Second coming for Italy's Bulgari luxury brand

Company applies for India entry

Italian luxury goods company Bulgari is learnt to have made a formal proposal to the Centre for setting up single-brand stores in India. This would be the group’s second entry into the Indian market. In April 2011, it had exited India, after terminating a seven-year partnership with Lifestyle Tradelinks India, a sister concern of Mumbai-based Dia Group. At that time, it had a couple of stores in Delhi and Mumbai.

The Euro 1-billion Bulgari is owned by French firm LVMH. Traditionally, Bulgari is known for jewellery. But now, it has diversified into a range of products, including watches, accessories, fragrances and even hotels.

While multi-brand retail chains cannot have more than 51 per cent foreign direct investment (FDI), there’s no cap on single-brand chains. Even so, many single-brand foreign retailers operate in India in partnership with Indian companies or as franchisees. Bulgari, too, was likely to have an Indian partner, though it wanted to have full control over the business, sources said.

The condition in single-brand retail that at least 30 per cent of the products must be mandatorily sourced from India, preferably from small and medium units, is believed to be a hurdle for foreign chains wanting to operate on their own. This clause kicks in after the FDI limit exceeds 51 per cent. However, IKEA, the world’s biggest furniture group, is entering India as a 100 per cent-owned venture; it has proposed an investment of Rs 10,500 crore. Fashion chain H&M which would invest Rs 750 crore in the Indian market.

Of Bulgari’s 295 stores worldwide, 174 are owned by the group. Asia accounts for most of the company’s revenue (45.5 per cent), followed by Europe (34.8 per cent) and the US (13 per cent), according to the company’s website.