NEW DELHI — Eraldo Poletto, Furla’s chief executive officer, has not given up on India.
“We did the application for a joint venture with Genesis Luxury [the franchise partner in India],” Poletto said, speaking about the application for a 51-49 joint venture partnership in March 2013, which had an eye on India’s fast-growing $500 billion retail market. “It took so long and developed some legal issues. So now we keep going as a franchisee concept.”
Furla was one of the first brands to apply for the joint venture after foreign direct investment in single-brand retail was allowed by the Indian government. Genesis also partners with a slew of other global brands including Paul Smith, Burberry, Jimmy Choo and Giorgio Armani.
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Furla’s 563-square-foot flagship is in Select Citywalk mall in Saket, which is one of the top-performing retail centers in the country. The Italian accessories brand plans to open 12 to 15 stores in India over the next four years, Poletto said. These will add to the three existing stores, including units in Mumbai and Kolkata.
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“The consumption is there, in India,” he said, “the desire is there; the expectation is there — but really, there is no place to open shops. That’s what is kind of limiting everybody. The true limitation in India is real estate and infrastructure.”
But Poletto intends to get beyond the limitation of geography, to look at what he said was the most important — the consumer. “We see the Indian consumer as being very much present in London, Singapore, Dubai, even New York,” he said, adding that the focus on global markets has driven major growth — Japan is 23 percent of the business, with the rest of Asia making up 14 percent.
Furla has stores in 100 countries. Of these, 344 are monobrand stores, of which 164 are directly managed and which generate 59 percent of revenues; 180 are franchised and there are 1,100 multibrand outlets, according to company figures.
The U.S. is a big focus now as well, with the store on Fifth Avenue in New York due to open in June 2015.
Furla also has plans to open 100 stores in China in the next four years.
Poletto spoke about the fact that there was consumer interest for more stores in India, but the infrastructure did not support it. “The difference between India and China is that in China, in terms of infrastructure, they probably overdid it. They’re going to face the problem where they have too many malls compared to their real needs. You go to China, very often there’s a mall that’s completely empty. Here is exactly the opposite. One hour from now, the mall will be overflowing,” he observed.
“I would say we bet on the Asian consumer,” he said, then added, “but I don’t like to look at the business geographically — because I think it doesn’t make any sense. For example, even in Milan, 60 percent of our customers are not Italians. In that sense, Milan is not in Italy. In that store, there are seven different nationalities in our team, and nine languages are spoken. So is it an Italian store? It’s not.”
Poletto believes that the global consumer is getting “smarter and smarter” with communication, and that the Internet and social media are keys to that.
“India is very technologically advanced compared to Europe. It is going to make the product accessible for people who don’t have a store nearby or for whom it is going to take seven hours to get to one,” he remarked.
Speaking about the pricing in India, which is about 20 percent higher than in the U.K., Poletto noted that the taxes in India make it a challenge. “We cannot absorb everything,” Poletto said.
Looking at the markets of the future, he said that “it is the Chinese, Indian, Malaysian, Indonesian and Russian consumers who are our top consumers around the world. Much of what is growing in Europe is coming from Asia; Europe without Asia would be a completely different continent.”
It is obvious that the growth of Furla in India is going to take time. Poletto is prepared to wait. “If I had to bet on the future, it is five years. You cannot wait for the ‘proper’ moment. You have to come and learn,” he said.