Why Indian designers are getting into bed with corporates

The corporatisation of Indian fashion is real and here to stay

There’s nothing quite like a big fat Indian wedding. A grand celebration that lasts for days. A mammoth industry that’s propelled the rise of many businesses. Fashion remains a crucial one, and it often comes with the bold stamp of a prolific Indian designer: Anita Dongre, Tarun Tahiliani, Sabyasachi, Manish Malhotra, Shantanu & Nikhil, the list runs long. There’s no denying their place and prominence as the country’s hottest couture houses. But what each of them has in common is that they are backed with considerable funding by a conglomerate that’s allowed them to expand their respective businesses. And with good reason.

“The Indian luxury marques have been boxed into a specific genre of gender-specific bridal or occasion wear, centred around seasonality,” says Rahul Prasad, managing director (Asia-Pacific), Pike Preston Partners Ltd, a boutique advisory firm on mergers and acquisitions in the fashion and luxury segments. “The onset of the pandemic, with its restrictiveness in retail operations, consumer behaviour, buying patterns and supply chain issues was an unexpected financial re-think for designers and a catalyst for Indian conglomerates to widen their portfolio. The potential of such collaborations is lucrative—ready-to-wear accessible fashion, leather goods, fragrances, skincare, beauty, etc. These collaborations could ultimately lead to a global Indian luxury brand,” says Prasad.

The two most potent players on the turf are Reliance Brands Ltd (RBL) and Aditya Birla Fashion and Retail Limited (ABFRL). Since its inception in 2007, RBL has dominated retail in the country by bringing in global brands and investing in Indian luxury labels. The most recent of which included acquiring a 40 per cent stake in Manish Malhotra, while Reliance Retail Ventures Ltd (RRVL) acquired a sizable stake (a little more than 52 per cent) in Ritu Kumar’s Ritika Pvt. Ltd. The monies behind RBL’s binge buys were not disclosed. ABFRL, on the other hand, were more obvious: a 51 per cent stake in Sabyasachi for about Rs 398 crore in January, followed by a 33.5 per cent stake in Tarun Tahiliani’s couture label in February for Rs 67 crore.

Capitalising the future

These numbers reinforce an emerging trend of giant corporations dipping into Indian wear powerhouse, heralding a fashion revolution there’s no turning back from. “The biggest corporate houses are looking at fashion very seriously, and it’s a great thing,” says designer Rahul Mishra, who has showcased multiple ready-to-wear and couture shows at Paris Fashion Week. “Otherwise, it would’ve been a very small industry. Funding opens up the market. It’s not just sustaining but growing that’s important.” Ask him if it’ll allow Indian designers to make an impression on the global map, and he says, “designers do sell globally from multi-brand stockists, but it’s difficult to attract the attention of the foreign media who blank you out completely.”

Ironically, Mishra is self-funded and intends to stick to his profitable format. “I must’ve spent about Rs 40-50 crores doing international shows.” He doesn’t look at sponsors for two reasons: “it interferes with your work, and once you get the comfort of someone else's money, your mental stance shifts, and you become too reliant.” It raises crucial questions. Has commerce finally come to usurp creativity? Are big-ticket designers ready to welcome outside control? Has the business of fashion gotten bigger than fashion itself?

Winds of change

The pandemic brutally hit luxury consumption, but revenge spending is at an all-time high, and the market is looking up. According to McKinsey’s 2021 report, the Indian luxury space is projected to surpass $200 billion in 2030, with 300 fashion brands looking to enter India. Undeniably, creativity goes hand-in-hand with commerce and designers Shantanu & Nikhil’s business mind Shantanu Mehra agrees, “​​fashion is incomplete without its blithe side, but the corporatisation of fashion has been long overdue, and it’s brought with it a safety net, allowing us to be a larger creative force.” ABFRL bought a 51 per cent stake for Rs 60 crore in the Delhi-based powerhouse in 2019 and helped them kickstart a new bridge-to-luxury celebration wear brand called S&N by Shantanu & Nikhil that targets millennials and Gen Z. “The pandemic didn’t stop our growth. Our retail presence of five couture stores pre-merger has become 10, along with an omni enabled SAP driven e-commerce website.” As for the nature of the transaction itself, he says, “there is a difference in the way a venture capitalist would look at corporatisation versus a strategic partner. ABFRL’s joint venture with Maison Shantanu & Nikhil is purely strategic with access to their magnificent bouquet of supply-chain intelligence, technology transfer, corporate governance and retail growth.”

It’s not just the heavyweights in the industry who have their bank accounts looking fuller. New-age labels, who have blitzkrieged their way into the market and offered the urban consumer wearable hype-worthy clothes, are getting eyeballs as well. Purple Style Labs invested in two multi-designer platforms, Pernia’s Pop-Up Shop and The Stylist. And, likely, the gamut (there are many) of designers sitting in the mid-market segment are possible candidates for big and small corporations. Designer Dhruv Kapoor, who has been consistently pushing boundaries with edgy sports luxe clothing and recently had Bella Hadid show off his clothes in Vogue, is self-funded like Mishra. Both, rare outliers in the game, who are big on full creative control. But Kapoor is pro-funding for younger designers, “bigger pockets get you into a bigger arena. It brings in an entire ecosystem that one may not have access to, like heavy advertising, publicity and marketing. It puts you at the centre of international shows and attracts buyers. It streamlines management and gives your company a more corporate structure.”

There may come a time, not long from now, where everything you buy or wear—from an Indian couture brand or cool homegrown label—will be created by a designer thanks to the resources provided by a corporate giant. It’s arguably the only way to keep the industry alive and make it a competitive market, spoiling the consumer for choice. But if you really want fashion, the kind that Elsa Schiaparelli or Oscar de la Renta would have applauded, be ready to spend a truckload of money because you’re not going to find the highest order of creativity that easily anymore.

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