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.
Sonam Kapoor bought a Salvatore Ferragamo Stingray Razza Long Clutch from the Ferragamo Store in DLF Emporio in New Delhi and for, which she was scrupulously overcharged by Rs.15,000 by the Store management. I mentioned about Sonam getting fleeced by Ferragamo, India in this Blog but Soam didn’t care to bother. Agree she’s making enough money to ignore a paltry 15 grand but on the hindsight, possible that she kept mum because she bought an Exotic Stingray clutch, which may not be a legal thing to do.
It’s not just Salvatore Ferragamo that may be selling Exotic Leather Goods. I myself saw premium De Grisogono watches in Stingray Leather Straps.
If this is all illegal, we must bring it to the notice of the authorities.
“I agree we shud not point fingers at individuals but it is also important for us not to cheat on our customers. Vimal, Prasanna & Ashish together have been cheating a lot of customers. They raise prices of products and sell to customers to meet budget. Sonam Kapoor had bought a clutch from the Delhi store for which the price was increased as the team was told that she would not get to know. They hve been doing this with a lot of their VVIP clients like Richard Madhok, Gaurav Khullar etc and it is sad as no luxury brand would do a thing like this. She would sell exotic leather in the store and tell the press that they are only press samples. She used to pick up store pieces from the Bangalore store and keep for herself. It is better not to have a management rather than have people like them who kill the brand.”
If anybody who is reading this can find out from Sonam how much she payed for the clutch she picked up from Salvatore Ferragamo at DLF Emporio in New Delhi, I will personally check if she was made to pay more and then take up the issue with Ferragamo bosses.
Also selling products made out of Exotic Leather is ILLEGAL and it needs to be verified upon.
Salvatore Ferragamo is facing some tough times in India. The new collection – ‘My Ferragamo did receive a tumultous reception at its launch, both in Delhi and Mumbai but the turn-outs at parties usually don’t translate in to sales. Ferragamo is closing down it’s Grand Hyatt store in Mumbai as the sales there don’t justify its existence.
Now comes another big decision from the House of Ferragamo. As per a highly reliable source, Prasanna Bhaskar’s stint as the Regional Director of Southeast Asia & India for Salvatore Ferragamo is coming to an end this December. The source also said that Ferragamo HQ is scouting for a dynamic person to head Ferragamo India and put the brand back on a growth mode.