Hermès opens doors in India with luxury saris

For a western company to sell saris in India might seem like selling ice to the Inuit. But on Friday Hermès,the luxury brand,started doing just that.

Written by The Financial Times | Published:October 10, 2011 3:09 am

Amy Kazmin

For a western company to sell saris in India might seem like selling ice to the Inuit. But on Friday Hermès,the luxury brand,started doing just that.

Based on popular Hermès scarves — many of which were inspired by Indian design — the French-made limited edition saris mark the first time a western company has created the garment for India’s nascent luxury market.

Patrick Thomas,chief executive of Hermès International,called the saris — which will sell for $6,100 to $8,200 — a “wink” to Indian consumers. “There have been a lot of connections between Hermès and India,” Thomas told the FT. “Designing these saris for Indian customers is a way to pay light homage to India,and say,‘Hermès admires India and has a lot to learn from India’.”

It is perhaps not surprising that the first offer of a sari from a western company comes from Hermès,which last year launched a bespoke Chinese brand aimed at winning more Chinese customers while resuscitating that country’s craft tradition. Yet with western fashion businesses still struggling to sell women’s apparel in India,many experts believe the offer of saris by a major global design house is long overdue.

“You have to create products that Indian consumers like,” said Neelesh Hundekari,a luxury expert at AT Kearney,a consultancy. “Why would you not do saris in India? Companies should have done it much earlier.”

Today,India’s domestic sales of high-end jewellery,handbags,shoes,watches and clothing are estimated at $2.2bn,just a fraction of sales in China. Nonetheless,its annual sales growth of 20 per cent — and the number of Indians flocking to their boutiques abroad — has enticed many top western luxury brands into setting up shop in the country.

Companies such as LVMH,Giorgio Armani,Ermenegildo Zegna,Gucci and Jimmy Choo have all established themselves in India,although for the most part their stores remain confined to New Delhi and Mumbai.

The Indian market presents a number of challenges. High import tariffs make foreign luxury goods 30 to 40 per cent more expensive than elsewhere,often prompting Indians to buy abroad rather than at home.

India’s 51 per cent cap on foreign direct investment on “single brand” retail also forces western groups to tie up with Indian partners,though the government recently indicated it may soon relax this rule and allow 100 per cent foreign ownership.

The tight real estate market also makes it tough for luxury retailers to find visible,high-street locations,pushing most brands into either five-star hotels or upmarket shopping malls,catering only to a very narrow clientele.

Hermès is one of the first to break out from these confines,having refurbished an elegant,colonial-era building for the opening of its new Mumbai store this year.

“We want to communicate and be in touch with Indian society,not in a ghetto where you have all the luxury brands together,” said Thomas. “We want to talk to the category of Indian customers who do not travel all the time.”

Products also remain a challenge. So far,jewellery,watches,accessories such as shoes and bags and men’s formal wear are the most successful. But western brands have had a difficult time selling their slinky and revealing women’s apparel because the sari remains de rigueur for formal occasions,especially at the weddings that drive much of India’s luxury demand. The market for highly embellished saris and bridal wear is dominated by domestic luxury couturiers,such as Tarun Tahiliani,J J Vallaya and Rohit Bal.

“It’s really smart of Hermès to be doing a sari — I’m astonished that this hasn’t been addressed before,” said Caroline Young,chief executive of the fashion consultancy Creative Link India.

Men’s-wear labels such as Canali,Ermenegildo Zegna and Italy’s Etro have found success in offering Indian-influenced jackets with the type of closed-neck,rounded collars made famous by Jawaharlal Nehru.

Hundekari predicts that saris — along with other traditional Indian women’s garments — can also be a hit. “Many of the brands think that India is a market that will evolve to western norms but it will not,” he said. “It will evolve in its own way.”

© 2011 The Financial Times Limited

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