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BW Businessworld

‘Luxury Is Growing’

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Hackett London, a british menswear brand present in over 50 countries, recently opened its first standalone store in India in Delhi in a joint venture with Madura Fashion & Lifestyle (MFL). The move follows the company’s plans to expand to south-east Asia. Hackett was initially present in India through the super-luxury retail store, The Collective, which belongs to the MFL stable. In a chat with BW’s Smita Tripathi, Hackett’s managing director Vicente Castellano talks about the Indian luxury market and why it is not too late for the brand to enter, among other things. Excerpts from the interview:

Q:Several luxury brands are here already. Do you think you are late to enter India?
A:There are still several brands that have not come here. We did our research over the past three years, and felt the market was right for us to have standalone stores. The cake is just getting bigger; so even if we are late, we will still get a huge slice of it.

Q:The world sees another economic gloom now. Can the luxury market sustain?
A:Since the crisis started, luxury brands have been doing better. Brands such as Hermes and Louis Vuitton have been doing even better than before. Yes, the crisis has hit some mature markets such as US, Europe and even Japan, but so many new markets have emerged — Russia, China, Singapore Malaysia and so on. At least until now, the opportunity in these markets is bigger than the downturn that has happened in the US or Europe.

Q:Is that why Hackett is looking at expanding to emerging markets?
A:Emerging markets are a good part of our development in the future. Over the next three years, nearly 25 per cent of our turnover will come from them. Customers here are starting to enjoy luxury brands. So, there is a huge opportunity. When they decide to start buying luxury wear and we are present in the market, then they will first experiment with us and become loyal. Men are more loyal to brands. If they feel comfortable with a brand, are happy with the fit, they tend to stick to it.

We started by developing the European market as we are a UK brand and this is our biggest market. So, Europe was the next logical step. But once we had established ourselves, we realised it was time to start looking overseas. We have been testing the Indian market for the past three years through The Collective (an MFL chain). We have received a positive response. So, a year ago, we decided that the time was right for us to set up retail stores in India in a joint venture with MFL. We decided to use their expertise, local knowledge and know-how to expand the market.

Q:How does such a tie-up help you? What do the two parties bring to the table?
A:We bring everything related to the brand, our store knowledge, craftsmanship and experience. And they bring everything related to the Indian market. They know the cities, markets, rules, governments and how to treat the staff in India. If it is local, they have the expertise for it. We could have come on our own and tried to get that expertise in a number of years, but that did not make sense.

It made a lot of sense to tie up with MFL, as it introduced the brand three years ago with The Collective. They were quite aligned with our strategy, which is not to overcrowd India. We will have three stores in the first year and evolve from there. Our stores are going to be in Delhi, Bangalore and Chandigarh, to start with. We plan to have 10 stores in India over the next three years.

Q:Are your clothes tailored to suit the tastes of each market?
A:As you grow in a market, you learn and develop new things and, probably, get influenced by local tastes. But in every market, you have sufficient customers who look for our kind of classic, understated, subtle sophistication. Of course, there are customers who prefer a in-your-face brand with big logos, but there is a big market of those who look for quality, craftsmanship and history of the brand. Definitely, in India, we have those customers. In the past three years, we have done good sales in tailoring and formal wear.

Q:What about the kids’ collection? Will you introduce the collection here?
A:It has not been introduced in the Delhi store primarily due to the (limited) size of the outlet. Also, it being our first store, we want to focus on our strength — menswear — and then the kids’ collection can be introduced later. But we want to establish the brand first.

Q:What are your plans for developing the brand here? In Europe, you have a tie-up with Aston Martin for sportswear...
A:We will use all our global tie-ups to showcase and develop the brand. There will be an advertising campaign as well. We do not have plans for tying up with another brand here. We need to establish our brand first. Otherwise, it will only confuse people. Also, our tie-ups are generally with something very British, as that goes with the image of our brand. But we do plan to sponsor local events. For instance, the travel kit of the Force India team has been provided by us.

Q:Do you have an online showroom? Will you open one for India as well?
A:We launched our UK website recently. It is only delivering in the UK right now. We will also look at having websites in local markets. But it is not easy. We need to decide whether we should go with an English platform or translations. E-commerce is booming. Even if it takes time, it is a market you have to be in.

(This story was published in Businessworld Issue Dated 22-10-2012)