Indian tycoon Mallya enters retail, ropes in Louis Vuitton
Chairman and Managing Director of Prestige Group, Irfan Razack (left) in Bangalore 6 November 2007
Photo : Dibyangshu Sarkar/AFP
Mallya's UB Group, the world's third-largest maker of alcoholic spirits, will hold a 55 percent stake in UB City - the Collection, a Bangalore shopping mall exclusively retailing luxury brands, the company said Tuesday.
Mallya, 51, the self-styled "king of good times," managed to rope in France's Louis Vuitton as one of the anchor tenants of the mall, to be located on No. 1, Vittal Mallya Road, named after his late father and due to open in early 2008.
"It has been purely driven by the vision of Mallya, who calls it a value proposition," said Irfan Razack, chairman and managing director of the property group Prestige, which will hold the remaining 45 percent stake in the venture.
"It will be an iconic landmark of Bangalore -- like what the Petronas Towers is to Kuala Lumpur," said Razack, estimating the cost of the project at three billion rupees (76.26 million dollars). "It will be an opportunity to tap high networth individuals."
Other brands who have signed on for space in the 1.5 million square feet complex are Gucci, Fendi, Mont Blanc, Van Cleef & Arpels, Zegna, Rolex and Omega.
The Venetian-style project will include a 250-room JW Marriot hotel, serviced apartments and office space, already leased to Citigroup, Toyota, ABN Amro, Jones Lang LaSalle, 3M, Ernst and Young and Yahoo!.
Mallya this year splurged 595 million pounds (869 million euros, 1.181 billion dollars) to buy Whyte and Mackay, a 163-year-old scotch whisky maker, two years after starting an airline named after his flagship beer, Kingfisher.
He joins Indian magnates Mukesh Ambani and Sunil Bharti Mittal in entering a retail market where consumer spending is set to quadruple by 2025 to 1.5 trillion dollars, according to the consultancy McKinsey.
Unlike those targeted at the middle-class, the Bangalore venture will focus on the seriously rich in a country that has the highest number of billionaires in Asia, according to Forbes magazine.
Annual economic growth of nine percent and booming financial markets are spurring the creation of wealth in the nation of 1.1 billion people, although poverty is still blights large swathes of the country.
"This is for India of the future," said Razack. "Even five years ago, I would have said 'it's not doable' if someone proposed a luxury mall. But today it's different, there's a young generation of Indians with a great deal of spending power."
About 1.6 million Indian households earn more than 100,000 dollars a year, making them all potential customers.
The Indian luxury market is estimated to be worth some two billion dollars and is growing at some 20 percent a year, according to figures from India's main trade federation FICCI.
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