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Hearst Magazines to launch Esquire whiskey and cigar lounges in India in 2018

LiveMint logoLiveMint 12-07-2017 Harveen Ahluwalia

New Delhi: Media company Hearst Magazines International, publisher of journals like Cosmopolitan and Esquire, is planning to expand its operations in India over the next few years—not by launching new magazine editions, but by setting up premium whiskey lounges across the country. 

Esquire whiskey and cigar lounges will be launched by the company, in partnership (licensing agreement) with franchise solutions company Franchise India Holdings Ltd, under which the latter is looking to invest $4-5 million over the next few years. The deal was brokered by New York-based sports and event management firm International Management Group (IMG) and will mark Esquire’s entry into the restaurant and alcohol segment. 

“Esquire lounges will mark the entry of the brand not only in India, but also in the restaurant and alcohol sector globally. In the last few years, many home-grown bars and pubs have come up in India, but there has been no international player. With Esquire, the idea is to create a gentlemen’s club and this will also be India’s first membership club,” said Gaurav Marya, chairman at Franchise India, which helps global brands find franchise partners in India.

Globally, Hearst Magazines is one of the world’s largest publishers of monthly magazines, with 21 US titles and nearly 300 international editions. Esquire is Hearst’s men’s general interest magazine with 24 editions around the world. Launched in 1933, Esquire covers everything from politics and health to fashion and the arts. In India, Hearst publishes only two titles—Cosmopolitan and Harper’s Bazaar. 

“The Esquire brand has global recognition, epitomizing cool confidence, wit and style; the lounges will reflect that, offering guests a truly unique experience,” said Steve Ross, vice-president, global chief licensing director at Hearst Magazines, in a statement on Tuesday.

“This partnership is an excellent opportunity to create a new business with a best-in-class operator and bring the spirit of our brand to a new audience.”

The first Esquire lounge is scheduled to open in central Delhi in early 2018 and will be followed by 14 more lounges in other major cities. Esquire, which was founded as a men’s apparel trade magazine, was acquired by Hearst in 1986.

In 2016, Hearst Magazines’ print and digital assets reached more than 128 million monthly readers and site visitors, according to data from market analytics firm comScore, shared by Hearst.

Rajat Wahi, partner, management consulting, Deloitte India said that whiskey and cigar seems to be a niche play “as the number of cigar smokers or malt drinkers is very small; there are probably less than 5% malt drinkers in the whiskey segment,” he said.

“This proposition, in my view, is more about brand building, and creating a great experience for the evolved consumers and an aspiration for the other ones,” he added. Marya said that although different varieties of alcoholic beverages will be served in the lounges, the primary focus will be on whiskey.

The Indian spirits industry is predominantly a brown market with whiskey, rum and brandy together contributing almost 95% to the total sales and white spirits (gin and vodka) having less than 6% share, according to data from consulting firm KPMG. Over the past few years, the spirits market growth has slowed down (from double-digit to single-digit volume growth) due to decline in the regular segment. 

However, there has been a striking growth in the premium segment with the sector growing at the rate of 15-20% annually. The recently implemented goods and service tax (GST) regime has kept alcohol for human use out of its purview but raw materials and packaging products are included in the new tax.

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