BENGALURU: Luxury and ultra-luxury brands in the home decor and appliance space feel their sales are likely to be affected to some extent by the high-end real estate market, which continues to be weak and shows little signs of revival.
Mumbai, Bengaluru and New Delhi have always been the preferred cities for the foreign brands to set shop due to the higher disposable income of its people compared to other parts of India, but companies have adopted a wait and watch approach while expanding into these ones as well.
French luxury furniture brand Roche Bobois opened its second brick and mortar store in Bengaluru recently after its first one in Mumbai. The company, which counts Italian furniture company Natuzzi among its competitors, caters to people who own apartments worth more than Rs 3 crore. It has about 250 stores in 50 countries.
“There is definitely an effect as new home sales in the luxury space mean more business. The slowdown, if it continues, is going to adversely affect our sales,” Samvit Tara, Roche Bobois India managing director, told TOI.
Instead of launching a full sized store in Delhi, which may go up to about 30,000 square feet, the company will showcase its products in the Taj Group of hotels for the time being. “We have delayed our launch in Delhi as sales of all big brands in the luxury space have been hit badly there,” Tara explained.
The luxury segment has been cause of worry for all property developers across the country as subdued real estate sentiment and weak economy pulled down demand for the segment. The NCR, which is mainly an investor market, is estimated to be the worst hit from the downturn leading to huge inventory and stretched balance sheet for the companies. Till some time ago, properties priced at over Rs 1 crore sold like hot cakes in Bengaluru. But now people are trading down, making do with smaller apartments at lower costs.
Dutch kitchen company Keller’s Kitchen, which entered in to India through its first store in Bengaluru, plans to expand into Thiruvananthapuram apart from Mumbai and Delhi this year. The company’s product prices ranges from Rs 4 lakh to Rs 40 lakh for customised solutions. Rahul Parmar managing director of Keller’s Kitchen India, agreed the slowdown in luxury home sales may have an impact on its sales but added that the company’s wide price range would help them weather the storm.
Similarly, US premium kitchen appliance company Sub-Zero Wolf would rather expand into smaller southern cities after moving in Bengaluru. “The snowball effect of slow high end home sales will have an impact on us,” according to Anand Gunjur, managing partner of Reddy Infrastructure Systems & Engineering (RISE), which is the main dealer. But none of the companies quantified the drop.
Credits Times of India