The slowdown in the economy and archaic rules on real estate may have affected the mainstream retail industry, but there is a flurry of activity on the high-end retail segment, as existing players actively explore business structures to tie up with global high-end retail majors.
Mandates with consulting firms, including those from the Big Four, show that players such as Reliance Retail, Aditya Birla Retail, Shoppers Stop and others are keen on evaluating business structures with high-end firms such as Marks & Spencer or Armani or a Moschino to tap demand from the growing number of HNIs (high-networth individuals).
According to sources, growth in demand for luxury items is pitched against a slowdown in mainstream retail as high inflation pushes back purchase decisions. The main driver is an increase in the number of individuals in India, who can afford to fly abroad to splurge on high-end accessories ranging from Rs 80,000 and above.
Business structures being considered include a franchisee model to start with, which could later be converted into a joint venture if the two partners consider it worthwhile.
