Luxury retailers regain confidence

For the first time in the last six months many global brands made their way to India. While Versace

opened its flagship boutique in Emporio last November, this year saw the entry of Vacheron Constantin, the world’s oldest Swiss luxury watchmaker. Also, German carmaker Porsche opened its design studio and Italian fashion house Gucci opened its boutique.

 

India’s finest luxury retail addresses, Emporio in Delhi and Palladium in Mumbai, have recorded good growth in the last six months, reflecting rising consumer confidence. There has been a 20 to 25 per cent increase in the overall revenues of retailers at Emporio. Since October the mall has regained footfalls of 35 per cent. Vacheron Constantin chose Emporio instead of a hotel because the mall has a lot of potential buyers who fit its kind of clientele.

Palladium which opened in Mumbai last year has 65 high-end brands and more are expected to come in. However it is not correct to measure performance of luxury malls only in terms of footfalls. Conversion is more important. In the initial days a lot of people walk into a mall to get a look and feel. But how many people actually buy becomes more critical. And the margin a luxury retailer gets from selling one product is 100 per cent, sometimes more.

Emporio claims 80 per cent people visit the mall with the intention to buy. Demand in the luxury segment is picking up if one goes by footfalls and conversion ratios. Many retailers have been recording 10 to 12 per cent growth over the last two months. Luxury retail is growing at 40 to 50 per cent per annum and has the potential to grow at 60 to 70 per cent in the near future.