With big corporates like Reliance and Aditya Birla investing in few top fashion brands, the designers aim to capture a bigger market but will also have to learn to work within the terms set by the corporates
The global luxury market is predominantly run by business giants like LVMH, Kering, and Richemont, who make multi-dollar profits each year by strategically aligning with fashion brands and retailing them across the world.
Interestingly, corporate funding for fashion brands has picked up in India too. Some of the biggest designers and couturiers are now working handin-hand with renowned business companies to take their brands to a global scale.
In 2021, Aditya Birla Fashion and Retail Limited (ABFRL) announced strategic partnerships with designer Tarun Tahiliani and Sabyasachi by investing in their brands. Reliance Brands Limited (RBL) announced equity investments in Indian couture brands like Manish Malhotra and Raghavendra Rathore. In the coming months, designers Rahul Mishra, Anamika Khanna, and Ritu Kumar formed business alliances with RBL for investments and stake in their brands. The latest addition to this list is Reliance Retail Ventures Limited (RRVL), that’s recently invested in designer brand Abraham & Thakore for a majority stake.
For a long time, Indian fashion designers worked independently and invested out of their own pockets to sustain their brands. With corporate backing, will the brands become more financially viable?
Senior designer David Abraham answers, “This is an indication of maturing of the Indian designer fashion industry. New alliances and partnerships will provide opportunities for growth in India’s rapidly evolving retail scenario. These new business associations will be beneficial to designers who are now also in a position to access the professional expertise and skill sets of large corporates. These developments have the potential to take Indian fashion to the next level.”
Indian designer Rahul Mishra, who showcases regularly at the Indian and Paris Haute Couture weeks, feels this is a natural
evolution for any industry, not just fashion. He says, “Indian fashion industry is quite recent as compared globally, but the fact that giant conglomerates are now investing in this business shows the potential of this segment. The business of fashion is thriving and is expected to grow exponentially and the Indian fashion industry is expected to play a huge role. For example, when conglomerates started acquiring brands in European nations such as France or Italy, fashion houses like LV, Gucci, and Dior saw massive growth.”
IN THE LATEST 60:40 JV PARTNERSHIP, MISHRA PLANS TO CO-BUILD A NEW BRAND WITH RBL, WHERE CUSTOMERS CAN BUY FROM MULTIPLE ACCESS POINTS AND EXPERIENCE THE PHILOSOPHY OF HIS BRAND AT AN AFFORDABLE PRICE POINT.
“NEW ALLIANCES AND PARTNERSHIPS WILL PROVIDE OPPORTUNITIES FOR GROWTH IN INDIA’S RETAIL SCENARIO. IT’S BENEFICIAL TO DESIGNERS WHO ARE NOW ALSO IN A POSITION TO ACCESS THE PROFESSIONAL EXPERTISE AND SKILL SETS OF LARGE CORPORATES. THESE DEVELOPMENTS HAVE THE POTENTIAL TO TAKE INDIAN FASHION TO THE NEXT LEVEL.”
DAVID ABRAHAM, Designer
“I SEE THE FASHION INDUSTRY PROFESSIONALIZING AND GROWING AT A MUCH FASTER PACE WITH THE BACKING OF THE LARGE CORPORATES. THAT SAID, THE JURY IS STILL OUT ON THIS TREND MAKING LIFE EASIER FOR DESIGNERS — AGGRESSIVE EXPANSION TARGETS FOR A LABEL COULD TAKE A TOLL ON CREATIVE DESIGNERS, WHO HAVE TRADITIONALLY CATERED TO A RELATIVELY SMALLER SEGMENT OF THE MARKET.”
In the latest 60:40 JV partnership, Mishra plans to co-build a new brand with RBL, where customers can buy from multiple access points and experience the philosophy of his brand at an affordable price point. He informs, “We want to create an entirely new entity where shoppers can experience Rahul Mishra RTW (Ready-to-Wear) collections, fragrances, accessories, and a diverse range of products that can be retailed globally.
The best thing about patterning with RBL is they understand the international luxury market and they are the best retailers globally. They have already partnered with brands like Balenciaga, Bottega Veneta, Burberry, Canali, Ermenegildo Zegna and Michael Kors, etc, and they know how to take care of luxury brands with expertise.”
CREATIVE CHALLENGES:
Undoubtedly, the flush of funding for prominent labels is a much-needed and heartening trend for the Indian fashion industry. Moreover, the interest is from very large strategic investors who have the breadth and depth to take these labels to a different level altogether, opines senior designer Namrata Joshipura, who has done multi- ple runway shows and grand finales at Delhi and Mumbai* fashion weeks.
Taking it in a positive stride, she predicts, “I see the fashion industry professionalizing and growing at a much faster pace with the backing of the large corporates. That said, the jury is still out on this trend making life easier for designers — aggressive expansion targets for a label could take a toll on creative designers, who have traditionally catered to a relatively smaller segment of the market.”
Although, selling a stake to a large company is just the first step of a long and arduous journey. The cultural difference between the designer and the new corporate is a big challenge, feels Joshipura. “Designers are used to working in a very different organisational culture. Decision-making and creative independence are extremely personal to a designer and fiercely protected; and having to engage with another entity, a business and financial conglomerate, is fraught with high risks. Also, it will be interesting to see how a stand-alone label will now live with being one of many under a larger corporate umbrella. Fast and aggressive growth can lead to brand dilution, an existential challenge for designers who have thrived on exclusivity to enhance their brand equity,” she adds.
INDIAN BRANDS, GLOBAL EXPERIENTIAL:
However, designer Rahul Mishra is excited to create mindful fashion and says he is extremely happy with the recent developments and feels it could be a win-win for Indian fashion and corporates. Pointing out an interesting fact, he adds, “Earlier, corporate investors were just looking at numbers and the turnover. Today, things have changed and they are looking for brands that create value not just quick turnovers. My couture business with my wife Divya, the Rahul Mishra brand will stay small as there’s a beauty in exclusivity. It will continue to have organic scalability since it’s not easy to mass produce hand-made couture ensembles that take 1,000 odd hours for craftsmen and people get to wear them for special occasions. Unlike art, the fashion is not a one man’s business, it is is a collective — it is a creative business which requires deeper pockets and a more organised way of working.”
“We want to create an entirely new entity where shoppers can experience Rahul Mishra RTW (Ready-to-Wear) collections, fragrances, accessories, and a diverse range of products that can be retailed globally. The best thing about patterning with RBL is they understand the international luxury market and they are the best retailers globally.”
— RAHUL MISHRA, Designer
It will be interesting to see how a stand-alone label will now live with being one of many under a larger corporate umbrella