Rothschild investing in Indian luxe retail

Llyod Grove of Portfolio.com recently did an interview with Lynn Forester de Rothschild, CEO of EL Rothschild, the holding company she owns with her third husband to manage investments in the Economist and various enterprises in India. Those include FieldFresh, a startup that will grow and export Indian fruits and vegetables for markets in Europe and Asia, and a soon-to-be-announced retail venture aimed at the exploding Indian middle class. Here's an excerpt from the interview:

L.G.: What else will you do with E.L. Rothschild?

L.R.: We are also looking very seriously at the retail space in India, both in terms of front-end retail as well as Indian brands that we believe have opportunities. I think that'll be the next area where you'll see some announcements from us.

L.G.: When? Can we make some news?

L.R.: Not by the time you go to print. [Laughs.]

L.G.: Give me a hint. I know you're on the Estée Lauder board, and I know you're very interested in luxury goods in India. Would it have something to do with that?

L.R.: Well, we're looking at those. You know India has luxury in its DNA. All you've got to do is look at the maharajas and look at the Taj Mahal. There's no Hermès or Louis Vuitton that's going to tell India anything about luxury. Luxury is a very interesting, undeveloped piece of India. I don't think it will be a big piece for a long time, because of the income level, but I think it's interesting. We do think luxury when we think retail, but we also think more mainstream, aspirational brands and opportunities

L.G.: And the country obviously has an exploding middle class, so that could be a good market internally-or are you thinking for export as well?

L.R.: I am thinking more about the domestic markets, more about the growth of the domestic market, because 10 million people are entering the middle class every year in India. You know, there are more billionaires in India than anyplace else. Let me put it this way: Every day in India, the entire nation of Great Britain is on the train, one way or another. So the numbers are pretty colossal. Seventy million people in India can afford anything they want. It's a small percent, but that's a reasonable number.

L.G.: That's a pretty healthy market.

L.R.: Two hundred fifty million are middle-class, so you might not go for the Chanel glasses, but you sure could go for an Estée Lauder lipstick or a Starbucks coffee.

Pic courtesy: Portfolio.com

LV factory in India

French luxury label Louis Vuitton is looking to construct its first factory outside Europe and the US, near the Indian city of Pondicherry.

A person familiar with the company's plans said the factory would attach soles to the uppers of Louis Vuitton shoes, which sell for hundreds of pounds a pair. However, he added that the shoes would still bear the prestigious 'Made in Italy' label because the vast majority of work on them would continue to be carried out in Italy.

Source: MSNBC

Vogue India launch set for Sept 21

In last Friday's Mint, Condé Nast India managing director Alex Kuruvilla speaks about why Vogue has taken so long to come to India. He says:

Condé Nast has been looking at the Indian market for a while now. Typically, when Vogue enters a market, it signals that the market has, in a sense, arrived—at least from a luxury and fashion point of view. A good case in point is that Condé Nast and Vogue chose to enter China only in 2005. We’re not the kind of people who rush into new markets and look for first-move advantage. In fact, we like to refer to our competitor’s move as first-move disadvantage. Because they moved here when regulations did not allow foreign direct investment in the publishing space, all of them are licensed brands. At best, they may be minority stake holders. So, if you don’t own it, you won’t invest in it. It’s a vicious cycle.

The second problem is that not all the big luxury players are here yet. Even the ones that are here are sitting on very small businesses. So people who came in 10 years ago, like our competitors, were forced to mainstream their brands and business. When you couple with that low investment, it means that editorial content and production values are pretty low. To top that, you have to build a business so you go after advertising that is more mass than you would in any other market. So the product ends up being a very generic, ‘me too’ product.

In a sense our timing has been right. It’s a bit of a cliché—about strong economic growth, and reports on the number of millionaires being added on each year—(but) there is a germ of truth in that. That is driving growth of the affluent set, which, in turn, will drive the consumption of luxury brands and that is where we are poised.

For the entire article, go here.

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In June 2007, FashionWeekDaily reported that Gemma Ward will be Vogue India’s first cover girl. In 2005, Ward appeared on the inaugural cover of Vogue China (pictured above). The title, expected to hit newsstands on September 21, will mark the 17th edition of Vogue worldwide.

Parisian rendezvous

Designers Manish Arora, Anamika Khanna and Rajesh Pratap Singh are getting ready to set the Paris Fashion Week ablaze this year, reports Hindustan Times. While Arora and Khanna will showcase their designs at the event starting September 30, Singh will roll out his collection at next year's event.

Nothing unusual about this really, other than the fact that for the first time Indian designers will show their collections under their own labels instead of foreign ones or retail chains.

"It's a great moment of glory. For the first time, our designers will showcase their collections under their own labels. India will be there in its original form," Fashion Design Council of India (FDCI) Rathi Vinay Jha said at a press conference here Wednesday.

FDCI, which organises the highly acclaimed Wills Lifestyle India Fashion Week (WIFW), has facilitated the Indian designers' participation at the Paris Fashion Week. "I have exhibited at the London Fashion Week but my dream was to showcase at the Paris Fashion Week. Now it has materialised and the credit for it goes to FDCI," Manish said.

Methinks it's a sign of the times. India inspires, India sells. Now, it's doing it on its own terms!

Pic courtesy: Manish Arora, Elle 2006 (UK)

India shining

The Economic Times is going 'rah-rah' over India's surge in the number of wealthy individuals. And why not? After all, India (36 billionaires) has already taken over Japan (24 billionaires) as home to the most number of billionaires in Asia. Pretty soon, we'll take over the title of 'home to the maximum number of luxury consumers' as well!

According to the 2007 World Wealth Report by Capgemini and Merrill Lynch, the world has 9.5 million high net worth individuals. Significantly, India has a good share of these rich and famous. The report says that the number of HNWIs in India has increased by 20.5% from 83,000 in 2005 to 100,000 in 2006 — a good piece of statistics to inspire many Indians.

In fact, the performance of the BRIC nations (Brazil, Russia, India and China) has been commendable so far as global wealth creation is concerned. According to the Wealth Report, two of these four countries made their way into the list of the 10 fastest-growing HNWI populations in 2006. China’s HNWI population grew by 7.8% in 2006 against India’s 20.5%.

Take that!