At a time when the luxury market is witnessing a slowdown the world over, Priya Sachdev, COO of TSG International Marketing Pvt Ltd, a luxury retailer, has drawn up plans to expand in India. She believes it will give her the first mover's advantage in the ready-to-wear luxury market and capture greater market share. She spoke to Suvi Dogra regarding her plans for the year.
Do you see any slowdown in terms of luxury shoppers in the country?
There is a significant drop as far as our aspirational consumers are concerned. Our aspirational customers are at their best during sale time. But since the economic crisis has hit the world there is a definite slowdown in cash flow and consumers are refraining from spending on luxury. So, we are looking at opening factory outlets to make luxury accessible to a wider number of consumers.
The plan initially was to grow via single brand stores. Have high real estate rentals altered your plans?
Single brand stores will happen when we have the right real estate projects in hand. We are very sure that this year corrections will happen and the superficial layer of rentals will be gone.
Business will be more practical and in 2009-10 we will aim to find right projects, be a part of them and add the right numbers. As of now we just want to focus on our seven stores, five of which opened last year.
So will the focus now shift to your multibrand luxury boutique format, Kitsch?
We definitely are focusing on Kitsch which houses the world's leading luxury and fashion brands. This format works better because not only does it give the consumer a wider choice but also gives us an understanding of what brands sell more, whether it has the potential of being extended to a single brand boutique.
Also it gives us an opportunity to educate the consumers about the brand and what it stands for. If a consumer doesn’t know about a brand it doesn’t translate into sales. Through the multibrand stores we hope to have a strong database to see what brands have strength to be on their own and in what cities.
Given the slowdown, what sort of expansion are you looking at?
Real estate rentals will be more realistic this year and we are working on growing with the right projects. We hope to open at least 25 stores by 2012. Given the recession, we believe that each store will generate sales up to Rs 1-1.5 crore this year.
What about marketing the brands?
We will dedicate around 10 per cent of our sales to marketing and advertising this year. We will continue to invest more in celebrity dressing, luxury magazines and other events that can help enhance the brand visibility and build the right imagery.
How many brands do you have as of now and what are the other brands you wish to bring to India?
We are the exclusive retail and distribution partner for brands such as Moschino, Jean Paul Gaultier, Alberta Ferretti, Lanvin, Stella McCartney, Alexander McQueen, Diane Von Furstenberg, Marc Jacobs and Marc by Marc Jacobs. We are also in talks with brands such as Yves Saint Laurent, which are still futuristic for the country but are bound to do well.
But isn’t the Indian luxury market still out of sync with the global markets given the high duty structure?
Our partnership with these global brands is such that we have been able to work out price points that are on a par with the international market. Our consumers are also global travellers and if they get the brands at a premium here they will feel cheated. Hence, our effort has been to retail at prices which are on a par at least with Dubai and European markets.
What do you think is the biggest challenge in the Indian luxury environment?
With our multi-brand stores we have shown to the world that Indian luxury is not just for accessories but also for ready-to-wear luxury. Unfortunately, the luxury market in India has been violated and the Indian luxury consumer is spoilt with so many out-of-season discounts and sales which are not characteristic of luxury worldwide.
We need to make sure the consumer understands that luxury is not only about the product but also the services and experience that come along with it. Our customer loyalty programme, for example, exposes our customer to the fashion industry by way of inviting them for special fashion parties, collection viewing etc. This education is important to meet the challenge.