The Economic Times: January 13, 2014
New Delhi: Swiss luxury watch brand Jaeger-LeCoultre has filed for a 100% single brand application to enter the Indian retail market, becoming the first luxury company to apply for foreign direct investment through this route after it was opened to fully-owned foreign subsidiaries.
Jaeger-Lecoultre is owned by Geneva-based Richemont SA that also owns other luxury watch brands including Cartier and Piaget, jewellery brand Maisons and Montblanc pens. Richemont filed the application with the Department of Industrial Policy and Promotion (DIPP) on Tuesday, according to the department's website.
Any single-brand retailer that opts for more than 51% foreign investment must source 30% of its merchandise locally. Many luxury and high-end retailers say the 30% local sourcing norm was a major stumbling block even if they want to raise the equity beyond 51% or to apply for wholly-owned subsidiary in India.
It's unclear how a luxury product like Jaeger-LeCoultre could honour the 30% local sourcing clause. Jaeger-LeCoultre did not respond to a request for comment till late on Friday.
Jaeger-LeCoultre watches are mostly priced in the US from Rs 530,000 to as high as about Rs 30 lakh for its 2013 collections, according to the company's US website.
Richemont reported total revenue of 10 billion euro in 2013 with an operating profit of about 2 billion euro that year. Almost 86% of Richemont's revenues come from Europe and Asia Pacific while the rest comes from the Americans.
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