Nirav Modi was perhaps the first Indian luxury brand to have a 1,000 sq ft store in the most luxurious address of New York, Madison Avenue. It has legendary brands such as Chanel, Hermes, Prada and Gucci as its neighbour, and the designer is known to be shelling out to the tune $1.5 million a year as rental for the store. The store launch in 2014 was graced by the likes of then US Presidential contender Donald Trump, actress Naomi Watts, and model Coca Rocha. The designer had also walked the Red Carpet alongside Kate Winslet at the Oscars that year as the later had adorned a Nirav Modi jewel. Post Madison Square, the designer also set up stores in other luxury locations such as Old Bond Street in London and in Hong Kong and Macau, and the plan was to set up at least six stores at various high-end retail locations across the globe.
So, what does it take to be a serious luxury brand? Legacy and authenticity, of course. While legacy was always a challenge for the diamantaire-turned-designer (who had to constantly deal with questions such as why would the discerning luxury consumer opt for a Nirav Modi jewel and not a Cartier or a Tiffany, which are over 100-year-old brands and are hugely trusted), his involvement in the Rs 11,300-crore PNB fraud will now put a serious question mark on the authenticity and credibility of his brand too. Brand experts say that this scandal could well be death knell for brand Nirav Modi. "Scandals such as these can destroy the brand for generations to come," says the MD of a global brand valuation company.
Modi's jewels may have fetched a whopping Rs 60 crore at the famed Christie's auction, his jewels may be priced nothing less than $3,000 or his stores may be located in the priciest retail locations in the world, but brand experts say all this is more to do with his money power and his personal relationship with celebrities. "Brand Nirav Modi has never had the unique craftsmanship or mystery that is usually attached to a luxury brand. I am not even sure if it is a brand in the first place. The same celebrities who have patronised him will now stay away from him and his brand," remarks a leading brand specialist, who feels that the foundation of the brand itself was weak.
Why would one spend lakhs on having a Louis Vuitton bag? The obvious reason is its strong connection with royal families and nobility across the world for centuries. It is all about legacy and authenticity. If a luxury brand doesn't have heritage, it at least needs to have a convincing story to tell. In fact, Modi in an interview with Business Today a couple of years ago had said that his brand was all about authenticity. "We spend hundreds of hours creating even a small piece of jewel. If we make a necklace it takes us a minimum of 2,000 to 3,000 hours," he had said. His claim of authenticity has certainly come under the scanner post the news of the PNB fraud. The most important pillar of a luxury brand is trust and brand Nirav Modi has completely lost out on the trust factor.