The Arnault Empire grows in India

Bernard Arnault is a French businessman who is also the world's 4th and Europe's richest person,

with a net worth of $41 billion in 2011, according to Forbes Magazine. Arnault is the founder, chairman, and CEO of LVMH, the world’s largest luxury goods conglomerate consisting of over 50 luxury brands, including Louis Vuitton, Dior, and Fendi. Arnault’s empire of luxury just grows and grows. Earlier this year, Arnault set up L CAPITAL, an investment fund with $640 million to spend on Asia. One of the first targets was leading Indian jeweler Gitanjali Gems, which could, now be followed by Genesis Colors, a local joint venture partner and exclusive distributor of Jimmy Choo, Canali, Bottega Veneta, Kenzo, Paul Smith and Roberto Cavalli. Another possible target in India frequently being mentioned in local media is Khanna Specialty Retail, which is also the local joint venture partner of French luxury brand Hermes.

Arnault’s move to buy out local luxury retailers is a strategic one which could have a major impact on opening up India’s luxury market. While Brazil, Russia and China, three of the four BRIC countries have shown a phenomenal consumption for luxury brands followed by the influx of these brands spreading across the domestic markets in these countries, the story is a bit different in India. Indeed there is no dearth of luxury consumers in the sudden cash rich country, India is steeped with its local red tape and high levels of corruption, which the international brands find a tad daunting. Adding to that the outrageously high import taxes that the government continues to levy as well as not too business friendly laws for foreign brands, has resulted in far lesser international luxury brands’ penetration here compared to the fellow BRIC countries.