Saks Fifth Avenue eyes India
North America’s oldest commercial firm is partnering with India’s Aditya Birla Group, whose origins date back to 1857, to launch Saks Fifth Avenue outlets in India.
Saks owner Hudson’s Bay will introduce the New York experience in New Delhi’s Aerocity, near the Indira Gandhi International Airport in Delhi, reports The Economic Times.
It quotes insiders as saying Saks has appointed Aditya Birla Fashion and Retail as the India franchisee, with two outlets planned, the other at Bharti Realty’s Worldmark 2 project in Mumbai.
CBRE is acting as a real-estate consultant for the Indian venture, and the first Saks store could open late this year or early next year, say the sources. All companies concerned have refused to comment.
Saks’ flagship outlet on Fifth Avenue in Manhattan in New York City is believed to generate about $700 million annually. In New Delhi, the store will compete with DLF’s luxury mall Emporio, home to single-brand luxury stores for Giorgio Armani, Gucci, Hermes and Louis Vuitton.
Bharti Realty’s mixed Worldmark development has more than 1.4 million sqft (130,000 sqm) of commercial and retail space (500,000 sqft is reserved for high-end retail). It will also house Kishore Biyani-owned Central Mall, covering 100,000 sqft.
Aditya Birla Fashion owns brands including Allen Solly, Louis Philippe and Van Heusen, and Pantaloons department stores.
A team from Saks Fifth Avenue has visited India twice in the past three months, reports Deal Street Asia.
According to the Top of the Pyramid survey by Kotak Wealth Management, published in July, 59 per cent of wealthy Indians buy luxury apparel and accessories locally as luxury brands are more widely available in India.
There were 146,600 Indians with a combined net worth of Rs135 trillion (US$1.9 billion) as at the end of March last year, according to Kotak. This is set to increase to Rs319 trillion by March 2021.
India’s luxury goods market has yet to reach its potential, says Boston Consulting Group senior partner/director Abheek Singhi. It is centred in the National Capital Region, Mumbai and Bengaluru.
India allows 51 per cent foreign direct investment (FDI) in non-food multi-brand retail in particular states. Foreign retailers also need to meet other conditions pertaining to the manufacturing and sourcing of material.
In the proposed partnership with Aditya Birla Fashion, Saks Fifth Avenue would be retailing goods across segments such as cosmetics, apparel and accessories from luxury retailers, including Burberry and Gucci. It is also expected to introduce brands like Ralph Lauren that do not have a presence in India.
Globally, Saks Fifth Avenue has about 60 stores. Its parent, Hudson’s Bay Co, which also owns the Lord & Taylor chain in the US, has made a takeover approach for struggling retailer Macy’s, according to Reuters.
Last year Aditya Birla announced a partnership with UK-based luxury brand Simon Carter and US fashion retailer Forever 21.