Mumbai: The air of confidence that the attendant at the Worli outlet of Swarovski wears sums up the mood at the Austrian company, leaders in precision-cut luxury crystal ware. A delicate piece of Swarovski crystal replete with intricate work would cost nothing less than Rs 1 lakh. Despite the steep tag, the attendant says it has been doing brisk business in the last six months. "On an average I land up having about 75 to 100 customers a month. This is higher during the festive and wedding seasons when gifting goes up. There is no slowdown that I see," he says candidly.
Swarovski is not the only luxury brand to buck the slowdown that has hit consumer spending in other segments of the Rs 1.8 lakh crore FMCG industry. At a Gucci store located at the upscale Palladium Mall in Mumbai, the sales executive says its star products - leather handbags with bamboo handles and clutches in anaconda skin - have been flying off the shelf. The average ticket size of these products is more than Rs 1.3 lakh. "I have walk-ins everyday, and more often than not, we manage converting quite a few of them into sales," he says, choosing not to reveal the number of bags he sells per month.
A similar refrain is heard at a nearby Jimmy Choo outlet. The average ticket size of a pair of Jimmy Choo shoes is Rs 35,000-40,000. Star products and limited-edition collections easily cost a few lakhs, but the sales executive says customers have hardly deserted her store. "While the rupee has depreciated against the dollar and even the pound in the last three months, customers still prefer buying their products from here rather than London or Dubai because the ticket size is steeper there," she says.
Since May, the rupee is down over 20 per cent to the dollar. Last week, it came close to touching Rs 70-a-dollar, but inched up following some timely intervention by the Reserve Bank of India. The British pound has already breached the Rs 100-mark. But the rupee rout as well as the sagging health of the economy matters little to the ultra-luxe shopper. These high networth individuals have an annual income of Rs 4 crore and above.
A recent Kotak-Crisil study says that the number of ultra-high networth households grew 24 per cent in 2012-13 to 100,900 from 81,000 the year before, with the number expected to triple in five years. This happened even as India's economic growth hit a 10-year low of 5 per cent in 2012-13.
Luxury retail has a field day
Executives at Genesis Luxury, which retails luxury brands such as Armani, Canali, Jimmy Choo, Bottega Veneta in India, says topline growth has been nearly 35 per cent year-on-year. Same-store-sales growth of its exclusive brand outlets were 10-15 per cent, says Sanjay Kapoor, managing director, Genesis Luxury, refering to growth in outlets in business for more than a year.
"Slowdown as a result of the depreciation of the rupee has marginally affected the luxury and premium goods business. Short-term changes in the economic scenario usually do not affect luxury spending as the consumer in this segment has a high disposable income," Kapoor says.
Darshan Mehta, chief executive of Reliance Brands, which retails high-end apparel brands such as Ermenegildo Zegna and Paul & Shark, where the median price-point is Rs 15,000, as well as brands such as Diesel and Thomas Pink in the affordable luxury segment, says the company has not seen the impact of the consumer slowdown yet.
While Mehta declined to put a number to the growth he was seeing in his business, industry sources say the company's same-store-sales growth was over 30 per cent in the last few quarters for most of its exclusive brand outlets.
Uber-luxe lifestyle breezes through
The real estate and automobile markets too have seen the luxe-effect. Super-car Lamborghini, which comes for a hefty Rs 3.5 crore and more, continues to sell nearly 20 units a year, with company executives claiming they have not felt the slowdown. The BMW-owned Rolls Royce, which comes for Rs 2 crore a unit is on its way to achieving the 100-car sales target this calendar year. Aston Martin, another ultra-luxe coveted brand has been comfortably cruising with sales of over 30 units a year.
Herfried Hasenoehrl, general manager, emerging markets - Asia, Rolls-Royce Motor Cars says, "While there is a tendency to hold back purchases in a slowdown, we have not experienced a demand slump for our products. Our products are aspirational. We continue to remain on course to achieving our sales targets in India."
It is no secret that realty developers have been paying greater attention to luxury homes as buyers defer purchases in the lower- and mid-end of the market. "Luxury is a unique market. Even in current market conditions, there is good demand for these homes," says Kruti Jain, director, Kumar Urban Development, a Mumbai-Pune developer. He recently launched a luxury project in Worli named Kumar Coutore priced at Rs 14-16 crore. The project has just 40 apartments. "The response is good. We are looking at selling 20 apartments now and the remaining later," Jain said.
Gaurav Gupta, director at Mumbai-based developer Omkar Realtors said the company has sold properties of 225,000 sq-ft since pre-launch in February in its super-premium project '1973' in Worli, against the annual target of 250,000 sq-ft. The prices are between Rs 15-100 crore for apartments ranging from 2,500-18,000 sq-ft.
Says R Karthik, chief marketing officer, Lodha Group, developers of high-end projects such as The Park, endorsed by actor Aishwarya Rai in Mumbai: "In the luxury residential segment, the response from our customers is extremely encouraging and reinforces our strategy. The interest in luxury housing continues from HNIs in Mumbai and NRIs who are keenly looking for differentiated real estate in the city."
No comments:
Post a Comment