Reliance in talks with LVMH to bring Sephora

Tuesday, 28 June 2011

Louis Vuitton is in talks with Reliance Brands, a privately held firm of Reliance Industries, to launch LVMH owned beauty retailer Sephora, and a high-end women’s clothing brand BCBG. For Reliance this is a part of its strategy to add more international brands to the country’s evolving fashion and personal grooming business. It already has joint ventures and long-term distribution pacts with global brands like Diesel, Zegna, Paul & Shark, Timberland and Steve Madden. Industry sources say, spearheaded by fashion industry veteran Darshan Mehta, Reliance has been scouting for high-street locations for launching Sephora and BCBG (abbreviated for Bon Chic Bon Genre in French).

The buzz is that LVMH has been working on Sephora’s India strategy for a while, and came close to striking a deal with DLF. Sephora, has over 700 stores worldwide and sells beauty and hair care products under its own name as well as some 100 other well-known brands such as YSL, By Terry and Issey Miyake. Some of the brands Sephora sells, for instance, Body Shop and Lancome are already present in India. French designer Max Azria-owned BCBG clothing has been embraced by celebrities and trendsetters globally, and has found admirers in Bollywood stars like Kareena Kapoor and Preity Zinta. BCBG bridges the super-premium and luxury segments competing with rivals such as Roberto Cavalli, Prada, Burberry and Donna Karen. Reliance Brands, operates 25 stores in seven cities between all its portfolio brands and reported a loss of Rs 6.23 crores in FY11.

Meanwhile on another front Louis Vuitton intends to sell its Pondicherry plant to Chennai’s Leather Crafts India. Part of the euro 20 billion Moet Hennessy Louis Vuitton Group, the French company’s Indian back office is known as Les Ateliers De Pondicherry (LADP). It was set up jointly by Louis Vuitton and the Pondicherry-based leather fashion brand HiDesign. Louis Vuitton had a 5 per cent stake in HiDesign. Meanwhile news of the sale created unrest in the four-year-old Pondicherry unit. The prospect of a change of management sparked labor unrest with the 200-odd Indian employees on LADP's rolls going on strike. The workers there are apparently demanding that Louis Vuitton regularize their services before going through with the change of ownership.

Louis Vuitton's decision to sell the unit comes as a blow not only to Pondicherry 's reputation but also to India's image as a competitive cost destination. Besides, Pondicherry was its first manufacturing plant in Asia, the French luxury brand has decided to sell its Indian unit to a Chennai-based firm.