Cartier owner Richemont seeks to open single-brand shops in India

Luxury goods group Richemont, which owns jewellery brands Cartier and Van Cleef & Arpels, has applied to open single-brand shops in India, joining other global retailers who entered the market since the country relaxed its foreign direct investment rules.

The country's luxury retail sector represents a tiny fraction of global luxury brands' sales, but has a fast-growing class of wealthy people.

The sector has been hampered by high tariffs, complex legislation and lack of retail space, prompting brands to open shop mainly in luxury hotels.

Richemont has applied to enter in the 'single brand' retail space, where stores sell only one brand, for an initial investment of $5 million, a Reuters report cited a senior government official saying on Thursday.

The official, who directly deals with foreign investment proposals at the ministry of commerce and industry, declined to be named as he was not authorised to speak to the media. He also declined to give any indication when a decision might be made on the proposal.

In the single brand sector, India allows 100-per cent foreign direct investment on condition that a third of materials used in products is sourced locally.

"We see India as a market with long-term growth potential for Richemont's Maisons (brands)," a spokesman for Richemont said in an email sent to Reuters on Thursday. "There is a growing market of affluent young consumers and the property market is also changing."

Richemont said it planned to meet India's 30-per cent sourcing requirement through the purchase of polished diamonds for the group as a whole using its India-based entity.

India's first standalone luxury retail store opened in 2011 in Mumbai, a 3,000 square-foot store for France's Hermes that has an art gallery on the second floor and a glass elevator to travel the two floors.