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LVMH co Sephora in JV talks with Rel Brands

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Reliance Brands, a privately held firm of Reliance Industries chairman Mukesh Ambani, has been in talks to launch Louis Vuitton Moet Hennessy (LVMH) owned beauty retailer Sephora, and a high-end women’s clothing brand BCBG, as the company looks to add more international brands to the country’s evolving fashion and personal grooming business.

This subsidiary of Reliance Retail has existing joint ventures and long-term distribution pacts with global brands like Diesel, Zegna, Paul & Shark, Timberland and Steve Madden. Industry sources briefed on the developments said Reliance Brands, spearheaded by fashion industry veteran Darshan Mehta, has been scouting for high-street locations for launching Sephora and BCBG (abbreviated for Bon Chic Bon Genre in French). The two brands fit into Reliance Brands strategy of bringing in international brands catering exclusively to women’s wear, personal grooming and accessories business.

Reliance Brands CEO Darshan Mehta declined to comment on market speculation . LVMH could not be reached for immediate comments . The nature of the proposed alliance with Sephora and BCBG, whether it is JV or long-term licensing of the brand, could not be ascertained . The deal with Sephora was still in discussions and not sealed, sources added.

Saloni Nangia, vice president , retail and consumer products at consultancy firm Technopak Advisors, said the premium personal care segment is growing at a fast clip compared to the growth in the industry. The entire beauty and personal grooming segment is estimated to be $4.5 billion and is growing at 7-8 %. On the other hand, the premium category, which is 5% of the total market ($250million), is growing at 18% annually. Higher disposable incomes and consumers upgrading to premium products are driving growth in this category.

Paris-based luxury goods group LVMH has been working on Sephora’s India strategy for a while, and came close to striking a deal with DLF. Sephora, with over 700 stores worldwide, sells beauty and hair care products under its own name as well as some 100 other well-known brands such as Yves Saint Laurent, By Terry and Issey Miyake. Some of the brands Sephora sells, for instance, Body Shop and Lancome are already present in India. “Sephora’s entry will herald the first premium multi-brand retail channel for beauty products in India. Till now, it was the grey market and the mom and pop stores that catered to the high end multi-brand cosmetics retail,” said Amit Bagaria , chairman, Asipac, a retail and mall management consultancy.

French designer Max Azria-owned BCBG clothing has been embraced by celebrities and trend-setters globally, and has found admirers in Bollywood stars like Kareena Kapoor and Preity Zinta. BCBG bridges the super-premium and luxury segments competing with rivals such as Roberto Cavalli, Prada, Burberry and Donna Karen. Reliance Brands, which also intends to invest behind indigenous fashion houses, operates 25 stores in seven cities between all its portfolio brands and reported a loss of Rs 6.23 crore in FY11.

Source : Times of India

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