By  on June 1, 2012

NEW DELHI — Bringing international fashion labels under one roof is a challenge in the Indian retail landscape, but DLF Brands hopes it is on the right path with its new multibrand Ave.neu stores. But the way Timmy Sarna, managing director, DLF Brands, explains their new and first multibrand retail venture, called Ave.neu, which opened on Thursday in New Delhi, it appears as easy as matching an outfit with the right shoes and accessories.

And DLF Brands has some big money behind it — parent company DLF Ltd. is the biggest real-estate player in India, as well as the owner of 10 malls across the country. DLF Ltd. is expected to invest up to $540 million over the next five years to develop shopping malls with 4 million square feet of retail space.

The new move by DLF Brands, which has been bringing global brands into India, has quelled rumors about the lack of sustainability of its business model. The company recently exited joint ventures with Giorgio Armani and Salvatore Ferragamo.

Sarna claimed the company exited the Armani deal because it finds the luxury sector too difficult to scale up. “Anything to do with youth has a growing market, and we want to focus on the boom and be focused on anything more scalable, fashion and lifestyle,” Sarna said. “We believe in the business. We have been growing in excess of 20 percent like to like.”

He observed that DLF Brands is looking at capitalizing on a more midmarket segment.

DLF Brands already has partnerships with global brands such as DKNY, Alcott, Boggi, Sunglass Hut, and Claire’s Accessories and operates 120 stand-alone stores. Most of these brands also will be sold in Ave.neu, which will operate three different formats: the multibrand larger stores, smaller accessories-only units and smaller fashion boutiques.

“It is not possible to expand luxury brands at a pace we would like to do. Luxury brands are too niche and have a very small consumer base,” said Dipak Agarwal, chief executive of operations and strategy at DLF Brands.

The new 15,000-square-foot multibrand store appears to be a step toward a new strategy. For a start, it is located in West New Delhi, which is a different catchment area from the more prestigious malls in Saket and Vasant Kunj, “We’re looking at making a stronger positioning in these areas while offering customers a choice of international brands under one roof,” said Sarna.

The plan is to launch five to six stores each year, starting with smaller cities such as Surat, Mumbai, Pune, Chandigarh and Lucknow. Ave.neu will also house other global brands which do not partner with DLF Brands, he observed. He added that the expectation was to open 50 Ave.neu stores in the next 18 months.

Ave.neu faces stiff competition, though, including from successful department-store chains like Shoppers Shop and Lifestyle, the variety of formats operated by Reliance and stores such as Pantaloon and Central.

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