Titan exits joint venture with Montblanc

NEW DELHI: Titan Co. Ltd on Thursday announced an end to its five-year-old joint venture partnership with German luxury brand Montblanc as it focusses on its primary businesses of selling gold jewellery and more affordable watches. Montblanc sells writing instruments, watches and accessories.

Montblanc will now operate and expand as a wholly-owned subsidiary in the country.

“By mutual agreement, Montblanc and Titan Company Ltd, a consumer retail company within the Tata Group, announced today the ending of their joint venture partnership in India,” Titan Co. Ltd informed the exchanges on Thursday.

Titan’s decision to exit the joint venture agreement was driven by the company’s consolidation strategy to focus on its primary business and proprietary brands such as Tanishq jewellery and Titan watches, the company said in its filing.

“We have decided that during these rather challenging times our primary business must take precedence. Both parties have greatly benefitted from this partnership, and our relationship with Montblanc remains strong and positive,” C.K. Venkataraman, managing director, Titan Co. Ltd said.

The Indian market still holds long-term potential for Montblanc, Nicolas Baretzki, CEO of Montblanc International said. "…it is a mark of confidence that we (have) now become a wholly owned subsidiary,” Baretzki said.

Montblanc's pricey watches and pens are largely sold to the country’s affluent. Luxury businesses could be severely impacted from the financial uncertainty as a consequence of the pandemic.

During the five-year-long partnership, that began in 2015, Montblanc opened 12 boutiques, apart from retailing through Tata-owned e-commerce platform TataCliq. In accordance with the joint venture agreement, the partnership will end in December 2020, Titan said.

Analysts viewed the move as largely positive as they expect the market for luxury goods to remain niche in India.

“We see this as a positive as 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, research, Edelweiss Securities.