Saks, Aditya Birla put off plans to open maiden store in Gurgaon

American luxury department store chain Saks, owned by Hudson's Bay Company has stalled plans to open their first store in Gurgaon's Aerocity. As per sources Saks Fifth Avenue had to open its first store in partnership with the Aditya Birla Group in Aerocity, one India’s rapidly-growing tony zones, followed by a second one in Mumbai's Bandra Kurla Complex.

Saks Fifth Avenue operates around 50 stores in upscale locations across the world, including Beverly Hills and Bahrain, with its flagship store in Midtown Manhattan in New York.

The compounded growth rate of the number of Indian high net worth households over the last five years was 16 per cent, with 1.5 lakh such households having a combined net worth of Rs 135 lakh crore in FY16. This is expected to grow to around 3 lakh households with a combined net worth of Rs 300 lakh crore by 2021. And interestingly, in contrast with traditional trends, currently around 59 per cent of ultra-high net worth individuals (HNIs) prefer to shop for luxury goods at home.

Experts say large Indian businesses such as the Aditya Birla Group, may not be prudent to venture into the niche luxury segment. Companies, including Reliance with Jio and D-Mart, have shown that India excels when it comes to mass-market segments. Saks Fifth Avenue may be a great vanity name, but for Birla luxury may not be the ideal opportunity to spend energy on at the moment.