Versace entered India with a franchise agreement with Sehgal Brothers. But the marriage did not last long and in November 2012 Versace terminated its contract with Sehgal Brothers. The arrangement soured because Sehgals couldn’t live-up to the terms of their agreement with Versace. In fact the finances of Sehgal brothers were so mismanaged that they defaulted in paying rent to DLF Emporio. What could have been more embarassing for a luxury brand that the store’s electricity supply is cut-off?
Since Versace terminated its contract with Sehgal Brothers, speculations were on that they will sign-up with Genesis Luxury or come in as a 100% subsidiary. But now through reliable sources we have discovered that Versace has finally inked the deal with Infinite Luxury.
Infinite Luxury owned by Sahiba Narang, Manav Gangwani and Rahul Kapoor is rapidly acquiring brands and growing to be a strong player in the luxury retail business. The group kicked off with introducing Roberto Cavalli and Cavalli Caffe into India. This was followed with tie-up with Italian knitwear giants – Missoni and and the brand known for its eclectic prints – Emilio Pucci. Add to that Versace and that makes Infinite Luxury holding licenses of five uber-luxe brands for India.
The Italian luxe label – Prada had been ignoring the emerging economies while other brands in its league moved in much earlier. Prada’s absence in India is rather conspicuous but anyway – better late than never. Sellers of luxury products are seeking to move out of developed markets that have been hit by global economic uncertainty and find new buyers in emerging economies and Prada is amongst them.
But then coming late has its bag of problems. As per sources what is majorly bothering Prada is the availability of retail space. DLF Emporio in Delhi has 100% occupancy and there is absolutely no scope of prime location on the ground floor where Prada would ideally like to be. Even Palladium has no availability of prime store space in the mall.
Though the Government of India has allowed 100% Foreign Direct Investment in single-brand retail, the luxury labels are still preferring to go with an Indian partner. No names are officially disclosed as in who all are in talks with Prada but the signals are very much hinting at Genesis Luxury and Reliance Brands. Both are in talks with Prada.
Prada has a lot of promise in India as it is a label that is well known and they brand offers a whole range of menswear, womenswear, bags and accessories. It also has a sister brand for womenswear – Miu-Miu. But let’s wait and watch if and when Prada make its Indian entry.
I was shocked out of my wits when while browsing through the stores at the DLF Emporio I found the Versace and the Corneliani stores in absolute darkness. No the stores weren’t closed. They were open and sales staff were around. Since Blues Clothing Company, the franchisee of Versace and Corneliani in India haven’t paid the rentals, their electricity has been cut-off by DLF Emporio.
The fact that Versace and Corneliani, both are all set to part ways from Dinesh Sehgal headed Blues Clothing Company(BCC) is common news, I was still shocked to see BCC in such dire straits. Come on, they should have shut down the stores as Emporio cut-off power supply from the 1st of May for rental defaults. The stores were open and staff were there but there wasn’t even a battery operated lamp or a simple candle lit in either stores. What business do the Sehgals wish to do in pitch darkness? In fact it is harming whatever goodwill or reputation they are left with.
Lot of people have burnt their hands by jumping in to Luxury Retail Business. There are endless failure stories. Giants like DLF Group found it tough so wonder how modest retailers like Sehgal Brothers thought of pulling it off. Luxury Business has a long gestation period and it is only after 5-6 years that the franchisee can expect returns.
I think even these mammoth brands are at fault. Most of the tie-ups have been done without any due-diligence and market investigation of the prospective franchisees. Luxury Retail is totally a different game and if Dinesh Sehgal thought that by selling Versace, Corneliani and Cadini suit-lengths he has mastered the business of handling luxury retail in India, he was wrong. The Luxury Houses and their high-nosed arrogance is also responsible for the gloom in Luxury Retail. To send a Memo the franchisees need approvals from the Headquarters so you can understand the (dis)trust factor among licensor and licensee and the resultant red-tapism.
In my previous post – Bling Boys – Cavalli and Gangwani – posted on the 15th of January 2012 ( http://wp.me/p1C8a1-MR) where I wrote about Roberto Cavalli and Manav Gangwani spotted together at the Milan Menswear Week, I had an inkling of some kind of tie-up working out but I preferred to wait till the papers were signed. Manav Gangwani is on a diversification spree and his fashion retail wing – the Infinite Luxury Group is the Indian Licensee for the Roberto Cavalli Brand.
Just Cavalli was introduced in India by Genesis Luxury but the contract was terminated in 2010. Roberto Cavalli is the premium label from Cavalli and the first mono-brand store of Roberto Cavalli is scheduled to open in Delhi at the DLF Emporio in May 2012. The 4000 square feet, boutique will embody the modern elegance and glamour of the Cavalli world, and represent the innovative ‘global fashion store’ concept, like other Cavalli flagship stores located in other major cities like London, Paris, Tokyo and New York. The boutique will be created using the finest materials, many of which are produced in Italy exclusively for Roberto Cavalli. The Indian boutique will feature women’s and men’s prêt-à-porter collections, as well as accessories, eyewear, timewear and kidswear.
While Sonam Kapoor was Tweeting and feeding the Indian media about gracing the front-row at the Roberto Cavalli Fall 2012 RTW Show in Milan and tom-tomming about dining with Roberto Cavalli, Manav Gangwani was giving the final touches to this partnership deal. Besides fashion Cavalli Cafe is also opening up at the DLF Emporio and the buzz is that Cavalli Club too is in the Infinite Luxury Group’s plan of schemes soon.
Speaking on this venture, Mr. Roberto Cavalli – President of the Roberto Cavalli Group – stated: “I am sure that Indian ladies will love Cavalli clothes and will be great customers in my store as my fashion seems perfect for them. Indian women are beautiful, elegant, sophisticated, sensual and they want to look divine and fantastic. I do believe in the Indian market and I love the taste for fashion of Indian people …. they have a way to mix and match bright colors that is so exciting, and really close to my optimistic vision of fashion and glamour”.
Eyebrows were raised when Tom Ford signed up with DS Sons, a subsidiary of Dharampal Satyapal (DS) Group as their pan-India Licensee. Reasons were simple – DS Group is into the business of Pan Masala, Bottled Water and lately the group has forayed into Infrastructure and Hospitality. A closely held group with absolutely no exposure in luxury business entering into a Joint Venture with one of the snobbiest of fashion labels – Tom Ford – did surprise us all.
But then the second generation of DS Group – the Swiss educated Ritesh Kumar with the strength of their strong balance-sheet did manage to win over Tom Ford. DS Sons headed by Ritesh Kumar opened the first Tom Ford store in DLF Emporio in December 2010 and their second store in Mumbai – in Taj Mahal Hotel should have been up by now but it isn’t.
Business is not good at the Tom Ford store at Emporio. The brand is anyway priced much higher than other luxury labels and it needs an esoteric taste to wear and carry off Tom Ford styles. When I was browsing through the slim-fitted Tom Ford jackets and suits at their Emporio Store I was sceptical if there are takers for such high-priced clothes. People who have the money wouldn’t fit into those severely fitted shapes but yes they had the ‘Made-to-Measure’ Option but then they costed a bomb.
I have heard that the DS Group is not happy with the way the business is moving. All the merchandise is picked up by Ritesh and his brother and I doubt they can do a job, which a professional could do. Tom Ford who is so secretive about his collections that he bans cameras at his previews and showings would definitely be a tough man to do business with. I am sure DS Sons are forced to order a minimum volume of merchandise and poor guys are stuck with them.
Luxury may look like an attractive business with shit-loads of glamour to many but then believe you me, it isn’t so. So many have burnt their fingers but then that glamour angle still allures many.