Dim Diwali: From watches to clothes, luxury brands get the slowdown blues

It’s not only local neighbourhood markets that are seeing sluggish Diwali sales, luxury brands too are disappointed by the downbeat festival mood.  

Mont Blanc watches, leather goods, and precious-resin infused writing instruments are not flying off the shelves. Its Mumbai store in the Palladium mall used to see large corporate houses order as many as 100 business card holders for a single transaction. That’s now down to orders of four or five units, or not at all.

Their pens used to be ordered in dozens. Orders this year are next to nothing. “Sales are down by at least 70 per cent for Mumbai,” said one person who knows the business. 

It seems Mont Blanc outlets in New Delhi are performing better than those in Mumbai, but the overall figures are still expected to be lower than last year. 

The news comes as a surprise given that, according to Knight Frank, 2019, was expected to be a watershed year with India leading the growth of ultra-high net worth populations at 39 per cent, ahead of the Philippines at 38 per cent and China at 35 per cent.

This projection simply isn’t translating into Diwali sales, as Nitin Chainani, CEO of Swiss Promotion, a distributor for watch brands such as Ulysse Nardin, will tell you. High-end Swiss watches traditionally form a large part of Diwali gift-giving among the rich but business is down by 50 per cent as compared with last year.

“Corporate gift buyers who used to buy four or five watches at a time have stopped,” said Chainani, adding that the higher range watches priced above Rs 7 lakh have been the hardest hit.”, it said. 

“Though mid-level watches in the price range of Rs 3-7 lakh such as Tag Heuer, Panerai, and some Swatch Group brands such as Omega are doing better, the sales figures are not what is expected at this time of year, an analyst who monitors Diwali sales added.

Walk into any designer clothing store which caters to businessmen in Mumbai and the absence of footfalls is evident. The staff shrug their shoulders at Diwali sales dipping this year and point to the lingering after-effects of demonetisation and the slowdown in the realty sector. 

In the murky gloom, a light shines in one patch - Apple. Meghna Singh, CEO of Aptronix, the largest Apple-authorised reseller in the country said all three variants of the new iPhone 11 are “absolutely sold out across all my stores”, even though the new device is priced between Rs 65,000 and Rs 1.10 lakh.

 The iPhone product category saw 300 per cent growth compared to last year’s Diwali sales, Singh added, attributing its success partly to the vibrant colours of the phone. Apple brought in the iPhone in a shipment of around 70,000 phones in early September. That's all been snapped up, confirmed Navkendar Singh, research director for devices and ecosystem, India and South Asia at International Data Corporation. "Helping Apple sales are its chipset, advanced camera capability and the fact that once you get an Apple phone, you don't need to get a new one for a while," he said.  

Computer sales are also up by around 200 per cent from last year on account of lowered prices, said Meghna Singh. “My top employees have definitely earned their Diwali bonuses this year," she said.  

Apple’s figures are the stuff of envy. Royce, a high quality Japanese chocolate manufacturing company that retails chocolates which cost around Rs 3,000 for a small box, has seen sales fall by 30 per cent from last year.  

A store manager of a company that retails expensive fragrances believes multiple factors are responsible for slack sales this Diwali. “There is the general downturn, the habit of tightening purse strings when the headlines are bad and of course not knowing what company or industry is going to be hit by a scam or investigation next. Those are not optimum ingredients for a festive spirit,” he said.



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel