Gucci and Fendi are planning exclusive branded outlets in India and are now in talks with major retailers like Pantaloon, Lifestyle, Shoppers’ Stop, the Runwal Group and Big Bazaar for the same. Gucci, at present, has a presence here but only in a multi-branded outlet format, making its products just one among the many displayed in malls. Exclusive branded outlets in malls would mean that these brands will get exclusive space to the tune of 2,500 to 5,000 sq ft. Fendi, on the other hand, is making an entry into the booming Indian retail segment for the first time.
Shubhranshu Pani, president – retail services, TrammellCrow Megharaj said, “Murjhani brothers, the partners of The Gucci Group would be setting up Gucci outlets in India. Apart from eyeing malls for setting up outlets, Gucci group and Fendi are also in talks with top hoteliers of the country to set up Gucci branded exclusive outlets within premium hotels in high street locations.” It was in January 2006 that Gucci had identified the Murjani brothers as their partners to enter the Indian market, and then followed with an agreement with them.
Pranay Vakil, chairman, Knight Frank India said, “The demand for international premium luxury brands such as Gucci has taken off well in markets such as Mumbai, Bangalore and Delhi. But it will take at least six months to a year to decide how these brands take off nationally as more malls are likely to come up in Tier II cities, as well. When branded outlets are developed, consumers look for variety value.”
According to industry experts, a branded company today willingly pays 12% of the gross income by way of rent. In areas such as Linking Road, Mumbai, branded companies pay Rs 500 to Rs 600 per sq ft as rent as they are able to justify the value realisation that exceeds the rent payable at 12% of the gross income. The only exception to this are the international branded companies who have outlets just to promote the brand.