It’s the next big market, retailers say. If the north has Ludhiana and Chandigarh, it’s Pune for the west.

The city is among the top six or seven most attractive cities in India for luxury retailers to set up shop, says Neelesh Hundekari, principal and head, luxury and lifestyle practice, AT Kearney India. Luxury marketeers such as Abhay Gupta, executive director of Blues Clothing Co., the retailer for Versace and Corneliani in India, want to set up shop in Pune in the later half of 2011 or 2012. Gupta brackets Pune with Kolkata and Chennai as the place to go to once the other metros are saturated.

A Hermès leather shoulder bag. Abhijit Bhatlekar/Mint

Most noticeably, over the past year, Pune has become home to the first branch of Ananda in the Himalayas spa, winner of several awards for being one of the Top 10 yoga retreats in the world. Sixth Sense Spa and Resorts, which has been consistently rated as one of the world’s best spa resorts by Condé Nast Traveller since 2000, will make its India debut in Pune soon. In January, French luxury retailer Hermès opened its second India store in Pune (after Delhi). One of the world’s most celebrated designers, Philippe Starck, will be collaborating on a luxury residential project with a local real estate development company, Panchshil Realty. Ista, a business-luxury chain of hotels, is a new entrant to a market that will see 12 five-stars come up in the city in the near future.

Old money, new bag

Pune represents a confluence of old and new money, with families such as the Bajajs, Kirloskars, Kalyanis and Poonawallas representing old wealth, and the real estate, IT, auto and engineering sectors creating new wealth.

It is the coming together of engineering and IT services and a booming educational hub that is creating wealth in the city, helping it grow at over the national growth rate, says Pradeep Dokania, chairman, Merrill Lynch Wealth Management.

“While there are no figures available, the number of affluent households in Pune is substantial," says Sanjay Kapoor, managing director, Genesis Luxury (part of Genesis Colors), which is the franchisee for Bottega Veneta, Burberry, Canali, Etro, Just Cavalli, Jimmy Choo, Paul Smith and Tumi in India, with 25 stand-alone stores across Delhi, Mumbai, Bangalore and Hyderabad.

“These consist of industrial families with second- and first-generation wealth, and professionals with a household income of Rs5 million and above. All these people are used to shopping for luxury goods overseas or in metros such as Mumbai and Delhi. Hence, the potential for brands to tap this market is huge," Kapoor adds.

The second Hermès store in India opened in Pune in January, a precursor to the Mumbai outlet opening in May. Abhijit Bhatlekar/Mint

This spending power, it would appear, now has newer avenues to swipe its card.

Hermès, for instance, opened a store in Delhi a few years ago. A statement from the company after its Pune store opened earlier this year said: “The road to Pune will lead us to the significant step for Hermès in India: the opening in Mumbai, in May 2011, of our flagship store in India." When asked why they picked Pune ahead of Mumbai, Hermès India managing director Bertrand Michaud told the Hindustan Times in January that “Hermès does not follow a specific pattern, nor does it focus on market trends. Pune is a city that reflects the brand’s goals—to explore, surprise and offer exclusive items." Hermès declined to participate for this article.

“Puneites spend a hell lot of money and they want variety," says Sabina Sanghvi, station head, Radio One, Pune who loves her Jimmy Choo shoes.

If anything is an indicator of luxury, it has to be this—lying on your stomach with someone kneading you to the odours of scented oils, elevator music in the background at a cost that a single rupee note would not cover. Manish Patwardhan, founder and CEO of the advisory firm Spa Consultants, says there has been an influx of spas in recent months—his company alone has helped start three in the city in the last six months and has three more coming up in the next six.

The flood of spas is not just a result of people willing to invest in them, but also of an increasing number of clients who want to pay to get pummelled on a table. “These (high-end) spas are obviously trying to speak to a spa-goer, not the uninitiated, to someone who knows brands and is picky," says Mumbai-based Sandhya Chipalkatti, publisher and editor of StyleSpeak, a magazine dedicated to spas and salons.

The real deal

The location for the upcoming international chain Sixth Sense Spa is at the 17-acre site in Magarpatta City, which will have the “YOO inspired by Starck" residential project.

Executive director of Panchshil Realty, Sagar I. Chordia, was travelling in Tel Aviv when he chanced upon two buildings he really liked. He chased down the designers and struck a deal with YOO, a company partnered by designer Starck and John Hitchcox, a property entrepreneur. Yoopune will have 228 flats, each 5,500 sq. ft at a going rate of Rs15,000 per sq. ft. “It’s not a real estate project, it’s more like a hotel condo," says Chordia, adding that they have already sold 46 apartments in a complex to be completed by 2014. “Lots of people want to move from bungalows to apartments. People don’t have time to do their interiors. So why not give them designer homes?" he says.

Ista, one of the city’s new hotels, has 209 rooms, plus the Hermès store and the Ananda Spa on its property on Nagar Road, near the newly hip Kalyani Nagar. Set up in 2006, the chain, owned by IHHR Hospitality, started with Bangalore. Pune is their fourth property after Hyderabad and Amritsar. At room prices ranging from Rs6,500-7,000, the hotel is aimed at the 35- to 45-year-old business executive.

“Pune is growing because Mumbai has gone beyond the seams," says Nikhil Kapur, general manager of Ista.

“A lot of new and existing businesses are choosing Pune as a hub. Back-end and high-end engineering companies are here along with several research facilities. Normally, a hotel like ours should be 50% non-resident visitors (people who are not staying at the hotel, but are there to use facilities such as dining, spa, shopping, etc.). We get 70% because Pune recognizes quality and appreciates it," says Kapur.

Viman Nagar, 2km from the airport, hosts another symbol of growth. The Rs700 crore Phoenix Market City will be spread over 3 million sq. ft, including 1.5 million sq. ft of retail space that will house 280 brands, commercial offices, hospitality outfits, and 500,000 sq. ft of parking. It’s being developed by the same company that owns the thriving Phoenix Mills in central Mumbai.

“Pune is a huge untapped market and has one of the most homogenous populations," says Tushar Mehta, the director of the Phoenix Market City. “It’s got the right mix of people, highest expat student population and high literacy. Pune has not had choice till now but it’s a choosy, value-conscious city. They will pay a price if they find value to the product."

Mehta adds that Pune has the advantage of being surrounded by cash-rich neighbours, who come to Pune for “big-ticket items". A case in point was the one-time order for 150 Mercedes-Benz cars worth Rs65 crore from a group of entrepreneurs, industrialists and businessmen from Aurangabad, an industrial town about 200km from Pune, in October. The owners apparently wanted to announce Aurangabad’s arrival as an economic powerhouse.

It would appear that Pune is no longer the kind of city that people like Indranil Sengupta, assistant vice-president of marketing and brand communications, at Zee Entertainment Enterprises, think of it as—just “a place of food, pubs and possibly Osho".