Four years after choosing Puducherry, erstwhile Pondicherry for its first manufacturing plant in Asia, French luxury goods giant Louis Vuitton has decided to sell its Indian unit to a Chennai-based firm – Leather Crafts India. The management made a formal announcement about exiting India on June 13. And guess what’s the reason behind LV saying bye-bye to India? It’s Labour Problem. Louis Vuitton’s decision to sell the unit comes as a major blow to India’s image as a competitive cost destination.
Louis Vuitton Moet Hennessy (LVMH) Group set up its Indian back office subsidiary as Les Ateliers De Pondicherry (LADP). LADP was set up jointly by Louis Vuitton and the Puducherry-based leather fashion brand Dilip Kapoor’s HiDesign. HiDesign did not take a stake in LADP but Louis Vuitton took a 5% stake in HiDesign.
The prospect of a change of management sparked labour unrest with the 200-plus Indian employees on LADP’s rolls going on strike since June 13 demanding that the firm regularize their services before winding up its operations and handing over the unit to the new owners. LADP has two plants—one in Kurumbapet here and the other in Perambai in Tamil Nadu—to manufacture leather components for Louis Vuitton products. The management’s announcement about exiting India on June 13 triggered the labour problem. LADP, which had regularized the services of its administrative staff, had not confirmed the 240 workers on its rolls in the last four years.
How are they doing in India in terms of sales? My impression is that the credit-fueled LV mania days are over. They’ve sort of gone the way of the Fendi and Gucci logo bags – completely irrelevant fashion-wise. Although loads of nouveau riche types in Delhi still cling on to their Gucci logo bags.
Just notice than none of the really relevant news gets responses on your blog. Labor issues are normal in India. some are politically instigated and others by media houses. Also the investment and LVMH presence is more of a global PR story for the group than a serious market proposition. And they have a PR machine in their Group rep Ravi Thakran who makes promises periodically in the press and then disappears.
Ah one more piece.. You are finally making sensible comments. I wonder how Mr. Ravi Thakran has not been exposed so far. Dig into his history in Omega (with his confidants Payal Jauhar) and then TAG Heuer. Lots of PR, on the board of all the companies he partners with in India and China. And so we hear lately it is PVR.
Yes PVR has got funding from L Capital…Rs. 180 Crores. I had written about it here. Also shared that might see L Capital funding Bollywood movies. It’s heading that way