High rentals dwarf luxury brands’ India gameplan
Source: Financial Express (Original Article)
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New Delhi, Mar 28 For several avant-garde luxury brands hitting the Indian shores, high rentals are already spoiling the party. Most are forced to charge a higher price for their goods in India as compared to picking up the same product in a market elsewhere in the world. Rentals and duties remain the key factors behind pushing up costs. On Friday FE spoke to a number of luxury retailers on the sidelines of the Mint Hindustan Times luxury summit. Of the two, rentals were considered the key reason by a unanimous choice. The cost of renting premium real estate is already similar to that in many developed luxury Markets despite the Indian market for luxury goods being still in its nascent phase. This, too, in India comes without the necessary infrastructure for promoting sales.
At present, there are only a handful of developers that are getting into developing luxury real estate like DLF Emporio in Delhi, UB Mall and MBD Zephyr in Bangalore. As a result, most Companies like Armani, Ferargamo, Christian Dior, Piaget, Lieber among others have already booked these spaces. For the rest like Gas and Rivetti, these rentals continue to be inhibitive. “Luxury brands cannot pay luxury rentals, often up to Rs 6,000 per sq ft, unless there are returns,†says Vivek Kaul, national director, JLL Meghraj, who have provided consultations to some of the upcoming luxury malls. Says high-end apparel brand GAS Apparel’s Gautam Vazirani, “for us the choice is to open stores in five cities or open a space in Delhi’s DLF Emporioâ€. Alessandro Raniolo, MD, premium menswear brand Ermenegildo MEDIUM dvd Zegna agrees that “the rents are …continue reading