Saks Fifth Avenue India entry to be kept on hold for now
Luxury goods retailer Saks Fifth Avenue, which was expected to enter the Indian luxury market by early next year, has reportedly called off its planned store in the Indian capital of Delhi.
It was reported earlier this year that the American luxury store chain owned by Hudson’s Bay Company (HBC) would open this year in Aerocity, near the Indira Gandhi International Airport in Delhi. However, with the year coming to an end it seems the plan has been shelved, reports the Times of India, citing anonymous sources.
Saks, which sells luxury brands such as Jimmy Choo, Giorgio Armani, Tod’s and Christian Louboutin among others, was expected to foray into India after agreeing partnership terms with Aditya Birla Fashion Retail Ltd (ABFRL).
The spokesperson of HBC and ABFRL declined to comment on the issue stating it was ‘rumours and market speculations'.
Even though the reasons for the back out are not clear, the poor performances of HBC and ABFRL in the last quarter may have factored. Hudson’s Bay Co reported a net loss of $192 million in the quarter ended October 2017 amid lower retail sales, while its India partner Aditya Birla Fashion Retail Ltd reported a standalone net loss of Rs 10 crore (approx $1.6 million) for the quarter ended September 2017.
Despite the luxury market in India - which is currently estimated to be around $3.4 billion, according to Euromonitor - growing at a rapid pace, international brands and companies are adopting a cautious approach before entering new markets due to slowdown in US and European markets.
Indian companies are also partnering with international brands which give better returns and higher margins. So it is no surprise that Indian firms are staying away from high end luxury brands and focusing on fast fashion brands for the masses at the moment.
Aditya Birla Fashion Retail Ltd sells brands including Van Heusen, Louis Phillipe, Peter England, Allen Solly and international brands like Simon Carter and US-based fashion retailer Forever21. The company will launch two international brands Ted Baker and American Eagle in this financial year.
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