Desirée Bollier, wearing thick, black-rimmed glasses and a sharp grey suit, says luxury industry is facing an existential crisis after Covid. “Many luxury houses,” she says, “are using this crisis to rethink everything—from supply chains to design.” Bollier would know. She is the chair and global chief merchant of Value Retail. It is the operator behind The Bicester Collection, which has 12 open-air, luxury shopping villages—from Bicester Village in the UK and Belmont Park Village in the US to La Roca Village in Spain—housing more than 1,500 boutiques of fashion and lifestyle brands. Sales generated by shoppers from India are second only to those from China. The Indian consumer profile is youthful, with millennials and Gen Z making up 53% of shoppers. Their preferences lean toward brands like Burberry, Valentino, Gucci and Dior. In an interview with ET, Bollier talks about the future of luxury fashion. Edited excerpts:How has your business been post-pandemic? What is the outlook for this year?
Our outlook is counterintuitive to where the market is going because we are projecting double-digit growth. This projection isn’t naïve but is based on the business model we have built over the past 30 years. We are a brick-and-mortar business and operate in an environment of experiential retail. It is about curating experiences for our guests throughout their journey in our Villages, from unique architecture to exceptional services.
From a business perspective, when you look at what guests want today, it’s more about high-touch experiences. We visit India at least five-six times a year, really immersing ourselves in the culture of giving, hospitality and service. This understanding allows us to translate those values back into our Villages, ensuring that an Indian guest feels at home. In a world that is becoming binary—either online or experiential—we want to firmly position ourselves in the experiential space.
What will drive this double-digit growth?
We have had consistent double-digit growth year-on-year since our business began, except during Covid, which was a global disruption. Last year, we saw high single-digit growth, which is unusual for us. The factors driving this growth include our focus on ‘newness’ and curating upcoming trends. Brands today are sitting on mountains of stock due to global slowdowns caused by factors such as double wars, election years across continents and a slowdown in China.
In a fashion cycle, products are created 9-12 months in advance, and no one predicted this dramatic slowdown. Many brands are now very conscious of their brand equity and are unwilling to dump stock anywhere. We have become the natural candidate for these brands by offering additional space, pop-ups, trunk shows, or short-term flexible contracts (e.g., three to six months) to test the market.
Where does India fit into your revenue and business strategy?
India is extremely important as a source of visitors. Indian travellers often visit as families, making their trips highly experiential. Services are critical for Indian guests because the culture deeply values hospitality. Strategically, India has been a key driver in increasing visitors to our Villages. The Indian middle class has now reached a level nearly surpassing China’s, and the younger generation is hungry for experiences and discovery. We are seeing a nearly double-digit growth from India across our Villages, particularly in key destinations like the UK and France and increasingly in Italy and Spain. We are also seeing travellers originating from beyond Indian metros—imagine the depth of that, if we do this right. There’s a significant difference between being a shopping centre and a destination. When you position as a destination, you want to be on the global travel map—and that’s why India matters greatly to us.
There’s been talk of a luxury slump globally. What’s your take on it?
I wouldn’t call it a slump but rather a crise existentielle—an existential crisis—in luxury. Many luxury houses are using this crisis to rethink everything—from supply chains to design.
Questions like, ‘Do I want to go ultra-luxe or broader? Rethink my heritage?’, are being asked. Around 20 CEOs and 12 designers have changed roles in the past year, and the musical chairs are not over yet. This is a challenging moment, but I believe the luxury industry will emerge stronger and more creative. Post-Covid, everyone experienced an existential reckoning. Some individuals came out of it stronger, ready for the next challenge, while others are still struggling.
The fashion industry is experiencing a similar phenomenon. I’m optimistic some leaders will lead the way in a much more clever way than others. M&As are going to happen, and retooling and pivoting are taking place as we speak.
What are the early signs of where fashion houses are heading?
I think it’s a combination of everything, inflation being one of them. Brands underestimated the psychological impact it (increasing prices) would have on customers. For example, a bag doubling in price overnight leads to questions in customers’ minds such as, ‘What have you done to justify this increase? Did you improve the lining? The leather more unique?’ So I think there was a miscalculation between what the brands thought they could get away with and how the customer reacted to it.
What about overexposure taking away from exclusivity? Is that a problem?
Yes.
How will things change?
They have no choice but to change. They can’t increase the prices. The prices will remain the same, but there will be an absolute shrinking of distribution—mark my words. Brands have no choice but to take a hit. You cannot be in a luxury space and be ubiquitous. The best example is Hermès. They have always increased prices gradually—2-3% annually—without compromising on quality or exclusivity. Hermès doesn’t allow its products to flood the market. Brands will need to assess where they want to be and clean up their distribution channels.
What can be the effect of a potential increase in taxes on luxury goods in India? There’s concern that Indian shoppers may increasingly go abroad to purchase high-priced items.
I am not aware of it [but] shopping tourism is a fact. A tax increase might make customers ask, ‘Do I really need this now, or can I wait until I travel to Europe?’ Taxes exist everywhere, and while they might influence timing, they won’t stop someone from purchasing what they want. For instance, if someone is travelling to Milan next month, they might wait to buy there. But if the trip is a year away, they’ll pay the extra tax and move on.
