NEW DELHI: Italian luxury firm Bulgari is in the process of finalising a local partner for its proposed reentry into India's high-end merchandise market, three persons familiar with the matter said.
The seller of pricey jewellery, watches, leather goods and accessories had exited India in April 2011 after ending a seven-year tieup with a Mumbai-based firm to run monobrand stores. This time round, the brand intends to have more control over its operations. "Bulgari is making an attempt to come on its own and is in the process of setting up a store," one of the persons said. "This time, they will go in for a silent partner due to regulatory requirements." Bulgari did not respond to emailed queries sent by ET seeking information on the talks.
However, persons in the know said the company plans to open a single-brand store in south Delhi in a couple of months. Bulgari was bought by the world's No 1 luxury group, LVMH, in 2011. Franck Dardenne, general manager of LVMH Watch & Jewellery India, said, "Bulgari is considering options, but I will be in a better position to answer in the next six months."
India's luxury market is expected to reach $14.73 billion by 2015 from an estimated $8.21 billion this year, compelling several international luxury brands to have a relook at the market. India allows 100% foreign direct investment ( FDI) in single-brand retail and 51% in multi-brand retail, but the opening up of this sector comes with the rider that 30% of sourcing should be done locally. The sourcing clause, however, is a deterrent for most international luxury brands, which are currently operating in the country through joint ventures, franchisees or silent partners.
Rome-headquartered Bulgari was founded in 1884 by silversmith Sotirio Bulgari as a single jewellery shop. The company, famous for its colored stone jewellery and watches that have a unique serial number, also operates luxury hotels and resorts. It had a turnover of over Euro 1 billion in 2010. Latest sales figures were not available, as LVMH does not share brand-specific revenue details. In 2004, Bulgari had joined hands with Dia Group's sister concern, Lifestyle Tradelinks India, to open two standalone stores in Mumbai and Delhi.
The stores, however, closed down after seven years. "The sales were good, but some problem cropped up between the brand owners and the franchise partner," said another person who did not wish to be named. Like Bulgari, high-end Swiss watch brand Jaeger-LeCoutre (JLC) is also considering reopening a standalone store in India by early next year. JLC had opened a mono-brand store in DLF Emporio in 2007 in partnership with Kapoor Watch Company, but closed it the following year.
"The time was not right then," said Dinesh Aswani, India manager for JLC. The company's watches are sold at 11 points of sale in India, priced between Rs 3.5 lakh and Rs 13.5 crore. "We are looking to open a standalone boutique in partnership with one of our existing retailers," he said without giving any details. Arvind Singal of Technopak, a retail consultancy firm, said,
"Most brands have tasted success in China and see a similar potential in India in the coming years, and this is why they want to control the brand's distribution, sales and marketing, so that they are better placed when the market really opens up."