Luxury brands are moving from five-star hotels to department stores and malls
This means that the best five-star hotels in the country are no longer the most popular address for these brands. The alternatives are what’s called Main Street – this includes shopping complexes in upscale neighborhoods – or the three malls across the country that are home to such brands. Not the best solution given Indian building standards and high property prices, but apparently preferable to low footfall in five star hotel stores.
Genesis Colors Pvt. Ltd., parent of Luxury genesis fashion, India’s largest luxury fashion house retailing Canali and brands such as Bottega Veneta, Burberry and Jimmy Choo plan to move all of their brands from hotels to shopping malls for luxury brands.
India has three of these malls—DLF Emporio in Delhi, Palladium in Bombay and City of UB in Bangalore. Of these, only the first is exclusive to these brands, the other two offer a more egalitarian mix. While mall fatigue has hit major cities across the country due to the downturn and boring similarity, there’s even less appetite for the high-end variety. No new luxury mall has launched in the past three years, so most brands will have to make do with what’s available, at least for now.
Canali, an Italian luxury menswear brand, was among the first to take the plunge two years ago when it went from Palladium to Palladium. JW Marriott in Juhu, Bombay. Last year, Tod’s, another Italian luxury goods brand, has closed its The Galleria store in Trident Hotels at Nariman Point, Bombay. He only has one store in the country, at DLF Emporio.
“For our brand portfolio, we have reserved spaces in shopping centers that cater specifically to luxury brands and once all of these locations are operational, most of our business will be hosted there instead of five star hotels. , where attendance remains a challenge, “mentioned Sanjay Kapoor, Managing Director, Genesis Colors.
Darshan Mehta, Managing Director, Trust marks, a subsidiary of Reliance Industries Ltd which sells the luxury Italian menswear brand Zegna in India, said it is not opening new stores in five-star hotels because such places are not working. What was once Zegna’s 3,000 square foot flagship store in the iconic Taj Mahal Palace hotel in Mumbai has been reduced to 900 square feet.
A Zegna store of over 1,000 square feet has opened at the Palladium.
The key statistic is the number of visitors the stores receive.
“In terms of footfall, if a branded store gets 10 to 12 steps a day in a mall, the same would get two or three in a hotel and sales per square foot would also be in that proportion,” he said. stated Kapoor of Genesis.
“We receive clients from all kinds of places. It could be people from all over India and even tourists from South Africa visiting the city. The number of appointments is at least 10 times higher (compared to five star hotels) and customers who visit the mall are curious to discover the brand, know the prices and see the collection, ”said a store manager at Jimmy’s. Choo’s Palladium store. He declined to be named because he is not authorized to speak to the media.
Certainly real estate is a big challenge as these brands need to be hosted in a location that is convenient for them. But that can change.
“We are thinking of creating more luxury environments like Palladium in cities like Chennai and Chandigarh,” said Rajendra kalkar, senior manager of the center, High Street Phoenix, which operates Palladium. The new centers will take a year or two to see the light of day, he said.
A few developers have announced luxury malls, but these will take at least two years to be ready, said Shubhranshu Pani, Managing Director, Retail Services, Jones Lang LaSalle Meghraj, real estate consultancy.
The developers are not that enthusiastic due to the limited number of potential tenants. Most luxury brands plan to expand their presence to between two and six stores over the next 10 years and not much beyond.
The overall Indian luxury goods market was worth $ 2.18 billion in 2011, just over 10% of the Chinese luxury market of $ 17.94 billion, according to an October Euromonitor report. .
This is why luxury brand marketers are looking elsewhere to open their stores. In 2011, the French luxury brand Hermes ignored Mumbai’s hotels and malls to open on the main street of a 150-year-old building at Horniman Circle in Mumbai. Louis Vuitton has meanwhile opened its fifth store in Bergamo, a so-called shopping center on Khader Nawaz Khan Road in Chennai.
Change occurs because alternatives, although limited in nature, emerge.
“There weren’t any suitable spaces other than five-star hotels to house these brands (previously), so a lot of our business was outside of five-star hotels,” said Kapoor of Genesis.
Certainly, the shopping areas of five-star hotels will always have signs.
For example, the Taj Krishna hotel located in the posh Banjara Hills locality in Hyderabad three years ago created a luxury shopping area. It is home to brands such as Zegna, Cartier, Burberry and Omega.
Emails sent to Taj Group hotels have not received a response. Trident declined to comment.
Never miss a story! Stay connected and informed with Mint. Download our app now !!