy yet fashionable and luxurious line of apparel. A/X Armani Exchange: This is the licensed brand of chain of retail outlets of Armani fashion house. This serves as the ultimate testimony to the power of the brand. By providing the entire range of its apparels and accessories, Armani Exchange provides customers with the complete feel of the luxurious fashion of Giorgio Armani. However, the Giorgio Armani brand architecture can be misinterpreted by the prospect. For instance, the differences between Emporio Armani and Armani Collezioni are often quite insignificant. Furthermore, in January 2005 the Armani group launched Armani Prive to stands for its haute couture collection. Giorgio Armani and Armani Prive can cross borders creating confusion in the mind of the buyer. These sub-brands help Giorgio Armani to operate in many segments of the fashion apparel market. But this is not all. Not only does Armani straddle many segments of the same product category, but also many different product categories. Leveraging its strong brand equity in the fashion apparel market, Giorgio Armani has ventured into other related categories like eye wear, watches and cosmetics. These are made available in each of the above-mentioned brand categories to ensure that it is available to the different segments of the market. It is usually argued that eye wear, perfumes, watches and cosmetics are strongly related to fashion and luxury and thus it is natural for fashion houses to extend their brands into these

categories. Giorgio Armani is a very strong example for this argument. By leveraging its expert knowledge of the fashion and luxury industry, Armani has been able to come up with winning concepts in the other product lines of cosmetics, watches, jewelry and eye wear. But Armani has not stopped at just these product categories: Armani has extended the brand into multiple other categories such as Armani Casa (up-market furniture), Armani-branded Dolci (confectionary), and Armani-branded Fiori (Flowers). And to add to this wide portfolio of brands, Armani very recently struck a deal with a Dubai-based property group Emaar to come up with a chain of 14 Armani branded hotels and resorts by 2011. As is the trend in the fashion industry to operate in the entire spectrum from apparel, jewellery, cosmetics, watches, perfumes and luxury hotels, Armani has been able to leverage its brand equity to be present in most of these lucrative sectors. Today, Armani group has a retail network of 60 Giorgio Armani boutiques, 11 Collezioni, 122 Emporio Armani, 94 A/X Armani exchange, 13 Armani Junior , 1 Giorgio Armani Accessori and 16 Armani casa spread over 37 different countries. With so many things going on in the Armani stable, it might seem a pretty picture at the outset. But this huge portfolio of brands and product lines creates a much bigger set of challenges to the Giorgio Armani brand strategy in the future. Giorgio Armani's future brand challenges The founders' dilemma: This phenomenon is classic and occurs for any company that is built on the basis of a strong and charismatic founder and leader. As the main competitive advantage for the company is the founder/leader himself, neither the founder nor the company would think of life after the founder. Moreover, whenever the companies' success and survival depends very heavily on the existence of a single person, such companies and its leaders should take proper action from an early stage so that proper leaders can be nurtured within the organization. The Giorgio Armani company is a classic case of founders' dilemma: Giorgio Armani, the CEO and owner of the Armani brand is in his early 70s. However, the company seems not to have made any plans for life after Giorgio Armani. In a recent interview, Giorgio Armani was quoted as saying that the search for a corporate partner and a successor was "not for the today, not for tomorrow but perhaps for after tomorrow". Though there have been cases where companies after much effort have been able to stand up and live after the demise of their founders, those are the rarities. Armani should formulate a structure in his company along with his key management people to put in place a definite structure that identifies and nurtures future and upcoming leaders who can carry on the business even after the demise of any single individual. This aspect gains a bit more importance in the fashion industry as the personality, concept and ideas of individual designers prove to be real competitive advantages. Keeping this in mind, Giorgio Armani should tackle this challenge when there is still a considerable amount of leeway to play with. Brand dilution due to over-stretch: The primary objectives of businesses are to earn profits and to enhance shareholder value by maximizing ROI. One of the main reasons that businesses invest in branding and brand management is for the same reasons. Strong brands, as is well known, provide companies with a very powerful tool to enter newer markets with limited investments by leveraging their strong brand equity. It gives companies numerous revenue streams. Given this simple but strong fact, it is not a surprise that most of the strong brands in the world have leveraged their brand equity and extended their brands into newer product categories, newer markets and even newer market segments. Armani, when analyzed in this light, has extended its strong brand equity a bit too far. Though the core business of Armani is in fashion apparel business, it has extended its brand into categories as different as luxury hotels and even confectionaries. The examples that immediately come to mind are those of Calvin Klein and Pierre Cardin. One of the many reasons that these brands diluted their brand equity was because they used their brand names on a very wide range of products. One of the main factors that make fashion houses and their products premium are their exclusivity. By franchising their brand names to literally everything, these brands lost a significant portion of their strong brand equity. Though Armani might have extended its brand to hotels because luxury travel is catching up fast as a fad with elite travelers, managing the brand along these different dimensions could be a massive challenge. Managing brand architecture: Given Armani's portfolio of brands within the fashion segment, as in many of the other markets that it operates in, effectively managing this portfolio of brands will prove to be the biggest challenge in the future. As the brand moves into different territories, interacts with different sets of customers, and represents different personalities, it becomes quite a task for maintaining consistency across all of its marketing communications and other activities. Though Armani has been using the corporate brand name in all its sub-brands, and across all its offerings, it is

indeed a double-edged sword. On one hand, this gives Armani a great opportunity to build a very strong corporate brand but on the other, it gives rise to a huge risk of diluting the brand equity. Given this strategic dilemma, Armani has to tread carefully in the future. Armani should also realize that its existence is mainly due to its strength in the fashion apparel business. As the brand extends through different landscapes, Armani should not lose focus as new pressures on resources build up. Maintaining financial independence: Armani is a rarity from a financial perspective as well. Giorgio Armani has been the only shareholder of the company from its inception till now. Armani has not taken any bank loans either. It has been one of those rare companies which has managed to have very healthy operating profits and ploughed back almost 700 million Euros into the business since 1999. Having this financial independence has helped Armani immensely as the company tests newer territories. With no pressures from shareholders and without having to bother about meeting quarterly targets, Armani has been able to operate quite successfully. As is commonly known in the fashion industry, it takes a considerable time for the concept and products to take root in the market. For any company to sustain this gestation period, it needs to operate in an environment where there are no day-to-day financial pressures. Having this kind of financial independence to operate in has been one of the key success factors for Armani. But to continue as a one man company in the future could be quite difficult. With consolidation happening in many industries, it might just be a matter of time that it catches up with the fashion industry as well. When such a thing happens, it could pose a big challenge to the working style of Armani and its continued success. In this light, Armani might want to think of other options when it has a choice and before something is thrust upon it. Sustaining consistent brand personality: One of the main aspects of a fashion brand is its personality and its identity in the marketplace. Building and sustaining a personality that is relevant and one that resonates with the customer base is one of the most difficult aspects of building a strong brand. Armani, with its presence in diverse markets, a very wide brand portfolio, and interacting with diverse set of customers, faces this huge challenge of building a relevant and resonant personality. With the ever growing competition in the fashion industry and ever growing brand portfolio, building and nurturing this personality will prove to be a very big challenge for Armani in the future.

Burberry fashions strategy to target Indian high net worth individuals

ET Bureau Oct 11, 2011, 03.58am IST

NEW DELHI: British luxury brand Burberry is making a concerted effort to reach out to high net worth individuals (HNIs) in India and China, even as investors have hammered the company's stock 30% since July due to its expansion plans in Asia. Angela Ahrendts, the American CEO of the 155-year-old firm, said the company is relying on social media to connect with Asian HNIs who are on average 15 years younger than their counterparts in the developed economies. She said the company is also aligning its product mix for these markets. "In India, there is a very strong male market, as in China, so we have had to relook at our men's offering. We are listening to our customers here, and have started our accessories business," Ahrendts said. Asia contributes a third to the revenues to the company, which sells trench coats, scarves and umbrellas with a unique tartan pattern, besides fragrance and fashion accessories. Ahrendts said Asia's share is set to rise further, with countries like India and China producing more billionaires than the rest of the world. "China is one of the fastest growing markets in the world...growing at the same rate as India. But it has a 30-year headstart," Ahrendts said, comparing the firm's 60 stores across China with the seven in India. "We have a five-year plan for India, of which we have barely covered half. But we expect India to be a big market."

In India, Burberry already has more than half a million Facebook fans. Apart from its Facebook and Twittercampaigns, in China the company is using four local social media sites. Burberry has changed its global product as well as marketing strategy in accordance with the demographic changes in these growth markets. In the last two years, the company has added new product categories to its catalogue like menswear, men's accessories and fragrances. The products have been added to the global portfolio as a lot of Burberry's buyers travel around the globe and make purchases there. "These buyers will look for the same products, though their counterparts in some other markets may be looking for something else," she explained. Ahrendts said she expected the key markets within China to outperform the country as a whole. "We are not focused on China the way everyone is perceiving right now," she explained, "I have told investors that just because they see that the growth in China is dipping from 9% to 8%, does not mean everybody needs to panic. It is a big country. Those are aggregate numbers. The big flagship markets that people are migrating into like Beijing and Shanghai are typically in a higher growth than the country is." The CEO said she was confident that the flagship markets would continue to grow. "That is one reason we decided in the beginning to target the millennium consumers," she said. "Our experience is that the HNIs the world over are recession-proof. We don't have 80% of our products in one division. That would scare me. We are also very balanced by product and region." However, she added that the company was well prepared for a downturn if there is one.

2 MAR, 2012, 03.10PM IST, PTI

Reliance Brands to sell LVMH's Thomas Pink shirts in India

MUMBAI: Mukesh Ambani-led Reliance Brands today said it has signed an exclusive agreement to sell French major Louis Vuitton Moet Hennessy's brand Thomas Pink's shirt collection in the country. Louis Vuitton Moet Hennessy (LVMH) had acquired the British brand Thomas Pink in 1999, and it will hawk a range of luxury shirts, ties, knitwear and accessories in the country. "In Reliance Brands we found a partner that not only understands and resonates our brand values but also has a winning combination of people, infrastructure and market muscle that we aspire to have in a partner," Thomas Pink President and Chief Executive Jonathan Heilbron said in a statement issued here. Reliance Brands currently has brand partnerships for high-street labels like Diesel, Ermenegildo Zegna, Hamley's, Kenneth Cole, Paul & Shark, Quiksilver,Roxy, Steve Madden and Timberland and had also announced a joint venture with US-based Iconix recently. "Given the increasingly well-travelled and aspirational Indian consumer, the choice to partner with and launch Thomas Pink in India was obvious. It is a Brand with very high recall and will sit in the Indian wardrobes easily and naturally," Reliance Brands President and Chief Executive Darshan Mehta said.

5 MAR, 2012, 02.48AM IST, PARAMITA CHATTERJEE & RATNA BHUSHAN ,ET BUREAU

LVMH arm L Capital Asia to put Rs 750 crore in Raymond Apparel

NEW DELHI: The private equity arm of the world's biggest luxury products group, LVMH, is negotiating to invest about $150 million ( Rs 750 crore) inRaymond Apparel, two people familiar with the discussions said. The deal between L Capital Asiaand the Raymond Group arm for a minority stake, if it goes through, will be the largest private equity investment in an Indian apparel company. The exact quantum of the stake under negotiation could not be ascertained but one of the people said it is between 10% and 20%. Ravi Thakran, managing partner of L Capital Asia, declined to comment. Raymond did not reply to an email sent on Saturday but a senior official denied being in talks with L Capital Asia. Raymond Apparel owns several popular brands. SPIKE IN INDIAN APPAREL MARKET Raymond Apparel owns brands such as Park Avenue, Parx and Notting Hill, which are sold at its exclusive retail stores The Raymond Shop and multi-brand outlets across India and West Asia. It is fully owned by listed entity Raymond Ltd, which is run by Chairman and Managing Director Gautam Hari Singhania. Raymond is looking to sell a stake in the apparel unit because it is planning an acquisition in the domestic market and wants to expand into new regions internationally, a source said. The growth of organised retail, a young population and rising incomes are leading to a spike in private equity interest in India's apparel market, which consultancy firm McKinsey has estimated will be worth $40 billion in 2015. Just last week, the investment arm of Wipro Chairman Azim Premji bought a 7% stake in Fabindia. In other prominent deals, L Capital last year bought a stake in Genesis Luxury while Franklin Templeton invested in Mumbai-based Kimaya Fashions. Although India's apparel market is large and growing, it is overwhelmingly dominated by unorganised players. Raymond's main competitors are the Aditya Birla Group's Madura Fashion & Lifestyle and Arvind Brands. Last year, there was speculation that Aditya Birla Group Chairman Kumar Mangalam Birla may sell his stake in Madura, which owns brands such as Louis Philippe, Van Heusen, Peter England and Allen Solly, to Apax Partners, but a deal did not materialise. Amit Gugnani of retail consultancy Technopak Advisors said Madura

Garments has a bigger portfolio than Raymond in terms of the number of brands. "But Raymond does have a large distributor base and a huge opportunity to expand further."

8 MAR, 2012, 02.15AM IST, PARAMITA CHATTERJEE & RAVI TEJA SHARMA,ET BUREAU

LVMH investment arm L Capital's presence boosts Indian branded apparel market

NEW DELHI: L Capital Asia is not the biggest private equity fund to invest in India. It hasn't done too many big deals either. But the investment arm of LVMH, one of the world's most prominent luxury goods retailers, has been grabbing the attention of peers and consumer brands within less than a year of being in India. So far it has made only two moves-investments in Genesis Luxury and Fabindia-but there is chatter that more is on the way and already analysts are commenting that L Capital Asia could potentially stir up India's branded apparel market. The logic is that L Capital Asia's pedigree- LVMH owns brands such as Louis Vuitton and Dior-and deep pockets make it just the sort of investor capable of giving homegrown brands a global identity. Such a possibility, combined with India's rapidly-growing consuming class, has other investors excited. "It bodes very well for the industry as some of our early-stage companies can compete for growth capital funding from a global strategic investor," said Prashanth Prakash of Accel Partners, which has a slew of investments in online apparel and lifestyle firms. L Capital Asia initially set out to raise $400 million ( 2,000 crore) for investments in India and China, its two focus markets in Asia. But enthusiastic response from limited partners, who provide money to private equity firms, boosted the fund size to $640 million. A large chunk from this corpus is expected to flow into the Indian apparel market that consultancy firm McKinseyestimates will be worth $40 billion in 2015. "We want to take a good share of the middle class consumption in India which is witnessing secular growth," said Ravi Thakran, managing partner at L Capital Asia. Based in Singapore and the leader for investments in emerging markets, the 48-year-old spent his childhood in Delhi and graduated from IIM

Ahmedabad. In its first India transaction, L Capital Asia paid 100 crore to acquire about a quarter of the stake in Genesis Luxury Fashion, a company that markets brands such as Canali, Paul Smith and Jimmy Choo. May Raise Stake in Genesis Luxury Earlier this year, it followed up with a second deal in marquee ethnic wear chain Fabindia by acquiring an 8% stake in the company. For Genesis Luxury, L Capital Asia's first investment here, the fund's global network is a major attraction. "They add far more value to our business than a pure capital infusion," said Sanjay Kapoor, its managing director. Before and since the Fabindia deal, L Capital Asia's investment intentions have been the subject of much interest. It is rumoured to be considering buying stakes in Raymond, beleaguered children's wear retailer Lilliputand Gitanjali Gems. The fund is also said to be in talks to increase its stake and ink a separate joint venture with Genesis Luxury Fashion to showcase ethnic haute couture. Thakran declined to comment on these transactions, saying only that L Capital Asia will invest in all sectors that tap into India's rising domestic consumption. This can mean investments in apparel brands, lifestyle retail, food & beverages, beauty and wellness. The fund will also take big bets on signature brands that focus on children, women and young adults, said Thakran, who honed his understanding of the Indian consumer market at Titan Industries and Swatch's India operations. L Capital Asia is clear that it will back mature brands with investments of $50-100 million but will not shy away from larger investments where it can join hands with its LPs. For deals over $100 million, Thakran said the limited partners "are happy to co-invest." The fund has made eight investments, two each in Singapore, Hong Kong, mainland China and India, from its $640-million Asian fund, but in some of its investments it has invited co-investors from among its existing limited partners. Thakran said the fund would choose companies with high brand recall and in the top three in their category. A transparent management is also an important requirement, he added. Like other private equity investors, the fund is looking at returns of 25-35% over a 3-5 years but unlike other investors, profit expansion is paramount, not the multiples of return on investment, Thakran said.
10 MAR, 2012, 07.08AM IST, RAVI TEJA SHARMA,ET BUREAU

Luxury retailers hiring and training staff in local dialect and retail etiquettes to woo new rich
NEW DELHI: Priya Sachdev Chatwal, who sells international luxury brands such as Alexander McQueen, Lanvin and Stella McCartney brands in India, sometime last year noticed that several new visitors looked lost in her multi-brand chain Kitsch. So she hired some stylists at her Mumbai outlet to guide such customers through different brands, styles, combinations, fashion trends that suit them, and instructed her staff to talk to them in local dialect if that makes them more comfortable. It proved a masterstroke. It helped her nurture many customers who are among her top clients today.

A growing band of nouveau riche with an urge to splurge on luxury lifestyle is forcing retailers to redefine luxury marketing in the country by getting staff to converse in local dialect and adopt homely etiquettes. "Luxury cannot afford to intimidate," says Chatwal, chief operating officer and creative director of TSG International Marketing, which runs Kitsch. This new class of luxury consumers is not necessarily aware of the trends emerging out of the fashion houses in Paris and Milan and, often, picks up the costliest item off the shelf partly because they cannot tell between labels. They find the opulence of shops in five-star hotels and Englishspeaking salespersons intimidating. Realising this, luxury retailers are stepping out of starred hotels on to the street-side malls, hiring people who can converse in the local dialect and training staff afresh in retail etiquettes to make customers feel at home and educate them on brands. "You have to accommodate the rich and the new rich under the same roof," says Chatwal. And that's perhaps the biggest challenge for luxury retailers in India. RICH AND CONFUSED While there is one set of clients that flies to Champs Elysees in Paris to pick up their favourite totes and clutches from Louis Vuitton's flagship store, there is the other who wants to buy "that thing" Aishwarya Rai wore in a recent Bollywood flick. "Which language to converse in is a key decision that the store staff needs to take, quickly," says Nikhil Mehra, VP at Genesis Luxury, which represents brands such as Canali, Jimmy Choo and Bottega Veneta, and has a JV with Burberry in India. Prof Abraham Koshy, professor of marketing at IIM-A, says the two sets of consumers will co-exist. The luxury market in India is growing at 20% ayear and is expected to expand to $14.7 billion by 2015, from $5.8 billion currently, according to a recent report by The Economic Times, CII and AT Kearney. "The nouveau rich consumer is more ostentatious in his behaviour and luxury products allow him to make a statement," says Prof Koshy. EDUCATING CUSTOMERS These new shoppers of luxury already contribute nearly half of luxury product sales in the country and are growing at 50% a year. "This is where the big growth is coming from," says Abhay Gupta, former executive director of Blues Clothing Company that represents brands like Versace, Corneliani, Cadini and John Smedley in India. Gupta, who is now chief executive officer of Luxury Connect, a luxury service provider, says that around every wedding season, malls such as DLF Emporio in New Delhi, are thronged by men and women descending from small cities in Punjab and Haryana with bagful of money. WHAT BRANDS DO While money is no bar for these customers, handling them is a fine art that many brands are trying to master. Brands such as Corneliani, for example, have created a separate room within their stores for closed-door selling. "They like it. It's like pampering them, assuring them," says Salesh Grover, brand head for Corneliani.

Retailers like DS Group, which has the India franchise for Italian made-to-tailor suit brand Tom Ford, spend time in educating these customers. "For instance, we have to educate them on why a Tom Ford suit costs Rs 200,000 and how the suit is constructed. Some of them are eager to learn the difference between brands," says Ritesh Kumar, director at DS Group. "The old rich already know what they want while the new customer likes to compare and decide," he says. Amy Arora, brand manager for luxury carmaker Bentley, says that customers at Bentley showrooms aren't just from the top layers of society. There are farmers and traders from small towns who have made their millions from the India growth story in the past few years. "We have to impart more knowledge on the brand to these consumers, make them understand the heritage behind the brand," says Arora. "Even the body language has to be different." Today, India has three million affluent households, defined as those with more than $100,000 (about Rs 50 lakh) of investable surplus, says a global affluence study by research firm TNS.

Herms reports new sales record in 2011

News

10 February 2012

The luxury house Hermes has set a new sales record in 2011, to 2.84 billion euros (+18.3%), the highest of the range predicted by analysts, and expects an operating margin up over 30% on 2011, according to a press release Thursday. Hermes, which had raised its forecast twice in 2011, exceeding its target of annual growth in sales of 15-16%. The sales were driven by America and Asia (excluding Japan), a region where six new branches were opened during the year 2011, one of which attracted considerable attention in Bombay (India).

Hermes takes advantage of "sustained activity" in the fourth quarter, when sales grew 15.8%, and confirms the very strong health of the luxury world. Over the year, the maker of silk scarves recorded both sales "very aggressive" in its stores (19%) and a net increase in its wholesale sales (15%).

Despite the tsunami, the turnover in Japan, the first market of Hermes for two decades, is almost stable (-1%). And outside Japan, Hermes strong growth in all regions where it operates. The growth was very strong in all its businesses, particularly with a jump of the division Clothing and Accessories at 30%. But the jewelry is almost as good (27%). Hermes will publish its annual results on March 22, confirms that it should beat its record operating margin. It "is expected to grow significantly and exceed 30% of turnover", against 27.8% in 2010. For 2012, Hermes, which has a deficit in itsproduction capacity, plans to continue investing in this sector and in developing its distribution network, with the opening or renovation of fifteen stores.

23 MAR, 2012, 05.49AM IST, RAVI TEJA SHARMA,ET BUREAU

Italian fashion house Roberto Cavalli to bring luxury range in India

NEW DELHI: Gianluca Brozzetti, the chief executive officer of Italian fashion house Roberto Cavalli, is turning to wealthy shoppers in India and other Asian countries to deliver on his plans to turnaround the company which was badly hit by the recession over three years ago. Only a month ago, Brozzetti had said that the European luxury market was in evident difficulty. "Whoever denies this does not want to face the reality," he had reportedly said earlier. Cavalli has made a late entry into India, a market where an ever growing rich and young consumers are willing to spend on a luxurious lifestyle. "We recognise this enormous opportunity in India. So, we are bringing our line of luxury products. That would, in addition to our line of clothes, include furniture, textiles and even cutlery... Yes, we maybe late, but one has to be patient with this growing market..." Brozzetti, who is in India, said in a telephonic interview from Mumbai. In recent years, the Italian fashion house has been experimenting with new strategies including a new fashion line for the youth called Just Cavalli. It is also opening Cavalli Cafe, a hospitality initiative which the company is using to expand, especially in the Asian market. For the last few years, the Cavalli family has been concentrating on growing business in Europe and the US. "It was like they had forgotten that there was an Asia Pacific. But these markets are important," says Brozzetti, who is now opening stores in Tokyo, Beijing and Delhi. Brozzetti said the company would open a Cavalli Cafe alongside its Cavalli store at the Emporio in New Delhi. "It complements the brand. It will showcase the peculiar lifestyle of Cavalli and the design will be along the line of what can be seen inside Roberto Cavalli's home in Italy--his boat, private jet, helicopter," says Brozzetti. The hospitality business of Cavalli includes cafes and clubs. The brand will open its second store and cafe in India, in Mumbai in the next few months and will target the growing demand in smaller cities through exhibitions and trunk shows. Apart from this geographical diversification, the company is also getting into newer product lines. It is heavily developing leather goods and is also launching a new brand called Roberto Cavalli Home, which will enter India too. This new brand will sell furniture, textiles, crockery and other products that go into designing a house. This will be part of its hospitality business. "Our Cafes will use this product and customers can see and experience these products and then buy," he says. The company's other brand, Just Cavalli, which had been in India earlier through its older licensee company, focusses on younger customers. Now Diesel has got the global license for the brand and should come back to India soon, says Brozzetti. ET had reported earlier that Roberto Cavalli has signed a franchise deal with Infinite Luxury that has been set up by Indian fashion designer Manav Gangwani, Dubai-based entrepreneur Sahiba Narang and finance expert Rahul Kapoor.