Armani changes local partner in India, yet weary about direct investment
Italian luxury house Giorgio Armani, present in India with two Emporio Armani stores and a Giorgio Armani label store, is ending its Indian joint venture with DLF Brands, a division of real estate giant DLF. The Italian fashion house will now enter into a franchisee deal with Genesis Luxury to expand its retail presence in India.
DLF Brands Chief Executive Officer Dipak Agarwal said the break-up with Armani is in line with its strategy of withdrawing from luxury. “We are not expanding in luxury anymore. Also Armani wanted to move to a franchise mode which we could not do,” he said.
The retail arm of real estate developer DLF and Giorgio Armani set up a joint venture in 2008 to roll out retail stores of the luxury brand. Armani held 51% equity in the venture.
Armani will now sign a franchisee deal with Genesis Luxury, which has a joint venture with Burberry in India and represents brands such as Canali, Jimmy Choo and Bottega Veneta in the country.
Once the deal is signed-it is expected this week-Genesis will take over the management of the three Armani stores in India. It plans to open 20 more Armani stores over the next four-five years and take Emporio Armani, Giorgio Armani and Armani Jeans brands to cities such as Chennai, Bangalore and Kolkata.
The Italian firm’s interior design studio Armani Casa had recently partnered with Mumbai-based real estate developer Lodha Group to design the interiors and decor for their luxury homes project World Towers in central Mumbai. Armani Casa has earlier designed residences at iconic projects like the Burj Khalifa in Dubai.
It is also likely to set up Armani Casa retail stores with a local partner to sell its high-end furnishings and home accessories in the country. India is one of the fastest-growing markets for luxury products, expanding more than 20% a year.
Despite changes in the FDI (Foreign Direct Investment) international luxury brands still show reserve in terms of expanding directly in India, a major reason for the sluggish development of the luxury market in India.
adapted from Economic Times / comments by CPP