Even as the government declared its clear policy on FDI in single-brand, the luxury groupLVMH has decided to shut down its biggest watch brand Tag Heuer’s office in India after 15 years in operation locally. As per reports, sales at LVMH Watch & JewelleryIndia, have dipped and the company sees its prospects further dimmed by the country’s tax structure. Here is another luxury brand which did not find the reality of the luxury market in India, measure up to the hyped perceptions. Tag Heuer had high profile brand ambassadors like Shah Rukh Khan, Priyanka Chopra and Ranbir Kapoor.
Amit Chaloo, General Manager for LVMH Watch, has categorically said that the Company’s decision to change distribution channel has nothing to do with governments plan to clamp down on black money. He said it was purely based on dynamic re-deployment to meet ambitious business objectives, for which it will ‘leverage an existing partnership’ with a local agent which also sells other watch brands.The Tag Heuer office in Delhi will stay open for some time to ensure an orderly transition to the agent and to guarantee proper after sales service. He further added, “Tag Heuer is exploring the best options for its employees. We will try our best to have internal mobility roles within brands in India for our employees”.
Another Swiss luxury watch brand Corum is entering the distribution model with Tag Heuer and Dior. Sunil Grover, Corum’s regional director for South Asia said, “The market has not been growing for the past two years as there has been a slowdown.” On being asked about whether it is the clamp down on black money, which has impacted watch sales, Grover is reported to have said, “People are a little wary whether to buy or not to buy even though the retailers are not asking for PAN cards, but people are generally cautious. They don’t want to be seen.” Indian retailers have been importing Corum watches and the Swiss company will now appoint a local distributor, Grover said, adding that the New Delhi liaison office will conduct functions, including marketing and finances. Only sales will be through the distribution model, he said.
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