Demonetisation of rupee to hit luxury retailers
effect of the move. “When the PAN-card rule came out in January, there was a short-term hit for three months. In this case, there will be an impact till 31 December. Things will shape up after that. I think it is a very fortunate and positive step because our biggest competition today is the black market in watches,” Saboo said.
Sanjay Kothari, vice chairman of luxury gems and jewellery retailer KGK Group, also believes the government’s decision will have a positive impact on luxury retailers in the longer term.
“Initial disquiet is supremely temporary and that too for a particular group. But while following the global path, India has promisingly announced the channelised reformation, which ultimately leads to the survival of the fittest and that is delightfully commendable. Putting an end to lawbreaking formats will not only earn great benefits for luxury retail brands like Entice, but will determinedly augment the entire economy of the nation,” Kothari said.
“There could be some decline in cash sales because people won’t have liquidity,” said Rajesh Jain, managing director and chief executive of Sports and Leisure Apparel Ltd, which markets premium French brand Lacoste in India.
Jain also said that in the long run, the move would stabilize and benefit economy on the whole. “It is too early to comment but I believe it would take at least six months to a year to get things back to normal. There are withdrawal limits and people won’t have liquidity. For a premium brand like ours, there is need for liquidity on consumer’s end if they want to buy in cash,” he said.
The luxury goods market in India was projected to cross $18.3 billion by 2016, according to a study by industry lobby Assocham.