The global downturn has not impacted plans of luxury retail biggies to expand operations across geographies.
Donna Karan New York (DKNY), label of the fashion designer Donna Karan and part of the world’s leading luxury group LVMH (Moet Hennessy Louis Vuitton) is entering India through a tie-up with DLF Brands, DLF’s wholly-owned subsidiary.
The luxury retailer’s entry into India is part of its global expansion strategy, having recently forayed into South Korea and China.
DKNY and DLF Brands have entered into a sole franchise agreement under which the latter company will retail the premium brand’s apparel and accessories.
DLF Brands has luxury lifestyle labels like Armani and Ferragamo under its stable, and introduced premium brands like Alcott and Sia Home Fashion through similar franchise agreements last year.
Armani, Ferragamo and Boggi are separate joint ventures where the foreign company holds a majority shareholding of 51%, with DLF Brands holding the balance stake.
DLF Brands MD Kelvin Coyle said: “We plan to open five DKNY stores over the next five months, and 28 stores over the next five years. Luxury retail is growing at 6-10% year-on-year, and we are meeting our targets set last year.
Our strategic intent is to introduce 12-15 global premium brands to the discerning Indian consumer over a period of five years by opening 500 stores across top two metros and six cities which account for over 55% of our consumer base”.
Of the country’s total retail market of over $350 billion, luxury segment accounts for around 1%, and is growing at a steady pace of nearly 10%. He said that the agreement was a culmination of discussion between the two companies which had started over two years ago, and luxury retail has not been impacted significantly by the downturn.
DLF Brands plans to enter cities like Hyderabad, Chennai and Bangalore by the year-end with a mix of their brands, and is in talks with other mall developers for opening stores.
The company, which is gung-ho on its expansion, has revised its store rollout plan by 25% in the wake of the economic slowdown but still plans to open another 13 stores over the next four months, taking up the total to 40-45 stores by year-end.