Italian luxury brands Salvatore Ferragamo and Giorgio Armani are considering chaning their existing local partner, a subsidiary of real estate developer DLF, and have been talking to other corporate groups and investors.
Over the last five years, several leading luxury brands have already parted ways with the partner they chose to come to India with and have formed new alliances.
Several have changed partners more than twice. The best known example of a break-up between a global brand and an Indian partner was between the Murjani family and Gucci three years ago and more recetly, with Jimmy Choo and Bottega Veneta, both the brands dumped the Murjanis and opted for Genesis Colors. There are several other examples of luxury retailers changing partners. Ermenegildo Zegna, one of the first luxury brands to set up shop in India, has now tied up with Mukesh Ambani’s Reliance Brands, while Paul Smith chose to ally with Genesis Colors. Even Genesis, which has several well-known luxury brands in its portfolio, was dumped by German luxury brand Aigner last year.
The crux of the whole problem is the standard template of a relationship that is short term and one sided in favour of the brand owner. Zegna and Reliance fought long over who would be the CEO of the alliance. Reliance insisted on having their own man while Zegna preferred their own. Add to this the problems of acute shortage of high quality real estate to house retail outlets, high customs duties that push up retail prices and the buying habits of the Indian consumer who is terribly value-conscious.
Global Luxury Brands opt for alliances of short durations and keep the controls in their hands as they anticipate that the government will eventually allow 100 per cent foreign investment in single-brand retail. But will the Government do so? I don’t see that happening any time soon.
JP Singh, the head-to-toe branded Surdy who is nowadays more famous, rather infamous for being incriminated in the notorious MCI scam is back to what he does best – showing off his moolah power with crass consumption.
But JP seems to have diluted his loyalty to Louis Vuitton and moved on to Armani. Reason though has got to do more with Armani’s sales girl, Lipika than the merchandise. Recently JP spent a whopping Rs. 15 lacs shopping at the Armani store at DLF Emporio and in return the outgoing salesgirl doesn’t mind being JP’s arm-kandy. In fact JP has got Armani a new customer, his friend Pawan Vora, who courtesy his Guthka money is also a big-spender. Atul Midha should really promote this girl Lipika for getting good sales. I don’t know if it is Armani’s new sales strategy – to lure in customers with a perk thrown in as a dinner date with the sales girl. I spotted JP and Lipika at 360 degrees at The Oberoi having a cozy dinner!
In fact Pawan Vora, JP’s pal had the luxury of celebrating his birthday, cutting cake and popping champagne within the Armani store at Emporio. I doubt if many have had this privilege at Armani stores worldwide. Way to Go, huh!
Before Armani entered India there was a huge expectation from the brand and brand gurus predicted that if one brand that will literally rock in India amongst fashion & luxury labels, it’s Armani. Armani tied-up with one of the most powerful conglomerate of India – the DLF group. Yet two years down the line, Giorgio Armani and Emporio Armani are showing the most pathetic results. What could be the reason or rather reasons?
Atul Midha, the man who runs the show in India is definitely lagging behind when it comes to promoting his brand. Heard he loves to spend more time in Milan than Apna Desh! In fact more esoteric brands in Menswear like Ermenegildo Zegna, Canali, Brioni, Paul Smith, Corneliani and Burberry are faring much better than Armani. Giorgio Armani’s past few collections were strongly influenced by India yet the Guru Jacket from Zegna or the Nawab (Bandhgala) Jacket from Canali created more flutter and sold much better.
Even the lunching-ladies are skipping Armani and rather going for Chanel, Marc Jacobs, Pucci, Dior, Miu Miu, DVF, Ferragamo, Tod’s and Herve Leger.Recently a Armani travel bag was on a discounted offer (Midha once tom-tommed, “Armani doesn’t do ‘SALES’.”) - the Rs. 80k bag was offered for approx. Rs. 50k by a site called fashion fad and yet there weren’t many takers.
Many fashion conscious gents have told me that the merchandise at Armani stores in India is sad. Pia Singh should take stock of things and see that her smartly attired GM who speaks with a borrowed accent is not just big-talk but some hard work too. And yes, their PR is absolutely pathetic. What else could be the reason for Armani being so lackluster here even when it’s got the best location at DLF Emporio???