Aditya Birla Fashion and Retail Ltd (ABFRL) aims to expand the footprint of French luxury department store chain Galeries Lafayette in India by opening a new large-format outlet roughly every two years, betting that the country’s luxury market is entering a new phase of growth as more affluent consumers buy premium goods domestically rather than overseas.
The retailer, which has an exclusive partnership to develop and operate Galeries Lafayette in India, last year opened its flagship store in Mumbai across the interconnected Turner Morrison Building and Voltas House in the historic Kala Ghoda neighbourhood. It is now evaluating two to three locations for its second outlet in Delhi, which is expected to open in the second half of 2028, while Hyderabad or Bengaluru are likely to follow.
“We’re talking about one every two years or so. Once the model is accepted by customers in these markets, we’ll adapt it,” Sathyajit Radhakrishnan, chief executive officer, Galeries Lafayette India & International Mono Brands at Aditya Birla Fashion and Retail Ltd, told Mint.
Founded in Paris in 1894, Galeries Lafayette operates about 57 department stores across France and overseas, competing with global luxury chains such as Harrods, Selfridges, Printemps and Saks Fifth Avenue. ABFRL launched its first Galeries Lafayette store in November 2025. The company invested about ₹200 crore in the business in FY26, including ₹150 crore in one-off capital expenditure that management said will not recur, according to its earnings call for the year.
Boutique dominance
The company believes India is now ready for the department store format, a model that has remained largely absent even as global expanded through standalone boutiques. Unlike mature luxury markets, the country’s luxury retail landscape has been driven primarily by mono-brand boutiques housed in luxury malls, making the department store model a relatively untapped segment. “For the longest time, India has had mono-brand stores. Department stores are an important stepping stone because they are more democratic and consumers can discover brands, categories and products in one place,” Radhakrishnan said.
As India’s matures, consumers will increasingly seek curated retail experiences rather than shopping by brand alone. Industry estimates peg the country’s personal luxury goods market at $8-16 billion, he said, and the segment continues to grow at a double-digit pace and is nearing an inflection point. “The real magic will happen when India reaches around $5,000 in per capita GDP,” he said, adding that cities such as Mumbai and Bengaluru already have significantly higher income levels than the national average, creating concentrated pockets of luxury demand.
According to the World Bank data, India’s per capita GDP stood at $2,702.5 in 2025.
At 12:50 pm, ABFRL shares were trading at ₹60.4, up 4% on the National Stock Exchange.
India’s luxury retail market has largely been driven by mono-brand boutiques housed in luxury malls such as DLF Emporio and The Chanakya, Mumbai’s Jio World Plaza. Despite being among the world’s fastest-growing luxury markets, India remains small compared with mainland China’s roughly $50 billion and the US’s more than $75 billion, underscoring the significant headroom global brands see in the country.
Recent filings also highlight a divergence in demand, with Hermès posting strong growth while Gucci and Dior reporting weaker sales, pointing to resilience at the ultra-luxury end of the market. In March, Mint reported that in FY25, reported a revenue of ₹427.9 crore, up 32.9%, while Gucci India’s revenue fell 17.7% to ₹265.4 crore and Christian Dior India’s slipped 3.4% to ₹257 crore.
There is also a growing interest from international luxury houses entering India. ABFRL said beauty is emerging as the gateway into luxury consumption. “We’re building a ladder of luxury,” Radhakrishnan said. Customers often begin with premium beauty products before moving to fragrances, handbags and eventually ready-to-wear fashion as their spending evolves.
Beauty has already become one of the strongest-performing categories at the Mumbai store, possibly because it has relatively more accessible luxury products.
While AFBRL initially expected the Galeries Lafayette business to be driven largely by men’s luxury, women’s ready-to-wear has exceeded expectations. Sales are now almost evenly split between men’s and women’s fashion, while the inclusion of beauty shifts the overall mix to roughly 60% in favour of women. “We expected the market to be largely male-led. Women’s ready-to-wear has been a very pleasant surprise,” Radhakrishnan said.
He said Indian consumers are also becoming more discerning. While aspirational shoppers continue to value globally-recognised brands, more experienced buyers are increasingly interested in craftsmanship, design and the stories behind labels rather than prominent logos alone.
ABFRL also expects Galeries Lafayette to complement, rather than compete with, its existing luxury retail chain, The Collective. While Galeries Lafayette will serve as a flagship destination offering a wider assortment of international brands and categories, The Collective could function as a feeder format, introducing customers to premium fashion before they trade up within the group’s luxury portfolio. “We see them co-existing together as a hub-and-spoke model,” Radhakrishnan said.
Despite concerns around slowing luxury demand globally amid geopolitical uncertainty, Radhakrishnan said the company has not seen any moderation in India. In fact, business at the Mumbai store has improved month after month since the launch, while the broader luxury market continues to post double-digit growth.
He also expects a larger share of luxury spending to remain within India over the coming years. While destinations such as Dubai continue to enjoy tax advantages, AFBRL is working to keep prices as competitive as possible with nearby international markets.
“The idea is that consumers shop here and travel abroad for experiences rather than travel abroad to shop,” he said, adding that some of the luxury consumption that shifted to India during the pandemic has stayed in the country.
Radhakrishnan expects India’s luxury retail ecosystem to develop around a limited number of premium destinations rather than an explosion of luxury malls.
For now, he said the company’s focus remains on building destination stores that anchor those luxury ecosystems. “I don’t see 100 luxury malls coming up. Maybe seven to 10 true luxury centres,” he said.