In a bid to focus on its core businesses, retail behemoth Titan said it will end its five year old joint venture with luxury goods maker Montblanc. The Bengaluru-based jewellery-to-watch manufacturer said its decision to exit the JV was driven by the company’s consolidation strategy to focus on its primary business and proprietary brands. With this, the Germany-headquartered company will now have a wholly-owned subsidiary in India.
Analysts see this move as a positive for Titan. “It will allow Titan to focus on its core business and improve profitability. India is a mass market and premium products will remain niche and small,” said Abneesh Roy, executive vice-president at Edelweiss Financial Services.
During its five years of JV with Titan, Montblanc opened 12 boutique stores in the country and established an e-commerce business through Tata’s online portal TataCliq.
“We have decided that during these rather challenging times our primary business must take precedence. Both parties have greatly benefited from this partnership, and our relationship with Montblanc remains strong and positive,” said C K Venkataraman, managing director of Titan Company Limited.
Titan holds a 49 per cent equity stake in the JV, Montblanc India Retail Private Ltd. The partnership would end in December this year.
Commenting on the next stage of business in India, Nicolas Baretzki, CEO of Montblanc International, said, “Our partnership with Titan allowed us to establish Montblanc as a luxury Maison with a significant presence in India today, and set us on course for the next chapter of our journey. This is a market that holds strong long-term potential for Montblanc, and it is a mark of confidence that we now become a wholly-owned subsidiary.”
Source: Business-Standard