Giorgio Armani has parted ways with its Indian joint venture partner DLF Brands. The Italian fashion house has now decided to ink a franchisee deal with Genesis Luxury to expand its retail footprint in India. Genesis also has a joint venture with Burberry in India and represents brands such as Canali, Jimmy Choo and Bottega Veneta in the country.
Armani has joined the list of many other global luxury brands such as Versace, Corneliani and Guess, who are planning or have already parted ways with their Indian partners. Versace and Corneliani have decided to split with their Delhi-based partner Blues Clothing Company and would scout for a new partner to start afresh. Guess too is expected to look for a new partner after its long-time partner Planet Retail decided to restructure its business. The American clothing maker will now tie up with Major Brands, the marketer of Mango and Aldo in India.
According to DLF Brands Chief Executive Officer Dipak Agarwal, the break-up with Armani is in line with its strategy of withdrawing from luxury. And Armani wanted to move to a franchise mode which DLF could not do.
Once the deal is signed-it is expected this week-Genesis will take over the management of the three Armani stores in India. It plans to open 20 more Armani stores over the next four-five years and take Emporio Armani, Giorgio Armani and Armani Jeans brands to cities such as Chennai, Bangalore and Kolkata. Apart from expanding its retail footprint in the country, Armani is also trying to grow its wholesale business, whereby it sells its garments, eyewear, accessories, cosmetics and perfumes through departmental stores and other multi-brand outlets. Armani recently tied up with designer Suneet Varma to bring in its kidswear brand Armani Junior into the country.
The retail arm of real estate developer DLF and Giorgio Armani set up a joint venture in 2008 to roll out retail stores of the luxury brand. Armani held 51 per cent equity in the venture. The venture has so far opened only three outlets-two Emporio Armani stores in Delhi and Mumbai and one Giorgio Armani store in New Delhi.
According to consumer goods and retail consultancy Third Eyesight, about one-third of the more than 150 international fashion brands launched in India over the past seven years have either changed partners or exited the market and around 26 brands have changed partners, while 23-26 exited the market with at least half of those later returning either as a wholly-owned subsidiary or with a new partner. In 2009, for instance, luxury brand Gucci parted ways with its partner Murjanis to move to a joint venture with Ashok Wadhwa`s Luxury Goods Retail. Murjanis had earlier ended their relationship with Jimmy Choo and Bottega Veneta, both of whom are now with Genesis Luxury.