Bridge-to-luxury brands gain momentum in India

After the CII-AT Kearney report said that the India luxury market is growing at 20 percent per annum and the luxury market is evolving more rapidly than most of us had foreseen, there has been a flurry of brands entering the country. While

the government has relaxed FDI norms and allowed 100 percent foreign investments in single brand retail, most of luxury brands are either sticking to the existing partners or looking for new arrangements.

It may be recalled the CII-AT Kearney report had stated that the luxury market is estimated to have reached 5.8 billion dollars (Rs 31,523 crores). Luxury products have grown the fastest at 29 percent, well above the expected 23 percent. But as per players like Genesis Luxury, Reliance Retail and Arvind Brands, it’s the ‘bridge-to-luxury’ brands that are doing well in the country.

Furla, for instance, which opened a store in Mumbai last September, is already one of the busiest outlets of Genesis Luxury, India’s largest luxury fashion retailer that sells luxury labels such as Armani and Burberry in the country. The outlet is raking in monthly sales worth Rs 6,000 per square feet. And though the brand is relatively less known in India, it has received good response from returning consumers.

Most Indian fashion retailers are shifting their focus to ‘accessible luxury’ or brands that occupy the long bridge between luxury and premium both in terms of pricing and perception. This, at a time, when luxury brands are still struggling to make a headway in the country. Priced anywhere between Rs 3,000 and Rs 20,000 for accessories and apparels, such brands are becoming popular among consumers looking to get above premium brands such as Zara and Tommy Hilfiger but can’t afford high-end luxury brands such as Gucci or Dior.

Accessories, bags and shoes occupy the main product portfolio in this segment with very limited clothing range. So, there is more traction towards bridge-to-luxury brands when it comes to clothes. Even high-end malls are looking at increasing presence of bridge-to-luxury brands citing enthused consumer response.

Experts point out this is democratisation of luxury as these brands make luxury-like products accessible to the middle-class and upper-middle class consumers. A number of bridge-to-luxury brands such as Diesel, Cabtree Evelyn and Sephora are already in India while others such as Vince Camuto, Brooks Brothers, Thomas Pink and Stuart Weitzman are in queue.

Reliance Brands, for example retails luxe brands like Paul & Shark and Zegna, aggressively ramping up its bridge-to-luxury portfolio. It joined hands with LVMH Group-owned Thomas Pink, American men’s clothing chain Brooks Brothers and footwear brand Stuart Weitzman. The company already sells Diesel products at 12 single-brand stores.

Arvind Lifestyle Brands on the other hand, plans to invest Rs 25 crores in retail expansion of its bridge-to-luxury brands while expecting Gant and Nautica to become Rs 100 crores brands by 2015-16. Genesis has already tied up with accessible luxury brands such as Vince Comuto, Sephora and Armani Jeans besides Furla. It plans to open around 24 stores of these brands in the next two years with an investment of about Rs 50 crores.