Fortune India|December 2019
RELIANCE BRANDS LTD (RBL) , THE W HOLLY-OW NED ARM OF Mukesh Ambani-led Reliance Industries Ltd that sells affordable luxury and premium brands in India, will celebrate a decade of setting up its first retail outlet in March 2020. It started with a Diesel store, which was delayed by a year in the aftermath of the global financial crisis. The company, which has tie-ups with almost 50 brands, including Paul&Shark, Ermenegildo Zegna, Diesel, Bottega Veneta, and Pottery Barn, is also expected to close the year with ₹3,000 crore in revenue. That will make it one of the top purveyors of branded goods competing with the likes of Arvind Brands and Aditya Birla Retail, which play in a much wider market addressing the middle class.
At a time when the outlook for consumer demand is tepid and luxury car sales have plummeted, RBL continues to open new stores and tie up with more brands to expand its portfolio horizontally to offer more categories. This year, it inked a deal with exclusive jewelry maker Tiffany & Co. after a 30-month courtship and made its first global acquisition with the buyout of toy retailer Hamleys. Darshan Mehta, 55, president and chief executive of Reliance Brands, talks to Fortune India about the recent changes in taxation, the lack of premium real estate, and the incidence of digital in the luxury business. Edited excerpts:
The government had sought to penalize luxury goods with goods and services tax (GST), charging such goods the highest slab. How has that worked for your business?
When GST happened three years back, it was a big tipping point for our industry. Since we own the biggest chunk of the mid- to high-end of the fashion market, it was a big moment for us. The rationalization of tax structures brought two things to our business: It brought a line of sight to profitability and set the critical mass—both are important components of any business.
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