Luxury brands go online to avoid high rentals

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Brands like Giorgio Armani, Jimmy Choo, Canali, Paul Smith, Bottega Veneta, Etro, Crabtree and Salvatore Ferragamo are either launching their own websites or tying up with luxury e-commerce platforms to reach out to consumers instead of investing in high rentals and facing other infrastructure issues.

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For example, the average rent at DLF Emporio is around Rs 1,000 per sq. ft, excluding sales tax, common area maintenance and electricity charges. And due to high rentals and operating costs, brands are taking at least three-and-a-half to five years to break even.

Luxury brand, Hugo Boss recently downsized its 4,000 sq. ft. store at Emporio to a third. Bottega Veneta’s leather goods store in Emporio Mall in Delhi is now reduced to half its size. Versace in India is also squeezing everything in a single store at Emporio unlike its large store formats abroad. And high rental forced brands like Alfred Dunhill and Esprit to shut down many stores after continued losses.

On the other hand, ecommerce portals are offering global brands like Armani, FCUK, Christian Audigier, Fitch, Ed Hardy, Cerruti, CK, Benetton, American Eagle, Hollister, Cadini, Tie Rack of London along with leading Indian designers like Ritu Kumar, Rina Dhaka and Ashish Soni among others. Apart from apparel, accessories labels like Roberto Cavalli, Moschino, Esprit, Guess, Kenzo as well high- end children’s merchandise from Disney and Okaidi are now available just at a click away. And these portals are doing good business compared to brick-and-mortar outlets of these brands.

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