Latest News and Events from the Indian Retail Sector

Weekly Retail News from India

General Plans and Information
Big players - plans and investments
International
Regional Trends
Support Industries
HR News
Government Policy
Sector specific

General Plans and Information

1. Shakeout in the Indian retail industry on the horizon?
A new study called India 50, conducted by real estate consulting firm Jones Lang LaSalle Meghraj shows that due to the lack of infrastructure, logistic management and real estate worries will lead to a shakeout in the Indian retail industry in the next three years, with several retailers, concepts and malls shutting shop. According to Abhishek Kiran Gupta, Senior Manager (Strategic Consulting and Research) at Jones Lang LaSalle Meghraj, "A rapidly growing, but highly challenging retail environment will inevitably result in many losers as well as winners and two-three years down the road there could be a shakeout."

Those who survive are likely to be the real winners have far greater opportunities than ever before. The study stated that cities such as Bangalore, Kolkata, Hyderabad, Pune and Chennai are growing rapidly, although smaller cities are fast catching up.
Wednesday, June 27, 2007
Source: The Economic Times

Big players - plans and investments

1. RPG plans to go in for an IPO within a year
RPG Retail is likely to be in the capital market in a year. According to chairman Harsh Goenka, the company is planning an IPO within the next twelve months. The company hopes to reach a turnover of Rs. 13 billion in the 2008 financial year, though its network of brands such as Spencer’s Music World, Books and Beyond, RPG Cellcom and Health and Glow.
Friday, June 29, 2007
Source: The Economic Times

2. Spencer’s Retail announces mega investment plans
RPG Group owned Spencer’s Retail announced that it will be going in for a public issue within the next 12 months to raise capital for expansion. The company will be investing Rs. 10 billion over the next three years using both internal sources and an IPO. The company has already reserved 1 million sq ft of space all over the country and will be creating close to 10,000 jobs in its different formats. Spencer’s Retail currently employs 4,500 people and has 6 million sq ft of space.
Saturday, June 30, 2007
Source: Business Standard

3. Bharti and Wal-Mart getting closer to a deal
The long awaited deal between Bharti and Wal-Mart is getting closer to being signed, and is likely to happen “ as early as next month”, according to Sunil Mittal. He added that, "There has been a delay, as there are multiple agreements and legal issues we have to deal with, but I don't see it taking longer than that. This also has had no impact on the work in progress. We are hiring people, locations are being identified and work is on through Bharti. We are also working on finalising the formal agreements at the same time."
Wednesday, June 27, 2007
Source: The Economic Times

International

1. Tommy Hilfiger to add stores in India
US brand Tommy Hilfiger is planning a major expansion for its stores in India and will be experimenting with different formats to test out its range of apparels and accessories. According to Tommy Hilfiger India CEO, Shailesh Chaturvedi, "We have just completed phase I of our expansion and would be undertaking phase II in a rapid expansion mode. Currently we have nine exclusive stores in seven cities and by the end of this year we would make it to 20 stores in nine cities."

At present there are 9 stores in seven cities and the company hopes to increase this number to 20 stores in nine cities. So far all stores are exclusive stores, but now the company is trying out multi brand outlets (MBOs) as well. Tommy Hilfiger has also opened factory outlets in certain cities where it does not have exclusive stores.
Friday, June 29, 2007
Source: The Economic Times

2. Landmark plans to increase investment by Rs. 4.5 billion in India
The Landmark Group announced that it would be investing Rs. 4.5 billion for its Lifestyle and Home Center brands in India. According to Lifestyle Executive Director Kubir Lumba, "We would invest Rs. 450 crore (Rs 4.5 billion) to triple the number of both our retail formats Lifestyle and Home Centre over the next three years. We would primarily target Tier I and metro towns across the country."

The expansion would take the total number of Lifestyle stores from 12 to 36 and Home Center outlets from 5 to 15 in the next three years. The expansion is to be funded by a mix of equity, debt and internal sources.
Friday, June 29, 2007
Source: DNA Money

Regional Trends

1. Retail and real estate biggies look for opportunities in small towns
Real estate developers are looking for partners for mall projects in smaller towns and cities. Unitech Limited has already planned to invest Rs. 5 billion in a Greenfield retail project in cities such as Pune, Nagpur and Indore. Other developers such as Parsavnath and Omaxe are currently going through proposals from local developers for buyouts.

According to Sanjay Chandra, managing director of Unitech, “We do not mind picking up majority or 100% stake in greenfield mall projects in upcoming towns and cities. It gives us the first mover advantage.” DLF is also considering several such proposals although it has yet to take a decision on any project as yet.
Wednesday, June 27, 2007
Source: The Economic Times

Support Industries

1. UK retail experts to take on staff shortage
Retail Management Consultants (RMC) announced that it will be setting up a joint venture to provide experienced expats for senior positions in the retail industry. According to RMC Consultant Tony Brett, "Already about ten expats have been hired from Europe through us by some major retailers in India. In another two months time, we should be starting our operations here through a joint venture." A joint venture with an Indian company has already been formed although the company did not disclose the identity of the company.
Friday, June 29, 2007
Source: The Economic Times

2. Lack of infrastructure can undo retail boom
The bad shape of infrastructure in the country could be the downfall of the Indian retail industry, according to experts at a retail conference organized by the Indian Retail Forum (IRF). Before companies make expansion plans, they need to concentrate on setting up supply chains and logistic facilities. A study released earlier this week by Jones Lang LaSalle Meghraj has already highlighted the need to improve infrastructure, logistics and manpower which unless addressed would lead to a shakeout in the industry.
Friday, June 29, 2007
Source: The Economic Times

HR News

1. McDonald’s India facing severe shortage of trained manpower
According to senior company officials, McDonald’s restaurants are suffering due to a high attrition rate of 83% at the front-end level. Vikram Bakshi, managing director of McDonald’s India, said, "Well-trained people with experience are being pulled by different people because they need that talent." McDonald’s is planning to open 45 restaurants by the end of 2007 to add to its 113 restaurants currently.
Friday, June 29, 2007
Source: Yahoo News

Government Policy

1. West Bengal tell Reliance Retail to keep off grains
The West Bengal government has issued a rule to Reliance Retail for its stores in the state, that it should not touch any items that could “unsettle the lives of small shopkeepers and vendors”. West Bengal chief minister Buddhadeb Bhattarcharjee is working to persuade his colleagues on to being more practical and said on the matter that, “We have told Reliance not to touch foodgrains. However, we don’t want to stop them. How can we? Spencer’s, Pantaloons, all have set up shops. Why should we stop Reliance?”
Friday, June 29, 2007
Source: The Economic Times

Sector specific

Apparel & Footwear

1. Prateek Apparel makes its foray into retail
Garment manufacturer Prateek Apparels made its foray into retail by opening its first lifestyle mall called Coupon in Bangalore. Located on Hosur Road, the mall is spread over four floors and covers a total area of 50,000 sq ft of space. Prateek Apparels is planning to open 12 malls like this across the country and will be investing Rs. 1.5 billion for the venture.

According to Pradeep Agarwal, managing director of Prateek, “Over the last one decade we have been in the apparel and fashion sector. Now we have entered into the fast-growing retail business with our own branded retail chain. Through this venture, we will provide national and international brands across categories at the best of prices.”
Thursday, June 28, 2007
Source: Business Standard

2. Ritesh Properties enters retail sector
Ritesh Properties and Industries (RPIL) announced that it has entered the retail sector and will be opening its own brand for ethnic wear for women called Femella by the end of the year. RPIL will also be acquiring Catalina Bay, a reputed sports wear brand in the US that will help the company in marketing its apparel in the US market.
Thursday, June 28, 2007
Source: Business Standard

Home Furnishings

1. Godrej Lifespace plans to invest Rs. 500 million
Currently holding about 28% of the market share in India, Godrej Lifespace is planning to set up 100 Lifespace stores to consolidate its presences in the home appliance market by 2010, with an investment of Rs. 500 million. The Godrej Lifespace stores stock everything for the home and the office, including furniture, home appliances, security systems and lifestyle products.

There are 48 Godrej Lifespace stores at present and the company plans to set up 20 more in the current financial year. Sales are increasing at a steady pace and the 2006-2007 financial year saw a turnover of Rs. 1 billion for the company. According to Shyam Motwani, vice president and business head of Godrej Lifespace, “We are expecting a turnover of Rs. 150 crore (Rs 1.5 billion) in the present fiscal, and up to Rs. 400 crore (Rs 4 billion) by 2010.”
Thursday, June 28, 2007
Source: Business Standard

Food & Grocery

1. Big Apple to invest Rs. 450 million in retail stores in NCR
Grocery store chain Big Apple announced that it would be investing Rs. 450 million to double its stores in Delhi and the NCR area by 2008-09. According to Munish Hemrajani, managing director of Big Apple, "We would invest Rs. 45 crore (Rs 450 million) to set up 65 new stores in Delhi and NCR to take up the total number to 100, which would be further increased to 140 by the end of this fiscal." The company plans to expand to other locations such as Karnataka and Gujarat in the next financial year, with 200 stores in Gujarat and 50 in Karnataka.
Friday, June 29, 2007
Source: The Economic Times