News and views about the Retail sector in India

Weekly news updates on trends and happenings in the Indian Retail Industry

The focus this week is on the international firms that are entering India – not to sell to the masses, but to sell to the sellers. The support industries that are enthusiastically setting up shop in India know the ride is just beginning.

- Chillibreeze Business Research Team

General trends and information
Big Players – plans and investments
Unique Formats
Support industries
Regional News
International
Lifestyle & Luxury Retailing
Government Policy

General trends and information

Retailers eye health and beauty segment

India’s second largest listed retailer, Shopper’s Stop Ltd, is running a pilot project for a chain of beauty and personal care products called Arcilia. The 5,000 sq. ft store, currently being piloted in Pune’s upmarket Kalyani Nagar area, houses luxury and premium brand cosmetics, perfumes, accessories such as watches and sunglasses and other high-end personal care products.

And it is not the only company looking to create a presence in the health and beauty retail segment. Several retailers in India are in the process of testing or entering the Rs25,000 crore personal care retailing segment, which is among the fastest growing retail segments according to AT Kearney, a management consulting company.

Reliance Retail, the retail arm of Reliance Industries Ltd, launched a pilot store for its health and beauty chain, Reliance Wellness, at its first hypermarket in Ahmedabad last fortnight. After gauging the response to its first store, which sells drugs and personal care products, the company intends to roll out stand-alone stores and store-in-stores in its hypermarkets. India’s largest listed retailer, Pantaloon Retail India Ltd, which currently runs hair care chain Star Sitaara, is also planning to revamp and strengthen its offering in this segment. Consumer products company Dabur India Ltd has upscaled its plans to open 160 health and beauty stores from the 120 its had announced ­earlier.

Several organized retailers such as Subhiksha Trading Services have set up pharmacy chains, but only the RPG Group has a health and beauty chain, called Health and Glow. Analysts say the success of male fairness creams and Marico Ltd’s Kaya Skin Clinics suggests that Indians are spending more on themselves.

Several retailers are focusing on offering both products as well as services such as giving professional beauty advice or ayurvedic consultations in this segment. This could help increase margins in a segment where gross margins are 30%, compared with 20% for ­supermarkets, according to AT Kearney.

Sept 10, 2007
Source: www.livemint.com

‘Empowering consumers with ready credit will fuel retail’

Empowering consumers with ready credit is how Mr Kishore Biyani, CEO of the Future Group, expects to build his retail business. On the last day of the India Retail Forum, Mr Biyani, elaborated on the future of retailing in the session on ‘Future Yet to Unfold’.

“The consumption boom will drive retail in India. We need to look at innovative ways of making money available to the consumer,” he said. With the intention of growing the consumer’s consumption basket, Mr Biyani recently launched Future Money, a consumer financing scheme, at his Big Bazaar stores. The Future Group also believes in giving loans to its employees to spend at its stores. Taking the model of countries such as Brazil and Mexico, where retailers have turned financers, Biyani expects to emulate the same model in India.

September 7, 2007
Source: Hindu Businessline

Retail will create 3.5 m jobs’

The Indian Retail Forum kick-started with Mr V. Vaidyanathan, Executive Director, ICICI Bank, stating that the growth in retail will create three-and-a-half million job opportunities.

The India Food Forum was launched at the IRF by Mr Subodh Kant Sahai, Minister for Food Processing Industries. Encouraging the small shopkeepers to participate in the retail growth, the Minister said, “The small shopkeepers must be involved in the supply chain management and made part of the ongoing retail boom.”

Betting on the aspirational middle class to drive growth in the retail sector, Mr Vinod Sawhny, President, Bharti Retail, said, “The competitive price and better quality goods coupled with the aspirational middle class lifestyle with enhanced shopping experience will drive modern retail.”

Held over a three-day period, IRF 2007 will see the participation of international speakers, exhibitors and delegates from across the industry.

September 5, 2007
Source: Hindu Businessline

Organised retail needs to involve small store owners’

The second day of the India Retail Forum debated the need for organised retail to go hand-in-hand with the traditional single store formats. Mr Suresh Prabhu, Shiv Sena MP and former Union Power Minister, said: “The success of organised retail cannot be judged by the bottomlines of the corporates. On a long-term basis you need to involve the masses and create a win-win situation for both parties.”

Talking about the consumption patterns emerging from the boom in modern retail, Ms Ireena Vittal, Principal, McKinsey & Co, said: “Credit today, cash tomorrow is going to be the mantra.” Adding to this, Mr Sumantra Banerjee, President & Chief Executive Officer, RPG Enterprises, said: “The pyramid shape of the consumers will change to diamond, with the lowest income group moving up to become the middle class consumers, who will constitute the maximum chunk of the buyers in the economy.”

Highlighting the challenges for the retail industry, most speakers pointed to the soaring real estate rates as an impediment to retail growth. “When I see the prices of Delhi and Mumbai, they are higher than even those in Manhattan. At this rate, while every retailer wants a piece of the land pie in the city, what will happen is that there will be super congestion and growth without profit or margins,” said Mr Banerjee.

Mr R. Subramanian, Managing Director, Subhiksha Retail, said, “In our business, there are two fundamental costs – people and property. Since retail is always going to be a low-margin business, we need to work our way towards it and yet derive a way of getting quick returns.”

“As a means to cut costs, most of us in the industry are driving growth, setting up more stores,” said Mr Sanjay Jog, Future Group HR, adding that single store profitability should also be given importance.

September 6, 2007
Source: Hindu Businessline

Retailers continue to obtain produce from APMC markets

The Agricultural Produce Marketing Committee Act has been amended in many States to allow retailers to buy directly from the farmers, yet many retailers are procuring fruits and vegetables from the APMC markets.

Shoppers’ Stop has one Hypercity and three ExpressCity convenience stores and will increase the Hypercity format stores to 20 by 2011. According to B.S. Nagesh, Managing Director, they are procuring directly from the APMC yards and not going to the farmers. They are likely to follow this model even in future.

Food Bazaar of Pantaloon Retail India Ltd has a presence in more than 40 towns and cities. They are procuring some of the vegetables and fruits from the farmers where the facilities are available, but mostly from the APMC.

Ms Ireena Vittal, Principal of McKinsey & Co said, “Where is the scale for the retailers to procure from the farmers? Today, it is more profitable to buy from the mandis than from the farmers.” The retailers had rallied for the amendment of the Act so it could benefit the farmer and the retailer alike, eliminating the middlemen, the APMC markets.

Mr Sanjay Gupta, Vice-President, Business Development of Spencer’s Retail Ltd of the RPG Group, said he was certain they were procuring from the farmers directly, but did not have the details with him.

The APMC Act was amended a few years ago to enable the farmers to be part of the sellers’ market and not have to auction their produce in the mandis where they are getting an unfair price, said a commodity analyst. The traders of the APMC markets have been fighting against the amendment of the Act, which 15 States have already undertaken and many others are in the process of doing.

At present, Reliance is one of the few companies buying directly from the farmers. Mr David Herridge, Director, Supply Chain Solutions of Singapore, helps Reliance with its back-end logistics and said, “Small unorganised retailers will have to consolidate, like in other countries, since Reliance is already getting where Wal-Mart is in back-end management. If they don’t they will be crushed.”

September 6, 2007
Source: Hindu Businessline

Big Players – plans and investments

Reliance Retail bets on exclusivity

Apart from stitching garments for a number of retailers, Delhi-based Vibe Fashion Apparel is busy executing huge exclusive orders for the retail behemoth Reliance Retail.

Vibe is among several textile companies, including Arvind Mills, Celebrity Fashions Ltd, Indus League Clothing Ltd and many more, that have entered into a unique arrangement with the retail giant. All these textile companies are developing exclusive brands only for Reliance. So while private labels will continue to drive growth, the focus will also be on exclusive labels.

Indian Terrain has developed Spirit for Reliance and Indigo Nation has come up with an exclusive brand under Contra. Similarly, Arvind Mills is developing Hero under Wrangler, Vibe has developed Cyber Gear. Blackberry has developed Buzz. At present, the company is also talking to watch makers and FMCG companies for such exclusive tie-ups. The share of private labels is expected to be around 35-40% with local brands forming around 10-15% and exclusive brands around 5-10%.

KSA Technopak associate director says, “The retailers have definite understanding of customer preferences both in terms of product type and prices. The retailer can share his understanding with manufacturer who can develop exclusive brands. The customer too will feel that he is being offered exclusive brands.”

September 11, 2007
Source: Economic Times

HomeTown to open 6 new stores by December

Home Solutions Retail (India) Ltd, an arm of Future Group, will open six new ‘HomeTown’ stores in the country by December 2007.

“We now have three stores and are looking at an annualised business of Rs 3,000 crore by the end of next financial year,” Mr Mahesh Shah, Chief Executive Officer, HomeTown, told reporters after opening the stores here on Friday. About Rs 20 crore would be invested in setting up each store, he said.

HomeTown stores would soon be opened in Bangalore, Pune, Lucknow, Gurgaon, Kolkata and Thane, he said. To increase institutional sales the firm was in talks with various real estate companies in different places.

HomeTown stores would be offering consumer loans for customers in association with its recently floated sister concern, FutureMoney. As an invitation offer HomeTown customers would be given zero per cent interest finance. The consumer loans would be processed in 48 hours from the time of application.

September 10, 2007
Source: Hindu Businessline

Wadhawans plan Rs 1,500 cr investment in Spinach

The Wadhawan group's retail arm Wadhawan Food Retail is planning to invest Rs 1,200- 1,500 crore over the next three years for its Spinach chain of stores, a top company official said.

"We are likely to invest Rs 1,200-1,500-crore towards expanding our Spinach chain. We want to establish around 1,500 stores in 93 cities during this period," Spinach Chief Executive Officer Dippankar S Halder said. At present, there are 94 Spinach stores pan-India. By March 2008, the group plans to add another 250 stores at an investment of around Rs 300-400 crore.

The company would have the same three existing formats for the stores -- Spinach Super, Spinach Local and Spinach Express. Spinach Super would be of 5,000-7,500 sq ft in size while Local would be around 2,500-3,500 sq ft. The size of Spinach Express stores would be of around 12,000-15,000 sq ft.

The company's major thrust will be mainly on Tier I and II cities, with a primary focus on the food and groceries business, although they are also exploring other possibilities.

The company has recently acquired four companies -- Sangam, Maratha Stores, Sab Ka Bazaar and S-Mart and is scouting for more acquisitions.

September 10, 2007
Source: Economic Times

Reliance Retail plans foray into jewellery

Mukesh Ambani-promoted Reliance Retail is planning to aggressively foray into jewellery retailing segment in a big way.

Confirming the new development, Bijou Kurien, president & chief executive - lifestyle, Reliance Retail told FE, "We are planning to set up about 400 to 500 jewellery retail outlets across the country, beginning with major metroes. For the purpose, we are in talks with gems and jewellery manufacturers and exporters in order to enter into tie-ups with them for sourcing designer jewellery from them in sync with the trend in the national and international market. But, we will not enter into manufacturing jewellery."

However, Kurien refused to divulge details about the gems and jewellery majors whom they would be tying up with. When contacted, Mehul Choksi, chairman, Gitanjali Group said, "Yes, we are in talks with Reliance Retail and we are planning to design a special jewellery collection for Reliance Retail as they have shown interest in sourcing jewellery from us for their exclusive jewellery retail oulets.

September 9, 2007
Source: Financial Express via Moneycontrol

Subhiksha to set up Mandis

Discount retailer Subhiksha is setting up a new chain of stores called Subhiksha Mandi, which will offer fruit and vegetables.

Subhiksha runs 870 retail stores in three formats. It has 120 outlets in Mumbai and its suburbs. The company had recently introduced two new models — Subhiksha Mobile and Subhiksha Pharmacy. For the fruit and vegetables venture, Subhiksha will tie up with APMC consolidators and pay a licence fee to APMC to use sourcing facilities.

Subhiksha Trading Services CEO R Subramanian said: "We have begun with 12 stores in New Delhi and will move on to Pune. Mumbai is not on the agenda as yet." The stores will be smaller in size (600 sq ft) compared to its competitors in the food retailing space.

Mr Subramanian said the company would require better infrastructure such as cold storage. He added that the stores won’t be as bare on amenities as the Subhiksha stores. For sourcing, Subhiksha will work closely with APMC consolidators since the company still doe not have an APMC licence to procure directly from farmers.

September 6, 2007
Source: Economic Times

RIL may shift food stores in UP to malls

Following the Mayawati government's decision to bar standalone retail outlets of large players in Uttar Pradesh, Reliance Retail is planning to shift its Reliance Fresh food & grocery stores to malls. The company is in talks with mall developers for leasing significant amounts of space as an anchor tenant.

Reliance Retail is in advanced talks with Delhi-based real estate firm Ansal API for leasing out space in its malls in Lucknow, Allahabad and Kanpur. The company has signed up as the anchor tenant for Greater Noida’s Ansal Plaza.

Shifting into a mall is the only way organised food & grocery retailers such as Reliance Fresh can operate in Uttar Pradesh. A couple of weeks ago, the state government banned standalone food & grocery retail outlets, citing law and order as the reason. Following this, two major chains, Reliance and Spencer’s, had to shut their shops in Lucknow and Varanasi.

Subsequently, the state government constituted a five-member committee, headed by state Cabinet secretary Shashank Shekhar Singh, to study the impact of corporate retail on neighbourhood kirana stores. It is understood the committee is working on various models so the interests of all stakeholders are taken into consideration.

September 5, 2007
Source: Economic Times

Unique Formats

Nature's Essence banks on direct selling, personal reach

When everybody is jumping onto the retail bandwagon, Delhi-based Nature's Essence, makers of personal care products, hopes to take on the biggies through what it believes is its strength - direct selling and personal reach.

It looks to cash in on the "beauty wave" that is spreading across the country, thanks to the mushrooming of salons in every nook and corner.

The 10-year-old company sells its range of value-for-money aromatherapy and herbal products, and other cosmetics for skin, hair and body care through 600 distributors, across 10,000 salons and an equal number of retail outlets (both kirana and organised stores). Around 60 per cent of Nature Essence's revenue (Rs 30 crore) comes from salons, the company's biggest catchment area.

September 5, 2007
Source: Hindu Businessline

Support industries

Foreign support firms ride on Indian retail saga

That foreign construction giants sniff an opportunity in the Indian realty sector and are landing here in droves doesn’t make news. What has been an interesting development, of late, is that big-time global retail design, paraphernalia and know-how providers are looking to lend the very-crucial skeletal support system to the Indian retail saga.

The size of the Indian retail industry is colossal. The sector is expected to generate four and half million jobs. No wonder, overseas know-how providers see an ocean of opportunity.

“Investors in India are looking at newer ideas to stand out. They are looking at architectural marvels and also international concepts. Mall builders are looking at vertical designs and we are getting a lot of queries from India,” says Angela Kreutz from Blocher Blocher Partners. This German firm specialises in architecture and interior design for malls and multiplexes. The company has developed stores in Delhi and Ahmedabad and quite a few are in stages of approval at various places in India.

Not only multiplex. Amusement park concept is also being lapped up by Indian developers. Shuhaib Abdul Rahman from Amusement Services International LLC, a Dubai-based firm, says that trends have undergone a phenomenal change within three-years flat.

Take the case of Nisyst, a Bolton (UK)-based firm famous for providing software solution for retail system development. They have opened a full-fledged office in Mumbai seeing country’s buoyant growth graph.

Similarly architecture and design firm Lewis and Hickey (L&H), a London based organisation, thinks that the time is right to bring “UK designs to India” as now there are many takers. The firm has worked extensively in the UK, Europe and west Asia and now eyes the Indian retail pie.

Firms like Manchester-based Photolink Creative have gone a step ahead. David Walter avers that with the coming in of malls and retail outlets, there would grow the need of home shopping as well since the distance between a big retail outlet and a customer may be an impediment. “So we have got down to compilation of home shopping catalogues. “I know it is like jumping the gun today but e-retailing will soon be a reality. Hyper-market e-retailing is a big thing in the UK these days. Mark my words. It will be in India with next two years or so,” Walter prophesizes. He is designing home shopping catalogs for big-time Indian retail firms and is hopeful of finding customers.

Then there are footfall imaging contour providers like Northam-pton based Irisys. The firm develops and manufactures a range of detection products for people counting and monitoring for application in retail. It is keen on lending a technical know how to malls in India.

The list is long. So what if regulatory approvals take a lot of time to come about in India? Hardly matters, if there are differences between the state and central government on retail issues. No big deal if the country has the worst infrastructure. Foreign players are willing to take their chances. As we said the Indian retail juggernaut has just started to move for them.

September 7, 2007
Source: The Tribune

New Zealand firms keen on selling retail tech to India

Betting big on retail boom in India, New Zealand companies are keen to sell retail technology to Indian firms.

“We have already provided cold chain technology for big names in Indian retail such as Reliance and Bharti. Currently, at least eight of our companies are holding talks with their Indian counterparts for selling technology,” Mr Paul Vaughan, Trade Commissioner (South Asia), New Zealand, told Business Line on the sidelines of a New Zealand Education Fair here on Thursday.

September 7, 2007
Source: Hindu Businessline

French trolley co to set up local unit

The $150-million Strasbourg-based Caddie SA will float a 50:50 joint venture with Retail Detailz (India) Pvt Ltd to manufacture shopping trolleys and carts for the Indian retail industry. A new manufacturing plant is being set in Shahapur on the Mumbai-Nasik highway for the same.

Caddie SA has two facilities in France and one each in China and Portugal, with licensees in Australia and Malaysia. The company has the capacity to manufacture six million trolleys worldwide and it will manufacture two lakh trolleys for India. The steel and metal components and the other raw material required for manufacturing trolleys would be sourced from India.

September 5, 2007
Source: Hindu Businessline

Apparel & Footwear

Park Avenue launches brand for women

Park Avenue, the men’s wear brand of Raymond, on Saturday launched a range of business wear for women. Branded ‘Park Avenue Woman’, the range is targeted at the “working woman professional.”

“We expect a revenue of Rs 100-150 crore in the next two years from this brand,” said Mr Gautam Hari Singhania, Chairman and Managing Director, Raymond Ltd. Park Avenue Woman will be retailed through an exclusive store each in Delhi, Bangalore and Mumbai over the next one year. Raymond will be investing around Rs 50 lakh in each store.

“The women’s western wear market in India is estimated at Rs 2,700 crore. The brand expects to capture around 15 per cent of the premium western formal wear market, which is growing at over 20 per cent annually,” added Mr Singhania.

The price range for these clothes is Rs 700 to Rs 5,500.

September 10, 2007
Source: Hindu Businessline

Aarvee to launch 15 premium brand retail outlets

Aarvee Denims and Exports Ltd is speeding up the opening of 15 premium brand retail outlets in four states ahead of the Diwali festival season. The company hopes that Diwali sales in Gujarat, Rajasthan, Madhya Pradesh and Maharashtra will spur a turnaround by reversing dropping sales. Of the 15 outlets, six will be in Ahmedabad, Vadodara, Surat and Rajkot.

Aarvee Denims and Exports Ltd (ADEL), the second largest denim maker in India after Arvind Mills, has been hit hard by a recession in the denim industry, caused by oversupply and competition from Chinese and Turkish products. Both domestic sales and exports have fallen.

To counter the situation, the company has undertaken major expansion and diversification into non-denim products and garmenting to reduce the cyclical pressures of the industry. An element in the strategy is to launch premium brand retail outlets. It plans to open 300 retail outlets across the country.

September 7, 2007
Source: Economic Times

Regional News

India : HomeTown to revolutionize way Hyderabadis shop for their homes

Home Solutions Retail (India) Ltd a part of the Future Group, announced the launch of ‘HomeTown’, India’s most comprehensive home making/ home improvement store, at Punjagutta, Hyderabad.

Spread over an area of about 1,83,000 sq.ft. (built up), HomeTown will provide consumers with all that goes into building a house and everything to make it a ‘Home’.

HomeTown offers consumers largest choice and variety under one roof and a specialized team of experts to set it all up for them at their homes. In addition to retailing home improvement products, HomeTown will also provide services like electrical, plumbing, interior decoration, painting, etc. HomeTown will also have counters by Future Money, where consumers can avail of fast & easy finance on their purchases at HomeTown.

September 10, 2007
Source: www.fibre2fashion.com

Chennai retail mall space set to multiply six times by 2010’

Retail real estate market is all set to gather momentum in Chennai, with mall space projected to multiply six times by 2010, when a total of six million sq ft of retail mall stock comes up.

“The Chennai retail real estate market boom, though started slow compared with other tier-1 cities, is now gaining momentum. Backed by the rising young local and migrant working population, increasing income levels and rising aspirations, the retail market in Chennai is set to grow rapidly in the next 2-3 years,” according to Jones Lang LaSalle, a real estate services and money management firm.

Pegging the current mall space in the city at about 9,09,000 sq ft of built-up area, it said that the projects being developed by national developers such as DLF and Prestige Group and local developers such as Suryavardhan Estates and Marg Construction would boost the retail built-up area to about six million sq ft of space by 2010. This takes into account 15 malls, which are either proposed or under construction.

The current total mall space in Chennai includes the Spencer Plaza with a built-up space of 5,59,000 sq ft and Chennai City Centre with a built up area of 3,50,000 sq ft, both located in Central Business District.

Around 50 per cent of total upcoming mall stock in Chennai would be developed in Old Mahabalipuram Road, in the Southern quadrant of the city, which is also known as the IT corridor.

September 7, 2007
Source: Hindu Businessline

Reliance opens retail stores in Jamshedpur

Reliance Retail Ltd (RRL), a subsidiary of the country's biggest firm by market value Reliance Industries, on Friday opened four outlets in the city. The outlets received a huge public response as all the four did good business with nearly 3,000 customers visiting each outlet, a company spokesman claimed.

The day did not witness any protest, police said, adding the 'Khudra Vyapar Sahrojgar Bachao Morcha', a front of retailers and vendors here, staged a demonstration in front of the district administration demanding a ban on the Reliance Fresh outlets in Jamshedpur yesterday.

Reliance has eight outlets in the state capital Ranchi and three in Dhanbad.

September 7, 2007
Source: Economic Times

TN traders’ union to meet CM on big retail issue

Tamil Nadu Traders’ Federation (TTF), seeking a ban on the entry of corporates in retail trade, has decided to meet the Tamil Nadu Chief Minister, Mr M. Karunanidhi, to impress on the need to emulate the Uttar Pradesh Government’s ban in the interest of small traders.

According to Mr V.E. Govindarajulu, State Secretary, it has learnt that Reliance Fresh of Reliance group is about to launch its retail outlets for vegetables and fruits in different parts in Tiruchi town.

Speaking at Tiruchi recently, he said that the move would eventually lead to erosion of hold on farmers by traders.

As the law does not provide for fixing the maximum retail price for vegetables, no action could be contemplated under the Monopoly And Restrictive Practices Act. The only hope would be for the State to emulate the ban imposed by the Uttar Pradesh Government on the company, he added.

September 7, 2007
Source: Hindu Businessline

International

Seven-Eleven Japan looks for entry point

Japanese convenience store chain Seven-Eleven Japan (SEJ) is exploring entry options in India through the franchisee route. It is learnt that it is in talks with a prominent real estate group to enter the country.

The SEJ is already in touch with an international consultancy’s India arm for a due diligence of the Indian retail market. The only other model in which SEJ can open shops in India is under the single-brand route. If it comes under this model, the retailer will only be allowed to sell its goods through a single private label. The Tokyo-based SEJ is the largest convenience store chain in the country.

Seven-Eleven Japan is not the only east Asian retailer that is looking for its share of the Indian retail pie. The Korean supermarket chain Lottemart, which gave Wal-Mart a run for its money in the Korean retail market, is also learnt to be close to striking a franchise deal for India.

September 8, 2007
Source: Economic Times

Lifestyle & Luxury Retailing

Dabur’s H&B Stores to offer beauty related services

Dabur India is planning to introduce beauty and health services as part of its retail operations. With intentions of emulating the services offered by Marico’s Kaya Skin Clinics, the company’s H&B Stores would be offering beauty related services on a similar concept.

Peter Baker, Chief Executive Officer, H&B Stores, told Business Line, “We would be offering beauty related services much on the lines of what Kaya Skin Clinics presently have. There would be services such as whitening and facials along with the regular manicures and pedicures. However, these services will not be at a premium since we are a value for money brand. The purpose is to make these services affordable to consumers in the smaller cities as we expand.”

Dabur India is expected to have a separate brand to represent its services in the future.

Besides, the retail stores would also be doling out pharmacy services based on its ayurvedic portfolio of products. With intentions of having speciality stores in the area of health, beauty and wellness, Dabur expects to differentiate its H&B stores by offering services to go with it. Hiring specialists to deliver these services is now on the agenda for Dabur.

With plans of launching between four and six stores during the course of this year in Delhi and the NCR region, the company expects to start its operations in the North before it has pan-India presence with 40 stores lined up for 2008-09.

Building the H&B stores with three different sizes (6,000 sq ft, 3,000 sq ft and 1,500 sq ft), Dabur claims the product range would have a preference towards Dabur’s own portfolio.

Having invested Rs 140 crore already into its retailing business, H&B Stores Ltd, currently a subsidiary of Dabur India, expects to break even by 2010.

September 11, 2007
Source: Sify Walletwatch

Louis Vuitton wants a feel of Indian luxury

Louis Vuitton Moët Hennessy (LVMH), a luxury goods giant, is expected to roll out half a dozen luxury brands in India to keep up with an increasing demand from elite consumers in the country.

Among the high-profile brands that will touch the Indian shores over the next one year include Kenzo (fashion accessories), Marc Jacobs, (apparel and accessories), Berluti (shoes), haute couture brands Givenchy, Loewe, Celine and Pucci among others.

Ravi Thakran, group president, South Asia, told Business Standard, “The Indian consumers are ready for luxury and are looking beyond watches, ties and shoes for indulgence. India is the most sophisticated market in Asia and therefore, is also difficult to conquer.”

According to a recent Bloomberg report, consumption for luxury goods is increasing by leaps and bounds in the Asia-Pacific region that also includes India.

While expanding its product portfolio, LVMH also plans to expand its watches and jewellery offerings by launching Fendi and Zenith by the next year. Currently, the division operates through TAG Heuer, the luxury sports watch brand and Swiss time piece Dior. LVMH is exploring the foreign direct investment option or the franchisee route for the new entrants.

LVMH is also set to introduce Sephora, its beauty and cosmetics business, in India. The company has booked properties in Delhi, Bangalore and Mumbai, and will be launching five stores over a period of one year. Sephora is an interactive luxury beauty care concept that offers a range of skincare, make-up and fragrance products.

September 7, 2007
Source: Business Standard

Shahnaz Husain salon opens in Chennai

The Shahnaz Husain Group has set up its first signature salon in Chennai. It will offer specialised ayurvedic treatments for skin, hair and body, according to a press release. This is the group’s fourth salon in the country after Dehradun Jammu, and Varanasi.

September 7, 2007
Source: Hindu Businessline

Bose Condo unveiled in Kolkata

Bose Corporation India Pvt Ltd, the Indian arm of global audio systems and products major Bose Corporation, today unveiled the first of its kind Bose Condo here in Kolkata. It enables a person to hold his entire music collection in a single repository.

The experimental marketing initiative is expected to take the company’s retail venture to a new level, according to Mr Ratish Pandey, GM, Bose Corpn India Pvt Ltd.

Addressing newspersons here, Mr Pandey said a national rollout of the Bose Condo retail venture initiative would depend upon feedback and the response that is received from customers. A national rollout of the Bose Condo retail venture initiative would be on a company-owned-company-operated basis.

September 6, 2007
Source: Hindu Businessline

Government Policy

Big Retail may've to fund mom & pops

The Left parties have mooted a solution where both big retail chains and mom-and-pop stores can co-exist. The government is considering the Left’s proposal for levying a cess on big retailers to provide cheaper credit to small retailers. The proposed model of retail development would be offered to the states for adoption, depending on individual states’ policy preference.

“One of the suggestions is to levy a cess on every products sold at big retail stores and the fund should be used for giving cheaper credit to small retailers for working capital,” a government official said. Cheaper credit to unorganised retail has been of prime concern before the government as well as the anti-organised retail lobby for inclusive growth.

A department of industrial policy & promotion (Dipp) official confirmed the move. “We are working out the modalities. States will be consulted as they are the implementing agencies,” he said.

While the Centre can only recommend a model, it would be entirely the prerogative of the state governments to decide on the cess amount.

September 11, 2007
Source: Economic Times

Global retail firms peeved with FDI cap: PwC

India’s buoyant growth had attracted international attention, but multinationals wanting to enter the retail sector were “frustrated” by local laws, which limit the ownership of foreign companies to 51 per cent, a leading accounting firm said here today.

In a report for the World Economic Forum (WEF) here, PricewaterhouseCoopers has pointed out that many of India’s successes have taken place in urban hotspots while the rural areas have lagged behind. The country faces constraints, many of which multinationals were just beginning to experience first hand, it said.

September 7, 2007
Source: Hindu Businessline