Business Standard, Mumbai, February 12, 2010
Aigner, the German luxury brand, and Genesis Luxury, the up-market retailing arm of Genesis Colors, have ended their tie-up in the country, as their plans did not go as expected, said a person close to the development.
Genesis and Aigner had agreed in 2007 to import and distribute merchandise. The partnership ended last month. Genesis Luxury, which ran the Aigner stores in Mumbai and Delhi (three in all), has shut these, through mutual agreement.
Aigner, part of Etienne Aigner AG, hadn’t tied up with any other company, sources said. The company did not respond to emails from Business Standard.
When asked, Sanjay Kapoor, managing director, Genesis Luxury, said: “Yes, we have ended the marketing tie-up with Aigner in India, after successfully running the brand for three years.”
Kapoor denied any difference of opinion between the partners. “In fact, we have had a very cordial relationship with the brand. It is a pure business-related decision. And, we will be looking at bringing in other newer brands to India in the next few months,” he said.
Aigner entered India in 2004 on a tie-up with Sports Station India Pvt Ltd (SSIPL) and set up the first store in Delhi. SSIPL had plans to open three more stores in the country, but the partnership didn’t continue beyond 2007. Aigner then signed the deal with Genesis.
Aigner is not the only luxury brand in recent times to end its relationship with an Indian company. The Murjani Group, promoted by Vijay Murjani, parted ways with luxury brands such as Gucci, Bottega Veneta and Jimmy Choo as part of its plans to shift its focus to premium retailing from luxury retailing. Bottega Veneta and Jimmy Choo are now with Genesis.
In fact, half-a-dozen international brands have pulled out of their partnerships or from India in recent memory. Raymond, the apparel maker and retailer, ended its partnership with Italy’s GAS. Kishore Biyani’s Future Group ended a tie-up with Italian brands Replay and Etam.
Britain’s Marks and Spencer ended its franchisee agreement with NRI businessman V P Sharma’s Planet Retail and tied up with Mukesh Ambani’s Reliance Retail, as it could not expand the way it wanted.
"Typically, break-ups happen when there is any shortfall in the performance expected from both sides. From the international brand side, either enough sales were not happening or Indian firms found returns on investment too low,” says Devangshu Dutta, chief executive of Third Eyesight, a management consultancy.
However, Genesis has planned to open more stores under its luxury portfolio, including those of Jimmy Choo, Bottega Veneta and Just Cavali — in all, 10 to 12 stores each for these international luxury brands over the next three to five years. Also, 100 Tie Rack Landon stores and 50 Satya Paul accessory stores will be opened over the same period, to achieve a target of becoming a Rs 1,000-crore company in five years.
Recently, Genesis signed a joint venture with Burberry, the British luxury goods retailer, where it took a 49 per cent stake. The company plans to open stores in metropolitan cities.