Ultra-luxury Diwali gifting loses sheen this year

In India’s challenging economic environment the gifting of ultra-luxury items is also taking a beating.
On a weekday, just weeks before Diwali, Chanakya luxury mall in New Delhi’s diplomatic enclave illustrates the prevailing sentiment. Hardly any customer is seen carrying shopping bags that are otherwise quite common before the biggest festival.

The story wasn’t different on Saturday afternoon at DLF Emporio, eight kilometre south of Chanakya. The swish mall home to top-end labels like Cartier, Salvatore Ferragamo, Louis Vuitton among others, had some hundreds ofcustomers in the mall having lunch at the restaurant in the atrium and other restaurants but most of the stores were virtually empty. “People are mostly here for eating and not for shopping,” said a manager of a store on condition of anonymity.

Manager at another luxury store said business is down up to 30% this Diwali compared to the same period last year.

Dinaz Madhukar, executive vice president at DLF’s luxury retail that runs both Chanakya and Emporio said the slowdown has “not reflected on the ground” in the malls. However, stores have a different story to tell.

“Sentiments are down, it has a chain reaction,” said another senior executive of an outlet. ET visited more than half-a-dozen outlets in the malls and everyone said things are bad this year.

Over the years, luxury brands used to do brisk business by selling gifting items like wallets, belts, stoles, scarves, cufflinks, pens, watches, perfumes, cardholders and bags among other items.

Some uber luxury companies like Jimmy Choo and Emporio Armani have launched limited edition products that coincided with the festive season here and said those products have been received well. For example, Jimmy Choo’s New Delhi store sold about a dozen gold-textured Calie clutches of both small and bigger ones priced between Rs 80,000 and Rs 130,000 are sold out in a Delhi store. Similarly, Emporio Armani launched an Indian ethnicwear achkan. The Armani store in New Delhi has sold its first shipment of about two dozen virgin wool and velvet achkan priced at Rs 175,000 and Rs 199,500 respectively.

However, traditional popular gifting items from jewellery to watches remained under pressure this Diwali.

Also, the government’s clampdown over the years on black money and corruption is impacting sales of luxury items.

“Some years ago, gifting of watches used to happen for bank managers, bureaucrats and politicians….. wish them Happy Diwali and palm off an expensive gift,” said a luxury watch seller asking not to be named. “Now, it has gone down and has certainly become very discreet now.” Another top executive of a mall that has a luxury brands as tenants said black money has been virtually “sucked out of the system.”