From boutique to big league: How conglomerates like Reliance and Aditya Birla Group are reshaping Indian fashion

Mrs. Harris Goes to Paris, a heartwarming Hollywood film set in the 1950s, is about a humble London housekeeper, Ada Harris, who dreams of owning a Dior dress. She starves, gambles, wins a reward (from a rich woman whose diamond clip Ada finds on the street and hands over to the police), gets a war widow remuneration years after losing her husband, and saves enough to travel to Paris. At The House of Dior store, Ada encounters a host of ups and downs before she finally lays her hand on her dream Dior gown. Ada’s Paris adventure transforms the fortunes of The House of Dior. The housekeeper’s dream of owning a Dior gown inspires the maison — which dresses up only the über-rich and that too on invitation — to make its collection accessible to people. The company launches its prêt line — clothes, footwear and accessories, which, incidentally, also helps the brand steer out of bankruptcy. Though Ada’s encounter with the House of Dior is fictional, the film brings alive the biggest challenge faced by designer labels across the globe — to build scale and stay profitable, the reason why many of them prefer to partner with conglomerates such as Moët Hennessy Louis Vuitton or LVMH (which owns Louis Vuitton, Christian Dior, Bulgari, Fendi and Tiffany), Kering (which owns Gucci, Saint Laurent, Balenciaga, Bottega Veneta and Alexander McQueen), or Richemont (which owns IWC Schaffhausen, Cartier, Montblanc and Chloé). The tie-ups give brands access to capital, and thereby ability to scale and distribute widely. In fact, the most recent instance of an iconic luxury brand choosing to come into the fold of a conglomerate is Tiffany, acquired by LVMH in 2021. Though corporatisation of most global designer labels happened in the 1990s and early 2000s, the Indian story is barely half-a-decade old. Though every Indian bride dreams of dazzling in a Sabyasachi sari or twirling in a Manish Malhotra lehenga on her big day, happily splurging ₹5-6 lakh, for designers, scaling the ₹50-crore business ceiling is still a challenge. Luxury is all about rarity, and selling to the 10-20 odd million Indians who can afford it, but to build businesses of scale, one also needs to come up with lifestyle products that consumers could use beyond his/her wedding or special occasion. The affluent customer walks into a Chanel or a Dior store not just to own a ceremonial dress, but brands also become an integral part of their lifestyle through fragrances, beauty products, bags and accessories. One might be known as a Chanel woman or an Armani man, but it’s rare to hear of a Manish Malhotra lady or a Shantnu & Nikhil gentleman. For most, relationships with these brands begin and end with a single lehenga or sherwani. Indian designer labels need to build a universe of products to own consumers end-to-end. And, to become a maison of stature, they need capital. It was around 2016-2017 that conglomerates, including Reliance Retail and Aditya Birla Fashion and Retail Ltd (ABFRL) started getting global luxury brands into India, after successfully building their own mass retail businesses. While Reliance Retail partnered with Balenciaga, Brooks Brothers, Burberry, Hugo Boss, Ferragamo and Armani Exchange, ABFRL brought in Ralph Lauren, Hackett London, Ted Baker and Christian Louboutin. It was during this time that conglomerates realised building a portfolio of Indian designer labels wasn’t a bad idea either. Domestic designers were making it to international runways, but were still far from being the next Chanel or Dior. Between 2019 and 2023, ABFRL made strategic investments (around 51-60% stake) in Shantnu & Nikhil, Sabyasachi, House of Masaba and Tarun Tahiliani, while Reliance invested in Anamika Khanna’s AK-OK, Manish Malhotra, Rahul Mishra, Abu Jani Sandeep Khosla, Raghavendra Rathore and Ritu Kumar. “They acquired these brands in the interest of creating a legacy for themselves in the long run. This could be a way to promote rarity and possibly look at differentiating themselves,” says Praveen Govindu, partner, Deloitte India. Strategic investments helped designers open more stores and enter newer categories. Ceremonial lehengas and sherwanis were complemented with stylish waistcoats, shirts, chic evening dresses and fine jewellery. While Shantanu and Nikhil Mehra and Rahul Mishra launched their prêt brands, S&N and AFEW Rahul Mishra (AFEW refers to Air Fire Earth Water), Masaba Gupta forayed into beauty with Lovechild. Abu Jani Sandeep Khosla (AJSK) also launched their prêt line Gulabo, while Manish Malhotra got into high-end diamond jewellery. A prêt line refers to ready-to-wear clothing/ accessories. Most importantly, designer brands gained access to top professional talent and tapped into the conglomerate’s strengths in supply chain, distribution, and sourcing. Almost all of them operated out of their respective ateliers, in most cases only with a team of designers. Corporatisation led to the hiring of HR, marketing and finance teams, as well as familiarisation with terms such as return on investment (RoI), scale, measurability, efficacy and so on. For designers, being freed from people management, sourcing, and supply chain to focus purely on creativity was a dream come true. “Mr [Kumar Mangalam] Birla said he would keep all the sourcing (fabrics, factories, capacities) headaches and allow us to focus on creating beautiful brands. S&N is a 100% white-labelled brand. Only the sampling happens in our atelier; everything else is linked to white-labelling factories in Bengaluru and other places. Around 60-65% of fabric sourcing happens through ABFRL. Whether it is from China or Italy, we get that vault now,” says Shantanu Mehra of Shantnu & Nikhil. “The partnership with Reliance has been about creating robust operating systems, the right kind of teams which follow those systems, and at the same time being liberated in terms of creativity. That’s how all brands are built; they are not built with a vision of just scalability,” adds Rahul Mishra. When Reliance shared the proposal for a joint venture, it was a fairytale for Mishra. “The proposal talked about showcasing our craft in global fashion shows that are prohibitively expensive, something which we could have never imagined doing ourselves. We are now a brand that can’t be ignored in the global fashion arena.” The heft of a conglomerate has also translated into high growth. While Manish Malhotra’s business saw an over 400% jump in total income between FY21 and FY24 (from ₹47 crore to ₹235 crore), Shantnu & Nikhil grew by over 300% (from ₹21 crore to ₹87 crore), and House of Masaba saw close to 400% growth (from ₹14 crore to ₹70 crore). The Reliance-Anamika Khanna venture, Reliance AK-OK Fashions Ltd, meanwhile, posted a total income of ₹16.6 crore in FY24. Sabyasachi, who is celebrating his 25th year as a designer this year, is eyeing revenues of ₹500 crore within the next few years. From couture to prêt Shantnu & Nikhil were among the first Indian designers to be backed by a conglomerate in 2019. Nearly a decade earlier, in 2008, Kishore Biyani’s Future Group took a 23% stake in Anita Dongre, which was later sold to PE player General Atlantic for ₹150 crore. When ABFRL bought a 51% stake in Shantanu and Nikhil Mehra’s Finesse International Design (for an estimated ₹60 crore), the designer duo was already incubating their prêt brand, S&N. Their dream was to democratise luxury and take their brand to the maximum number of people. “Kumar [Birla] was a customer and he was pretty much testing us with certain delivery timelines since 2017,” recalls Shantanu. “He called me and said he was going to Davos and would want to wear something traditional, but extremely contemporary. He wanted it in 20 days. Months later, he asked for a sherwani and the timeline was eight days. We did it. Finally, he asked for an outfit for PM Modi’s swearing-in ceremony in 2019, and wanted it in 12 hours. He called us to his home in Delhi four days later and asked us if we were open to scaling up.” With an average bill size of ₹35,000, S&N offers kurtas, waistcoats, bandhgalas, shackets (mix of a shirt and a jacket), sweaters, footwear, pocket squares, duffle bags, and laptop bags. It also has womenswear with signature sari gowns and evening dresses. The duo has incubated Shantnu Nikhil Cricket Club (SNCC), its lifestyle sports brand, which aims to compete with the likes of Ralph Lauren. The plan is to launch exclusive SNCC stores, going ahead. “We want to be India’s first designer maison. There is a Giorgio Armani that sits with four to five brands; we want to be an equivalent of that from India,” says Shantanu. Though democratising fashion and building a maison are paramount, Indian designers are clear about one thing — they don’t want to be in the business of fast fashion. After all, luxury is all about rarity and not multiple SKUs (stock-keeping units). While couture defines their identity as designers, the goal is to democratise slow fashion through their prêt lines. For Anamika Khanna, for instance, AK-OK is not just a way of taking Indian fashion global beyond the diaspora, but also creating an universe where besides everyday wear, consumers would also buy bags, footwear and other accessories. “The average Indian luxury buyer is looking at consuming luxury beyond wedding and ceremonial clothes,” Khanna explains. With a pricing of ₹25,000-50,000, the intent is to be an Indian alternative to a Michael Kors or Ted Baker. Whenever she conceives a design, the ethos is Indian in terms of craftmanship and fabrics, the silhouettes, shapes and sizing are global, says Khanna. “If I don’t give you a part of me, why should you buy a black dress from me? You would rather go to an Armani or somebody else.” While Gulabo is AJSK’s prêt offering, the designer duo is all set to launch their fine jewellery line. “Gulabo continues to grow, taking the brand’s essence to a wider audience through relaxed silhouettes with contemporary charm. However, since the Reliance partnership, the focus has been on strategic global expansion and long-term sustainable growth. Plans are also in motion for Abu Sandeep, the occasion wear label that blends traditional embroidery with modern flair. As we expand across key metros and beyond, we remain rooted in the beauty of craftsmanship and the joy of storytelling,” say the designers. Mishra’s prêt line AFEW Rahul Mishra, on the other hand, is sold at Saks Fifth Avenue, the luxury department store chain in the U.S. The collection will soon be available across Europe. Mishra says though AFEW Rahul Mishra (at an average price of ₹50,000) is not as costly as his couture range, the intent is to make sure that every SKU is handcrafted. Since luxury is all about being one-off, the collection is not entirely similar in any of the stores. “We are a 100% handmade brand, so our processes are slow and rigorous. Luxury can’t be built on scale. The creativity and integrity we do season after season, is what matters the most. That is our biggest differentiator.” Masaba Gupta, who from the outset has largely been a prêt brand at a bridge-to-luxury pricing, is all set to elevate her label into a full-fledged luxury experience. When ABFRL acquired a 51% stake in House of Masaba for ₹90-odd crore in 2022, Masaba had just launched her beauty brand, Lovechild. Within three years, the brand, she claims, has grown 5-6x, from 9-10 SKUs that comprised lip colours and kajal to a 300-SKU and full-fledged make-up brand. More importantly, Lovechild, launched as a premium brand with a lipstick priced at ₹600, now has an average pricing of ₹1,000. “Each lipstick looks like a piece of art,” says Masaba. The fashion house, known for its saris, has a prêt line in both western and Indian wear. It is also into menswear and recently forayed into fine jewellery as well. There’s also the wedding collection, where a lehenga is priced upwards of ₹2 lakh. But why would a bridge-to-luxury brand want to become luxury? Masaba says it will be unfair to believe her customer hasn’t evolved, when she has, as a designer. “The same girl who bought the gown with a cow/camera print on a poplin dress when I first launched a decade ago, is now saying, ‘I don’t care about that quirky print anymore, I would rather have a camera necklace in brass, which also becomes my entry into the brand.’ She has seen every trend on Instagram, travelled the world, experienced a LV or Chanel, and would still want to wear a Masaba, provided she gets what she wants. Very soon, she may say, ‘I don’t care much about a brass camera pendant, I want it in gold.’ Suddenly, she is thinking about smart investments and saving for the future. Audiences are becoming provocative with their dressing and choices, and we have to keep up with that,” Masaba explains. India-first strategy Stefano Canali, CEO of Italian luxury brand Canali, told Fortune India during an earlier interaction, “My advice [to Indian designers] would be to listen to consumers and understand what they really need. Brands must stick to their identity and first understand local needs.” Designer labels need to first make it big in their home country before venturing outside, he had said. “If you are a luxury brand, you are supposed to propose something that is the backbone of your collection, and be consistent with your brand and the message you want to spread worldwide. Also, add a local flavour. The trick is to find the right balance between the weight of local interpretation and the global proposal.” Indian designers agree with Canali. “The day we feel we have been successful in migrating the Indian customer from a PRL (Polo Ralph Lauren) or Brooks Brothers to S&N, it will be a natural progression towards going global,” says S&N’s Shantanu. “We will make our headway globally, but it will be a slow process.” When House of Masaba entered into a JV with ABFRL in 2022, it had seven stores. Today, it has 23. “I want to understand the Indian market first. Just because we have money in the bank doesn’t mean we will go international. The idea is to take it small and first strengthen our position in the country,” Masaba says. Her intent is to build a 360° offering. After all, it is the India consumption story that is gaining momentum globally. Matured markets are reporting sluggish growth, and even global luxury brands are flocking to grab a slice of the Indian market. It’s time for Indian designer labels to shine — showcasing luxe, made-in-India creations, with a global twist. Though Mishra believes his brand is versatile enough to woo Indians at home and global consumers abroad, his strategy is to build larger-than-life stores. “We are building a large-format store in Kala Ghoda, Mumbai, which will be a Rahul Mishra universe. The idea of luxury has to be felt when you walk into a universe,” he says. The challenge Luxury industry observers agree the India-first approach of designer labels is prudent. Building a luxury brand takes time. The likes of Chanel, Dior or Armani are over a century old. It took decades to reach where they are today. In fact, the biggest drawback of Indian designer labels is that they are not old enough to have an infinite life. A loyal Chanel consumer will have stories to narrate about how her mother and grandmother were also Chanel loyalists, but Sabyasachi or Manish Malhotra may find it difficult to build a similar narrative around immortality. “Therefore, tapping into Indian consumers who are hungry to wear designer labels would be a better idea,” says a senior luxury industry consultant. “As India gets recognised, the global audience will start buying into Indian culture and products. I don’t think Sabyasachi will start selling western formal wear in his New York store. He may want to go beyond the Indian diaspora, but it will be through India’s craft and culture route,” explains Deloitte’s Govindu. This deep-rooted cultural pride, combined with India’s long-standing tradition of artistry, sets the stage for the country’s rise in the world of luxury fashion. As Carlo Beretta, general brand manager at Italian luxury major Tod’s, noted in an earlier interview with Fortune India, Indian designer labels have all the ingredients to become iconic luxury brands. “Indians are mature in their attitude towards beauty, art, quality, and craftsmanship. They have a natural aptitude towards luxury products.” Will we see a Rahul Mishra, AK-OK or House of Masaba rub shoulders with a Dior, Chanel or Tod’s? The journey has definitely begun, but it’s one that will take its own time. Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.

From boutique to big league: How conglomerates like Reliance and Aditya Birla Group are reshaping Indian fashion

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