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Tag: DLF Brands

  • A CII-AT Kearney study recently observed that End of season sales have played a good role in getting more and more Indians to get their first experience of luxury

    Global luxe brands woo first-timers with sales

    By Vijaya Rathore

     

    International luxury brands such as Chanel, Christian Dior and Burberry have started discount sales at their outlets in Delhi, Mumbai and other cities to woo first-time buyers as well as to clear inventory.

     

    “Sale is a good way to bring down the entry point for the first-time buyers,” said Roasie Ahluwalia, general manager (marketing), at Genesis Luxury that operates brands such as Giorgio Armani, Paul Smith, Bottega Veneta, Canali, Burberry and Jimmy Choo in India.

     

    She said this strategy is particularly effective in a nascent luxury market like India. “Many of those who buy these luxury products at a 40 per cent lower price end up becoming regulars,” she said.

     

    A CII-AT Kearney study recently observed: “End of season sales have played a good role in getting more and more Indians to get their first experience of luxury.”

     

    Even Chanel and Christian Dior, among the best-known luxury brands in the world, have put lower price tags on select products. Chanel offers 30 per cent sale on its ready-to-wear section twice a year while Dior offers discounts on items such as clutches and shoes.

     

    Marielou Phillips, spokesperson for Chanel in India, however, said the luxury brand uses the sales to reward its loyal customers rather than attract first time buyers. “Neither do we put up big signage at stores nor we give advertisements in newspapers. We simply put aside a few products and inform our regular buyers about the discounts,” she said.

     

    Industry experts say tempering sale of high-end goods in a slowing economy and limited circulation of products due to small number of stores in the country are forcing luxury brands to put the big labels on sale.

     

    “Brands go on sale in India because they have to get rid of last season’s products. In case of luxury brands, the seasonality factor is much higher. Most of their products are seasonal in nature,” said Dipak Agarwal, chief executive officer at DLF Brands, which co-operates Salvatore Ferragamo stores.

     

    Most international luxury brands do not operate more than five stores in India, making it necessary for them to flush out the old inventory. “A brand’s ability to leverage inventory across stores goes down when it has a limited number of stores in a country,” said Mr Agarwal.

     

    Dinaz Madhukar, president at DLF Emporio, a luxury shopping mall in South Delhi, says the number of shoppers increase 30 per cent during any sale. “Even brands that do not go on sale benefit from the increased footfall,” she added.

     

    An average two lakh people visit the DLF Emporio each month. The mall also does a lot of events like corporate tie-ups to invite potential customers for sale previews.

     

    However, there are a few brands like Hermes, Louis Vuitton, Cartier and Tom Ford that do not offer discounts. “We do not go on sale,” said a representative at a Louis Vuitton store.

     

    Experts say most of these brands follow their global policy of not bringing prices down.

     

    An executive associated with Tom Ford brand in India said: “Many brands also want to convey a message that each of their products is worth what a consumer is paying for. They do not want a customer who has paid more for the item to feel cheated when he finds that someone else has paid 30 per cent less.”

     

    Fair enough, but such brands might be losing out on a certain class of luxury customers in India who buy luxury only on sales.

     

    Abhay Gupta, founder promoter and CEO of Luxury Connect, which offers executive educational programmes on luxury business, said there are two kinds of luxury shoppers in the country. “There are people who are brand loyal and spend irrespective of the price tags and there are those who wait for six months for the sales to begin,” he said.

     

    Source: The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • Retailers say early signs are encouraging than the same season last year, although these are early days and total actual sales numbers cannot be predicted yet

    Good news! End-season sales lure shoppers back to malls & high streets

    By Rasul Bailay, Sarah Jacob & Sagar Malviya

     

    After a lull of more than two months, Indian shoppers are thronging malls and high streets once again, lured by the end-of-season discount sales, and bringing some relief to nervous retailers.

     

    Retailers say early signs are encouraging than the same season last year, although these are early days and total actual sales numbers cannot be predicted yet. “So far it has shaped better than last year,” said Kailash Bhatia, chief executive of Pantaloons department chain.

     

    Dipak Agarwal, chief executive of DLF Brands, that markets products of brands including Mothercare, Mango, DKNY, Alcott among others, said the average sales at the brands under the company’s portfolio doubled in the first week of July compared to the same period in June when the discount sales had not started.

     

    Retailers have been nervous about whether shoppers would open their wallets amid a slew of negative news on the economic front such as increasing fears of below-normal monsoon rains, slowest GDP growth rate in nine years, US President Barack Obama expressing concerns about India’s investment climate, increasing food prices and prevailing high interest rates.

     

    After lukewarm sales in May, many brands including Arrow, French Connection and Puma advanced the start of their end-of-season sales to the last week of June instead of the traditional July.

     

    Now, with a whole host of other retailers joining in with discounts, consumers are back in the street in large numbers, causing traffic jams in main shopping areas this weekend.

     

    At the Noida Sector 18 market near Delhi, for example, hundreds of shoppers were driving up and down this weekend looking for a parking space.

     

    “It seemed I was shopping in the US. The sale looked genuine. I bought two Lee and two Wrangler T-shirts, two pairs of Albatross leather shoes and five pairs of sandals for my six-year old from Lifestyle and I paid just Rs7,500,” beamed a shopper holding a clutch of shopping bags at The Great India Place, the largest mall in Noida.

     

    DLF Brands’ Mr Agarwal says many retailers were apprehensive of the slowdown and through early sales they were trying to avoid an inventory build-up. And he expects consumer spending to remain high in the coming months.

     

    Jitendranath Patri, head of marketing at Central, a department chain owned by Future Group, shared Mr Agarwal’s optimism. “There is a long festival season starting from August and consumers will have something to celebrate each month during Ramzan and Diwali,” he said.

     

    Others such as Arvind Lifestyle Brands CEO J Suresh and Indus League Clothing CEO Rachna Aggarwal, however, warn that the positive response to discount sales need not necessarily mean that the good run will continue post August when most of the sales are over. “End-of-season sales never gives the true picture,” said Mr Suresh. “It is more important to see if sales will stabilize after the discount sales period or if a slowdown will continue,” he added.

     

    Mr Bhatia of Pantaloons said more and more customers now wait to shop during the sales seasons. Almost 30 per cent of Pantaloons’ revenues are generated during the discount seasons for the last four-five years.

     

    While the footfall has grown this discount season, Mr Patri of Central said the average ticket size of a Central customer too has increased to 2,500 this from 2,300 last year, making it a double whammy.

     

    A spokesperson for German sportswear brand Adidas AG said the company was expecting double-digit growth at its like-to-like stores during the sales season and it has achieved that target.

     

    Lavina Rodrigues, marketing manager at Metro Shoes Ltd, which sells multi-brand footwear through 175 outlets across the country, said the company is yet to gauge the sales records for the two-day flat 50 per cent sale this year, but indications are it is same as July last year. She says Metro is generally able to sell almost 60 per cent of the old stocks during the sales periods. In some cities like Rajkot, where consumers are more receptive of the discount season, the company would get rid of almost 85 per cent of the old stuff.

     

    Source: The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved