Haute nights in India with Cavalli Club

Now that India is officially a huge market for luxury, it was only

a matter of time before the appearance of deluxe lifestyle brands like Cavalli to extend their portfolio beyond designer wear. The latest news is that Roberto Cavalli wants to launch a namesake nightclub in India, hoping to recreate an experience similar to the $30 million Cavalli Club in Dubai. The club in Dubai, located in the Fairmont Dubai hotel, prompted the India foray. According to a Pragma Group SAL spokesperson they noticed that a big bulk of their clientele base in Dubai consists of Indians and hence the move.

Pragma Group SAL, a Lebanon-based holding company that holds the franchise for the Cavalli Club, has asked Deloitte Touche Tohmatsu to raise nearly $25 million, and look for a partner to launch the club in India. Pragma has the exclusive franchise for the club in many regions including the Middle East, India and Brazil. It’s now exploring starting Cavalli Cafes in several cities in India.

However, some experts say even though there is a market for luxury clubs, it isn’t as rosy as it seems. Entertainment clubs have to overcome the fact that these units thrive on novelty and a fickle customer base. High operating costs, including getting nearly 20 licenses and paying 25n per cent VAT, can be a heavy burden on operators. Rough estimates reveal that to survive, the club will require around 600-700 patrons every weekend with per person spend of around Rs 3,000 to 4,000.

Jay Singh, co-founder and executive director of JSM Corp which operates the Hard Rock Café franchise in India, feels despite growing affluence, India is still a very price-sensitive market. Singh talked from experience as he had to pull the plug on FTV Clubs in Delhi and Bangalore in 2004 as after two years, they proved unsustainable projects.