Some global luxury retailers operating in India are again scouting for new partners as their existing tie-ups have failed to meet expectations in the sub-continent. Perhaps one reason could be due to the existing foreign direct investment (FDI) regulations which allow only 51 per cent stake in single-brand retail. In fact, many luxury brands have been forced to either enter into joint ventures with local companies or forge tie-ups with a group of Indian investors. Some global retailers, push for short durations alliance with call options as they anticipate that the government will eventually allow 100 per cent foreign investment in single-brand retail. In the last five years, several leading luxury brands have parted ways with the partner and have formed new alliances. Several have gone and changed partners more than twice. The best example, of a break-up between a global brand and an Indian partner was between the poster boy of luxury in India, the Murjanis, and Jimmy Choo and Bottega Veneta. Both the brands dumped the Murjanis for Genesis Colors. Similarly, Ermenegildo Zegna, one of the first luxury brands to set up shop in the sub-continent, has now tied up with Mukesh Ambani’s Reliance Brands, while Paul Smith chose to ally with Genesis Colors. Even Genesis, with quite a few well-known luxury brands in its portfolio, was dumped by German luxury brand Aigner last year. Read Full : Break ups or tie ups: Global luxury brands rethink India strategy - Fashion - news - Fashion News India, jobs, network, apparel, business
Thursday, 21 July 2011
Break ups or tie ups: Global luxury brands rethink India strategy
Some global luxury retailers operating in India are again scouting for new partners as their existing tie-ups have failed to meet expectations in the sub-continent. Perhaps one reason could be due to the existing foreign direct investment (FDI) regulations which allow only 51 per cent stake in single-brand retail. In fact, many luxury brands have been forced to either enter into joint ventures with local companies or forge tie-ups with a group of Indian investors. Some global retailers, push for short durations alliance with call options as they anticipate that the government will eventually allow 100 per cent foreign investment in single-brand retail. In the last five years, several leading luxury brands have parted ways with the partner and have formed new alliances. Several have gone and changed partners more than twice. The best example, of a break-up between a global brand and an Indian partner was between the poster boy of luxury in India, the Murjanis, and Jimmy Choo and Bottega Veneta. Both the brands dumped the Murjanis for Genesis Colors. Similarly, Ermenegildo Zegna, one of the first luxury brands to set up shop in the sub-continent, has now tied up with Mukesh Ambani’s Reliance Brands, while Paul Smith chose to ally with Genesis Colors. Even Genesis, with quite a few well-known luxury brands in its portfolio, was dumped by German luxury brand Aigner last year. Read Full : Break ups or tie ups: Global luxury brands rethink India strategy - Fashion - news - Fashion News India, jobs, network, apparel, business