Jaeger-LeCoultre applies to DIPP for single brand FDI

Swiss luxury watch brand Jaeger-LeCoultre has applied to the Department of Industrial

Policy and Promotion (DIPP) to enter India through the 100 percent single brand retail route. It is the first luxury company to apply for foreign direct investment through this route after the segment was thrown open to fully-owned foreign subsidiaries.

Jaeger-Lecoultre is owned by Geneva-based Richemont SA that also owns other luxury watch brands including Cartier and Piaget, jewellery brand Maisons and Montblanc pens. As per DIPP website, Richemont has filed the application with the department. According to single brand FDI mandate, any single-brand retailer applying to opt for more than 51 percent FDI must source 30 percent of its merchandise locally. Many luxury and high-end retailers were unhappy with this clause and held back their India entry plans citing it as the roadblock.

It is unclear, as to how Jaeger-LeCoultre would adhere to the FDI rule. Watches from the brand’s portfolio are priced from Rs 5,30,000 to as high as about Rs 30 lakh, according to the company's US website. Richemont reported total revenues of 10 billion euros (Rs 84,187 crores) in 2013 with an operating profit of about 2 billion euro (above Rs 16,000 crores) that year. Almost 86 percent of Richemont's revenues come from Europe and Asia Pacific while the rest comes from the Americans.