LVMH, Gucci to expand in India with new outlets in Reliance's luxury mall
Reuters · 09/15 08:18
LVMH, Gucci to expand in India with outlets in Reliance's luxury mall

Reliance plans to open top-end luxury mall in Mumbai

LVMH, Kering brands have set to open stores, agreements show

Reliance to charge rental plus revenue share of 4-12%

Store openings to mark retail expansion for brands in India

By Dhwani Pandya and Aditya Kalra

- Gucci, Cartier and Louis Vuitton are among brands to sign leases for stores in Indian tycoon Mukesh Ambani's Mumbai mall, as luxury firms and Reliance Industries seek to profit from strong economic growth and a rapid rise in the of millionaires.

The Jio World Plaza, which an industry source said is likely to open this year, is located inside Reliance's $1 billion business and cultural hub in Mumbai's business district.

Reliance any has yet to disclose details about the tenants, but lease documents provided by real estate analytics firm CRE Matrix showed that Burberry Group BRBY.L as well as several brands owned by LVMH LVMH.PA, Kering PRTP.PA and Richemont CFR.S have agreed to rent shops in the mall, and also share between 4% and 12% of their monthly revenue with Reliance.

The brands include jewellers Cartier and Bulgari, fashion houses Louis Vuitton, Dior and Gucci, watch brand IWC Schaffhausen and luxury luggage maker Rimowa, which will open its first outlet in India.

Reliance, Burberry, LVMH, Kering and Richemont did respond to a request for comment.

"Luxury brands have always struggled for quality retail spaces in India and many were forced to open their first outlets in luxury hotels," said Anuj Kejriwal, CEO of India's Anarock Retail. "These brands are looking for meaningful presence."

At almost 700 square metres (7,500 square feet), Louis Vuitton's Jio World Plaza store will be the most spacious of its four outlets in India. Cartier's store will be its second in the country and for Dior, it will be the third.

To ensure the mall retains its luxury appeal, some lease agreements like that of Dior include a clause that entitles it to a 25% rent reduction if at least four of 10 luxury brands including Gucci, Cartier, Bulgari and Tiffany don't open their own outlets in the mall within six months.

India's 1.4 billion population, the world's biggest, has a per capita income of just $2,300, but the country is also home to more than 800,000 dollar millionaires who are splashing out on everything from luxury homes to expensive SUVs.

Real estate consultants Knight Frank estimate India will have 1.4 million millionaires by 2026, 77% more than in 2021, as the economy continues to strengthen.

The growth in India, where Euromonitor estimates the personal luxury market to expand almost 12% a year in 2022-2026 to $5 billion, contrasts with the slowing economy in China, whose appetite for designer goods has driven sales growth in luxury firms for years.

China's personal luxury market will grow an average 11.5% in the four years to 2026 to $107 billion, Euromonitor data shows.

(Reporting by Dhwani Pandya and Aditya Kalra; editing by Miral Fahmy)