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Luxury global brands begin early discounts

By Sujata Sachdeva

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Business

Despite several studies indicating high prospects of luxury segment in India and several luxury labels opening stores or signing up partners to venture here, labels in the country saw their net profit margins decline in the fiscal year 2013-14. These companies were also forced to start offering discounts earlier than the usual discount period kicks off.

Starting with Christmas Eve, around 100 high-end fashion brands including Armani, Gucci, Versace and Canali began up to 40 percent sale in Delhi's posh DLF Emporio mall, almost a week earlier than usual. Close to 90 percent of over 100 retailers in Emporio, a destination for luxury shopping, are on sale to get rid of piled up inventories and to make way for the fresh stocks.

Like many other luxury labels, Corneliani is offering up to 40 percent discounts. While some brands are organising preview events with wine and cheese to attract buyers into the stores, some are also giving their top clients a chance to make the best of the offers before opening up the sale to general public. Emporio, for example, has tied up with American Express to give its premium cardholders advance access to discount deals.

Meanwhile, premium and mass retail brands, too, have taken a hit in sales this year, mostly because of the discounts and sale events by the e-commerce companies. For example, Nijhawan Group, which operates about three dozen stores of Benetton, Adidas, Levi's and Nautica among others, has seen about 15 percent dip in its overall sales this season. And Kapsons Group, which operates around 200 franchised stores of Tommy Hilfiger, Benetton, Calvin Klein, Levi's, Puma and US Polo among others saw sales going down 10 percent-12 percent compared to last December.

The e-commerce boom, low consumer sentiment last year coupled with fall of rupee against the dollar are some of the reasons being attributed to the poor performance of companies managing international luxury brands in India.

Gucci
Versace