Retail News January 2008

Big players – Plans and Investments: Reliance Retail and Bata, Mahindra & Mahindra to enter lifestyleBharti keen on acquiring Big Apple, Spencer’s looks, Megamart to focus, Home Solutions, Trent to launch, Indiabulls acquires Piramyd

General Trends & Information: Retail FDI likely to be permitted, India’s retail sector, Common entrance test, Increasing rental rates, Govt. to set up designers, India’s largest mall, Kirana stores will survive, Discount retail

International: Starbucks ties up, Amway to focus, Calvin Klein plans, Gautier and Ebony, Reliance looks to build, Gloria Jean’s to open, Liz Claiborne looks

Regional Trends: Reliance Digital opens, Spencer’s upbeat on Kerala

Apparel & Footwear: Apparel brands gear up, Apparel companies focus

Pharma Retail: Small pharmaceutical retailers team up to compete with large chains

Lifestyle & Luxury Retailing: Wadhawan enters lifestyle, Home Décor stores, Rajesh Exports to launch 9 jewelry

e-Commerce: E-commerce in India, Focus on existing online, SpiceJet plans joint venture

Government Policy: UP Chief Minister says she is not against corporate retail, FDI in retail

Big players – Plans and Investments

Reliance Retail and Bata form alliance

Reliance Retail will be giving a boost to its footwear division with its tie up with Bata, where it will retail its private label footwear. The tie-up will ensure that Reliance will have access to Bata’s 1,200 stores, located across the country. In return, Bata will get an exclusive display area in Reliance Footprint stores.

Reliance Retail will retail eight private labels for footwear at the Bata stores, including labels such as Mancini for men, Viviana for women, Pitter Patter for children, Monza for sportswear and Tosca for women’s party footwear. The Reliance Footprint brand was launched in November, with a store in Bangalore. The company hopes to have 100 stores in the next three years and is targeting a turnover of Rs. 3,000 crore during this period.

Date: Monday, December 31, 2007
Source: The Economic Times

Mahindra & Mahindra to enter lifestyle segment

One of the country’s largest corporations, the $4.5 billion worth M&M will be entering the lifestyle retail segment. The company has reportedly already selected key personnel, including a senior official from the Al Futtaim group of Dubai, and has set up its retail division, which is to be based in Bangalore. M&M is specifically targeting the urban customer for its foray.

M&M’s subsidiary, Mahindra Intertrade, which has been selling kids toys like LEGOs, will be handling the retail endeavors of the company. The company will be focusing on the premier segment of the market with products such as antiques, high-end apparel, home décor, toys, jewelry, home entertainment and health and wellness products. The urban lifestyle segment is considered a safe segment as it is unlikely to ruffle too many feathers and the margins are good.

Date: Wednesday, December 26, 2007
Source: The Economic Times

Bharti keen on acquiring Big Apple supermarket chain

Bharti Enterprises might be acquiring Delhi based Big Apple, a supermarket chain with 65 stores. The talks between Bharti and Big Apple are said to be at an advanced stage and if price expectations match, a deal could be finalized by January 2008. Bharti is looking to the acquisition as it plans to have 100 stores operational by the end of the financial year.

The company will be starting its retail business with its first store in North India, while its cash-and-carry business format with Wal-Mart will get started in the third quarter of next year. Lalwani Holdings and the Chaurasia Group own the Big Apple retail chain.

Date: Monday, December 24, 2007
Source: The Economic Times

Spencer’s looks to focus on specialty formats

RPG Group’s hypermarket division Spencer’s Retail recently did a soft launch for consumer electronic items and will also be branching out to launch specialty formats for home solutions and apparel. The company is already developing its merchandise lines for these categories and has also tied up with apparel brands such as Lee, Levis and Peter England, besides creating its own private labels.

The expansion is likely to be formalized in the next six months and will take and investment of Rs. 3,000 crore spread over the next three years. According to Samar S Sheikhawat, vice-president of Spencer’s Retail, “We have already initiated market research for a possible foray into the standalone home solutions and apparel stores. Several issues, such as the brand name, are yet to be decided.”

Spencer’s currently runs four formats, Spencer’s Hyper, Spencer’s Super, Spencer’s Daily and Spencer’s Express and its consumer durable stores are called Spencer’s Electronic. There are two Spencer’s Electronic stores at present, in Hyderabad and Pune. The company hopes to have 15-20 additional stores in the next year.

Date: Monday, December 24, 2007
Source: The Economic Times

Megamart to focus on tier II cities in south India

Arvind Brands retail division, Megamart is planning to focus on tier II cities in southern India and will be investing Rs. 400 crore in the next year towards this expansion. With Arvind Brands home base as Bangalore, the southern regions of India are the biggest markets for the company and it plans to capitalize on its knowledge of the region by opening stores in Mysore, Mangalore, Guntur, Vijaywada, Salem, Vishakapatnam, Pondicherry and other locations in India’s four southern states.

According to K E Venkatachalapathy, Business Head for Megamart, “Most of the apparel brands of Arvind Brands are doing extremely well in these secondary and tertiary cities. There is a huge demand for some of the premium brands like Arrow. We expect significant sales in these cities.” At present, Megamart has 75 outlets in 25 cities, with most stores averaging around 3,000-5,000 sq ft in space.

In terms of sales, its store in Bangalore has been the largest contributor. Besides Arvind Brands, several private labels and international brands are sold at Megamart outlets. Its future plans include setting up 30 large format stores under the name Megamart Outlet Centre and increasing its smaller format Megamart stores to 250 in the next few years.

Date: Friday, December 21, 2007
Source: Business Standard

Home Solutions to increase stores

Future Group’s Home Solution Retail Ltd (HSRL) announced its decision to increase both its consumer durable and electronic stores. Its lifestyle based eZone stores will increase from 26 to 75-100 in the next 2 years. Its value based electronics and consumer durables store; Electronics Bazaar will increase its stores to 200-250 in the next 2 years. The company will be investing around Rs. 450-500 crore for expanding both its chains.

According to Hemchandra Javeri, CEO of Home Solutions Retail, “We understand that due to the booming economy and rising disposable incomes among Indian consumers, there is a noticeable rise in consumer spend in consumer durables and electronics category. We will be better positioned to meet this increased demand, through planned expansion.”

Date: Friday, December 21, 2007
Source: The Economic Times

Trent to launch value format stores

The retail division of the Tata Group, Trent will be launching a value based retail chain this year, in an effort to broaden its consumer base. The first of these value based retail stores will be launched in the next six months and will stock mostly private label garments for men, women and children. The new brand of stores is yet to be named by the company.

Trent has found locations for some of its stores already, with its first store coming up in Mumbai. Overall, these stores will be located in 50 cities, and will on average by between 10,000-15,000 sq ft in range. These stores will compete directly with Arvind Brands’ Megamart format and Future Group’s Brand Factory format.

Date: Friday, December 21, 2007
Source: The Economic Times

Trent to double stores by 2010

Trent announced that it will be doubling its stores to 100 by March 2010.The company currently has several formats, including Westside, its lifestyle format, Landmark, its books, music and gifts format, Croma its consumer durable format and Star Bazaar its hypermarket format. The company will also be launching a new value based lifestyle format in the coming months. The focus of its expansion will be in southern and western India.

At present, there are 29 Westside stores, 10 Landmark stores and 3 Star Bazaar hypermarkets in the country. According to a Trent official, "We intend to take that up to 60-odd Westside stores, 25 Landmark stores and 15-20 Star Bazaar outlets by March 2010. We will have at least 100 stores, all three brands put together, by March 2010". He added that the company was also considering opening multi-retail outlets such as Central or Shoppers’ Stop and also is thinking of entering the fast-food retail segment.

Date: Thursday, December 20, 2007
Source: The Economic Times

Reliance Retail to shift to being supplier

After facing strident protests for its grocery format stores, Reliance Retail is turning itself into a trader and is entering the food trading business in an effort to restructure its food and grocery business. The company has created 2 supply chains; one chain to trade commodities in the open market at mandis and a second chain to supply merchandise to Reliance Fresh outlets.

With food prices to increase significantly next year, Reliance has realized the value of becoming a trader. The company is already setting up shop in mandis where it will sell fruits, vegetables and other staples, where it will be able to make a profit without the steep overheads or discounts. The company has reportedly signed an agreement to supply fruits and vegetables to the Spencers’ retail chain.

This new initiative of Reliance is likely to be named either Apni Dukan or Apni Mandi. According to the plan, there will be distribution and supply chain centers set up in hundreds of towns as well as mandis across the country. The likely investment for this project is reportedly more than Rs. 10,000 crore.

Date: Thursday, December 20, 2007
Source: The Economic Times

Reliance Brands to focus on brand acquisitions

Reliance Retail’s subsidiary, Reliance Brands will be focusing on creating brand partnerships to stand out in the highly competitive branded apparel segment in the country. The company will also be open to buying equity stakes in existing brands or designer labels. Reliance Retail recently formed a separate company for its brands and it is headed by Darshan Mehta, who feels that the company’s best alternative is to form partnerships with international brands.

He added that, “The Indian apparel space has certain entrepreneur-driven brands and designer labels with great concepts. They have the potential of having a pan-India presence, if marketed and managed on a wider scale.” Reliance is reportedly in talks with several Indian fashion designers to form equity partnerships for designer apparel.

On the international front, the company has tied up with Miss Sixty, Energie, Killah and Murphy & Nye for their operations in India. Maurizio Perich, commercial director for foreign markets for Miss Sixty, said that it was the lack of information on how to manage brands in the Indian market that led them to tie up with an Indian company. Reliance will be opening Murphy & Nye stores in Delhi and Mumbai and will be opening 40-50 denim-based stores for Miss Sixty in the top 10 cities of the country, over the next three years.

Date: Thursday, December 20, 2007
Source: Business Standard

Home Retail to pump in Rs. 500 crore for eZone and Electronic Bazaar

Future Group’s Home Solutions Retail Ltd (HSRL) announced that it will be pumping in Rs. 500 crore for its consumer durables and electronics retail segment over the next two years. The company will be expanding its eZone outlets to 100 stores from the current 26, and will be expanding value based Electronic Bazaar from 65 to 200 in the same time frame.

According to Hemchandra Javeri, chief executive officer of HSRL, both segments are expected to bring in a revenue of Rs. 800 crore by 2007-08 and Rs. 3,000 crore by 2009-10. Adding that, “By expanding both the value and premium formats, we want to explore the total opportunity. We want to dominate big cities and tier-II towns and stay ahead of competition.”

The consumer durable market is worth around Rs. 25,000 crore and is dominated by region specific retailers such as Vivek’s in the south and Vijay Sales in Mumbai. Newer entrants such as Tata’s Croma, Videocon’s Next and Reliance Digital hope to capitalize on the dearth of nationwide consumer durable retailers.

Date: Tuesday, December 18, 2007
Source: Business Standard

Reliance Retail launches its books and music format

Reliance Retail Ltd. launched its newest specialty store called Reliance TimeOut, which will stock books, music, stationary, toys and gift items. The stores will have over 30,000 titles in books alone from both national and international publishers, and over 12,000 titles in its music collection. The new store is located on Cunningham Road in Bangalore and is spread over 21,000 sq ft of space and carries a stock of over 56,000 items.

According to Bijou Kurien, President and Chief Executive of the Lifestyle vertical at Reliance, “With all the pressures, stress and workload at office, home and school, we need a place where we can unwind and relax, browse, buy a book, sample some music, choose a gift or buy a toy. At Reliance TimeOut, we offer a comprehensive range of products in these categories.”

Date: Tuesday, December 11, 2007
Source: Business Standard

Reliance restructures retail business

Reliance Retail is undergoing yet another restructuring of its retail divisions, which will now be 32 and is even likely to go in for an IPO for its retail business, if sources are to be believed. Reliance Retail will have 32 verticals or independent business centers in its first phase of investment of over $6 billion by 2010-11, and an expected turnover of $25 billion by 2010. Sources report that the company will go in for an IPO sometime next year.

There will be an estimated 30 verticals that will run under separate management by independent CEOs, under the Reliance Retail board. At present, there are 8 verticals, such as hypermart, fresh fruits and vegetables, jewelry, consumer electronics etc. Its books vertical will be opening in the NCR area shortly.

Date: Monday, December 10, 2007
Source: Business Standard

Bharti Retail to launch stores by March 2008

Bharti Retail announced that it would launch its store operations by March 2008, with its first small format store in North India, and will launch its cash-and-carry business with Wal-Mart by the third quarter of the year. According to Rajan Bharti Mittal, MD of parent company Bharti Enterprises, "We will open our first store in March next year up North which will be a small format store. Other formats will also be opened to take care of consumers' demand in other areas."

While the name of the retail venture had been finalized, it has not been announced to the public as yet. Bharti has however been hiring retail professionals already and aims to have 16,000 people employed in its retail business by 2012.

Date: Monday, December 10, 2007
Source: The Economic Times

Indiabulls acquires Piramyd Retail

Indiabulls Wholesale Services acquired Piramyd Retail and now has 63.92% of stake in the company that is estimated to be worth Rs. 208 crore. An open offer will be made to acquire another 20% of the company at Rs. 74.73 per share. Indiabulls Wholesale Services is the retail arm of Indiabulls Real Estate. Piramyd Retail has 35 retail stores and seven department stores currently.

Piramyd’s lifestyle retail chain Piramyd Megastore and its neighborhood grocery stores called Trumart are located in several states such as Maharashtra, Gujarat, Rajasthan, Delhi, Punjab and Madhya Pradesh. Indiabulls Wholesale is setting up 30 hypermarkets in many tier II towns with an investment of Rs. 1,500 crore, will be expanding Piramyd’s existing network of stores and will have more than 150 such stores by the end of 2008.

Date: Sunday, December 09, 2007
Source: Business Standard

General Trends & Information

Retail FDI likely to be permitted in three phases

The Indian government could be permitting FDI in retail in three phases. Sources report that the commerce and industry ministry has started discussions on permitting FDI in certain segments of the retail sector, such as consumer electronics and sports goods, in its first phase. These two fields being specifically looked at to be opened before the Commonwealth Games in New Delhi in 2010. The second phase will likely see the opening up of single-brand retail to 1000% from the current level of 51%.

The third phase of opening up FDI in retail in other segments will only take place depending on the impact of the earlier phases. Kamal Nath, the commerce and industry minister, had also stated that the government is keen to permit international retailers in specific sectors before the Commonwealth games begin, and feels that permitting foreign consumer goods retailers will not upset kirana store owners.

Date: Monday, December 31, 2007
Source: The Economic Times

India’s retail sector to reach $365 billion in 2008

The continued boom in the retail sector in India will lead it to reach $365 billion in 2008, compared to $300 billion on 2007. According to a study by the Associated Chambers of Commerce and Industry (ASSOCHAM), year-on-year growth will remain between 30-35% and is likely to reach $440 billion by 2010.

The major thrust of the retail industry has been due to the rapid expansion of organized retail formats, which now occupy 14 million sq ft, as compared to 1 million sq ft in 2002. In 2008, organized retailers are likely to add on another 2 million sq ft of space. While organized retail has focused on the major cities, on the other end of the spectrum, are rural retail stores which are also likely to experience strong growth, rising from $30 billion in 2007 to $36 billion by 2008 and $45 billion by 2015.

Date: Monday, December 31, 2007
Source: The Economic Times

Common entrance test for retail

The Retailers Association of India (RAI) is offering a Post Graduate Programme in Retail Management (PGPRM) with a tie up with 15 business schools in India. The Common Admission Retail Test (CART) will be held on January 27, 2008. Around 1,500 candidates will be selected for the course through CART.

According to Gibson Vedamani, CEO of RAI, “The objective of the PGPRM programme is to provide students with a high level of knowledge and understanding of the concepts and processes involved in retailing and equip them with operational and analytical skills necessary for a professional career in the retail sector.”

The CART test will be held in 25 cities and will test candidate’s quantitative ability, data interpretation, logical awareness, verbal and business skills, and consumer awareness.

Date: Friday, December 28, 2007
Source: Chennaionline.com

Increasing rental rates cut into retailers’ margins

Retailers are trying to come up with new strategies to compete with rising real estate rentals in the metros. Some of the ideas include being innovative with formats, going in for a revenue sharing model with mall developers and focusing on smaller towns where the real estate rates are still manageable.

Levi Strauss India has already announced that it will be changing its strategy and pulling out of malls in 2008, and will instead be increasing its stores in smaller towns. According to Shumone J Chatterjee, MD of Levi’s, “Profit margins are getting lower and we cannot wait for the next four to five years for things to stabilise. Passing on costs to the customer is also not an option. So we will exit places that are too expensive and increase our distribution network in small towns instead.”

Cushman & Wakefield have estimated that rentals in malls in the metros have increased by 25-45% in the past year. Currently, the rate for space in a mall varies from Rs. 550-1,000 per sq ft, depending on the size and location of the mall. Retailers are turning to expand in tier II cities to combat these skyrocketing prices.

Other retailers are becoming innovative with their formats, in an effort to increase margins. Arvind Mills has converted some of its single brand outlets to multi-brand outlets where it sells some of its higher-value items. According to Suresh J, CEO of Arvind Brands, “We had opened our largest Arrow showroom in Bangalore and found it was not profitable. So, we innovated with the product-offering and introduced a suits gallery, which has increased our sales. We will also be introducing other brands in some of our mono-brand outlets.”

Date: Friday, December 28, 2007
Source: The Economic Times

Govt. to set up designers’ streets to attract foreign tourists

The government will be setting up designers’ streets and arcades in many major cities, in the hope of attracting foreign tourists, especially Indians living abroad. According to Shilabhadra Banerjee, “We are considering setting up exclusive facilities for designers to promote special interest shopping among foreign tourists as there is increasing global recognition of Indian designers.” The government plans to promote local artists and craftsmen along with fashion designers.

ASSOCHAM estimates that India’s fashion design segment will reach Rs. 750 crore by 2012, from the current Rs. 270 crore. The significant rise is mainly due to huge investments coming into the sector. Despite its rapid growth, the sector barely accounts for 0.2% of the international fashion design market.

Date: Thursday, December 27, 2007
Source: The Economic Times

India’s largest mall on the anvil

The country’s largest mall, aptly named Mall of India, is being built in Gurgaon by DLF and is being built and will cover 4.5 million sq feet of space by 2010. The mall will also have 9,000 parking spots and will be connected to New Delhi by its own light rail network. The developers hope to attract the country’s emerging consumer class, which is addicted to spending as much as they possibly can.

According to Rajeev Talwar, group executive director of DLF, "India's growing prosperity - the large population of under 25-year-olds who have grown up in an economy that is booming - means that lifestyles and shopping habits are shifting in favour of malls." At present, the country has 90 malls covering over 19 million sq ft of space.

DLF is also building a premium mall called Emporio in New Delhi, which besides a variety of retail stores will also have 10,000 sq ft of space dedicated solely to watches, featuring some of the most expensive time pieces in the world.

Date: Monday, December 24, 2007
Source: Rediff.com

The rise of the private label

Private labels who were once completely unknown are fast gaining popularity and are now able to compete with known global brands. The range of private labels varies from apparel to health and beauty and furnishings and customers are most willing to test out new and unknown brands.

The rise of private labels can be attributed to retailers such as Pantaloon, Big Bazaar, Shoppers’ Stop and Vishal Megamart who were some of the first companies to put forward these brands. In-store brands account for about 5% of the total organized retail market, so the potential for growth is still enormous.

Margins on private label products range from 15-20% in the FMCG sector; about 20% for electronics; and from 30-70% for apparel goods. According to Purnendu Kumar, senior retail consultant at Technopak Advisors, private labels accounts for 70-75% of sales at Future Group.

The primary reason a consumer buys a private label is usually price, but with improving quality of the products as well as labels and marketing, consumers tend to stick with these products rather than go back to branded labels. Most private label products are priced 5-20% lower than regular items.

Date: Monday, December 24, 2007
Source: Rediff.com

Regional brands get a boost thanks to large retailers

Thanks to the advent of modern trade, smaller brands are being offered more shelf-space, better display areas as compared to kirana stores. According to Subhiksha MD, R Subramanian, “The smaller brands know they don’t have the marketing muscle to drive sales so they offer great deals. Lots of regional brands have become quasi-private labels for us.” Regional brands are usually sidelined are getting a lot more attention than before, thanks to modern format stores considering them as part of their in-house merchandise.

Subhiksha has more than 130 regional brands, most of which have exclusive distribution agreements with the retailer. According to ITC Foods Division CEO, Ravi Naware, “Regional brands rely heavily on trade push and offer higher margins since they hardly invest in conventional brand building. Bigger brands, on the other hand, depend more on establishing brand value and creating consumer pull.”

A perfect example of how a small regional brand has got nationwide attention is Capital Foods, whose brands such as Ching’s Secret Sauces, Smith and Jones ketchups and Keng Thai sauces have been very successful due to the promotion and space it gets at larger format grocery stores, something that is just not possible at kirana stores.

Date: Friday, December 21, 2007
Source: The Economic Times

Kirana stores will survive alongside big retail: ICRIER study

ICRIER’s study that was mandated by the government to study the impact of organized retail stores on small traders, has found that more jobs would be created due to organized retail stores. According to ICRIER director and chief executive Rajiv Kumar, the impact of organized retail will be positive and will allow small traders to compete with large format stores in the long run.

There will be an impact on smaller stores in the short term according to the report, whose full findings will be released when the report is submitted to the government in March 2008. In addition, Kirana stores will have to adjust how they function to be able to compete effectively with large retailers.

He also said that, “Organised retail will not kill kirana shops, but the small ones would over the time adjust to working in tandem with the big retailers.” The ICRIER report was asked for by the UPA government in February 2007, in an effort to understand if larger retail stores would kill small and unorganised kirana store formats.

Date: Thursday, December 13, 2007
Source: The Economic Times

FICCI-Ernst & Young report estimates organized retail will reach $30 billion in three years

India’s organized retail sector is growing at a fast clip and according to a report titled Winning with Intelligent Supply Chains by FICCI and Ernst and Young, it will reach $30 billion in the next three years from its current worth of $14 billion. The organized retail market in India only accounts for 5% of the $280 billion retail market in India will see an increase to 30% of the total retail market.

The report further states that, "The low penetration levels of organised retail in India and the fact that the market size is set to grow at a frenetic pace provide a huge potential for retailers to tap a highly unexplored market." With the economy continuing to boom along with a young population that has a willingness to spend and easy credit availability, the retail sector will continue to grow by leaps and bounds.

The number of malls coming up in the country will increase from 158 in 2005 to 600 in 2010. There are several major issues that the industry has to deal with as yet to really intensify the growth, such as lack of a cohesive infrastructure, multiple taxes, sky-rocketing real estate prices, severe shortage of retail professionals, lack of a fully developed supply chain and unclear governmental policies.

Date: Monday, December 10, 2007
Source: The Economic Times

Discount retail is the winning formula

Discount retailing is the format that is giving many department store chains a run for their money. Discount stores might be looked down upon by their higher priced cousins, but these stores that sell products at 30-40% lower prices are the ones seeing the best results. According to the Images India Retail Report, discount stores will continue to grow at 30-40% each year.

The organized retail market for apparel, footwear and accessories is worth around Rs. 26,400 crore, of which discount retail accounts for Rs. 11,880 crore, which is 45% of the market. The segment is expected to grow to Rs. 26,000 crore over the next three years.

Retailers such as Future Group has its discount chain called Brand Factory, Arvind Brands has Megamart, Provogue has Promart and The Loot, and the list is constant growing with lifestyle retailers adding a discount chain to capture a new set of customers in their mix.

These discount chains are also expanding faster to smaller cities, where buying power is lower than metros and larger cities, and customer aspire to own the well-known brands but only at a lower price. According to Purnendu Kumar, associate director of Technopak, a retail consultancy, “More number of brands means higher surplus stock after the end of every season. So you have more number of brands that need liquidity. That’s feeding the demand for more discount stores.”

Date: Sunday, December 09, 2007
Source: Business Standard

International

Carrefour to have several partnerships

French retail giant, Carrefour is planning to tie up with several partners for its operations in India. According to a source, the company is likely to go in for multiple licensees for different parts of the country as a way to testing the best method. Carrefour is not looking for a long term arrangement with any single partner at the moment and is keen on having a flexible arrangement of opening stores on its own, once FDI in retail is permitted.

There are already several other companies who function under this format in India. Fast food chains, McDonalds’s and Yum! Restaurants also use this method and have multiple partner companies in different parts of the country. Carrefour wants to tie up with licensees for short contracts of 2-3 years. For now, the company has set up two separate business divisions: Carrefour Wholesale Cash & Carry India, Carrefour India Master Franchise Company for its front-end retail operations.

Date: Tuesday, January 01, 2008
Source: The Economic Times

Starbucks ties up with PVR to enter Indian market

US coffee chain Starbucks will finally be opening in India via a distribution tie up with PVR, a leading multiplex company in India. PVR has already started selling some Starbucks products at its Mumbai and Delhi multiplexes and will be expanding to cover 25 additional movie theaters in the metros.

According to Ranjan Singh, Marketing and Sales General Manager for PVR, “The retailing of Starbucks products has already started on an experimental basis at three multiplexes in Mumbai and Delhi. The arrangement is for sourcing the Starbucks products directly from the US, but does not include brewing coffee.” At present, PVR is selling Starbucks products that have a long shelf life, such as cold coffee and mineral water. The company might start brewing hot coffee in the future as well.

Date: Monday, December 31, 2007
Source: Business Standard

Amway to focus on middle-income group

Amway India will be making some changes in the way it does business and will be focusing on the middle class as its target market. Amway has so far been targeting the premium and super-premium categories and has also developed specific products for its Indian consumers.

It’s competitors Avon and Oriflame already target the mid-market section and are expanding to the premium segments, while Amway is doing the opposite. Amway is the second largest direct selling company in the country, after Tupperware. A new entrant to the market this year was US based Mary Kay who entered the country this year. Amway has 80 offices and 450,000 active distributors in the country, recording a turnover of Rs. 738 crore, which is expected to reach Rs. 800 crore this year.

According to Sanker Parameswaran, director-legal and corporate affairs for Amway, “Since a large section of our target consumers has lower purchasing power, we would develop products in the mid-price segment. We would also focus on youth and add 130 more offices this year as our offices act as information centres for new consumers and help them to know the company better.”

Date: Tuesday, December 25, 2007
Source: Business Standard

Calvin Klein plans to position itself as premium denim brand

US fashion brand Calvin Klein is keen to position itself as a premium denim brand in the country. According to Vijay Murjani, MD Murjani Group, who will be launching the company in India, “We plan to build on the brand recognition among young Indian customers of the CK Jeans brand as the most authentic global denim brand. While, so far there’s almost no competition for us in the premium denim business in India, we will build on that advantage through aggressive consumer education at our retail outlet level.”

CK already has six stores in the country, since it entered in April 2007 and hopes to achieve a 100% year-on-year growth for the coming two years. The company will be opening 12 CK Jeans stores by April 2008 and another 12 stores by 2008-09. Calvin Klein Underwear will also be opening up 60 stores by 2008-09.

Initially, the focus on the stores will be on Delhi and Mumbai, and after stores are opened here in April 2008, the company will be looking to the other metros such as Chennai, Kolkata, Bangalore, Hyderabad and Pune to open stores.

Date: Friday, December 21, 2007
Source: The Economic Times

Gautier and Ebony form JV for exclusive stores

Home furnishings retailer Gautier and Ebony have signed a joint venture agreement to launch exclusive home décor stores in the country, with an investment of Rs. 120 crore in the next two years. According to the agreement, the two companies will set up approximately 20 stores ranging from 20,000 to 40,000 sq ft in size which will sell contemporary furniture, home furnishings and other décor products. The stores will be located in north and west India.

According to Manhad Narula, Retail Director of Ebony, "We have entered into a strategic tie-up with Gautier by setting up a joint venture. The French company will provide expertise and products while Ebony will make financial investment besides providing the retail experience." The first store is to be launched in Noida and will be targeting customers who are looking for stylish furniture at affordable prices.

Gautier is located in over 50 countries and has over 300 stores with sales in excess of 160 million Euros. The Chairman and Managing Director of Gautier, Dominique Soulard said that the company’s entire range of products would be available for Indian consumers.

Date: Friday, December 14, 2007
Source: The Economic Times

Reliance looks to build direct sales to Europe and US

Reliance Industries Ltd. is reportedly looking for ways to sell its products to European and US markets. According to a company official, Reliance is looking at all options at the present, even that of setting up stores in international locations or selling its products to a third party. The company currently sells its products through traders in the international market.

Date: Thursday, December 13, 2007
Source: The Economic Times

Gloria Jean’s to open coffee chain in India

US coffee chain Gloria Jean’s will be making its foray in the Indian market and has tied up with the hospitality arm of Landmark Group, Citymax India to set up its retail chain in the country. According to Troy Franklin, regional general manager of Gloria Jean’s Coffees International said that the company’s partnership with Citymax India would allow them to offer the Gloria Jean’s brand to ‘the discerning Indian customer’ who is looking for both value and high quality.

Citymax India will be investing Rs 40 crore to set up 90 Gloria Jean’s Coffee houses in the country in the next four years, with an overall target of opening 500 coffee houses in the next 10 years. The first outlet will come up in Mumbai in the next two months, after which an outlet will be opened in Delhi in June 2008 and one outlet in Bangalore by the end of the year.

According to Ravi Saksena, MD of Citymax India, “Franchising is the route to owning your business - 90 per cent of the food outlets in USA are franchised, while only one per cent are in India. Franchising would enable lots of enterprising entrepreneurs to leverage their skills, real estate and investments to build a strong business.” Gloria Jean’s Coffees International will be targeting executives and professionals in the 25-45 age group and will primarily be based in urban centers.

Date: Tuesday, December 11, 2007
Source: Business Standard

Liz Claiborne looks to Indian market

US fashion house Liz Claiborne has been sourcing products from India for a while, but is now keen on making a foray into the Indian market itself. According to Michael Yee, MD Asia for Liz Claiborne, "This is the right time to enter the Indian retail market. There will always be problems but you can’t miss the opportunity." Currently, over 70% of its products are sourced from Asia, with the amount from India being increased yearly.

Sources suggest that the company is on the lookout for a company to make an agreement with an Indian partner company. Liz Claiborne has strong ties with its export partners such as Arvind Mills and Orient Craft and could be forming an agreement with them as well.

Date: Friday, December 07, 2007
Source: NDTV Profit

Regional Trends

Reliance Digital opens in Bangalore

Reliance Digital, the consumer durable format of Reliance Retail, opened its first outlet in the state of Karnataka, with an outlet in Bangalore. The company has two other Reliance Digital outlets in the country, located in Ghaziabad and Mumbai. Its Bangalore store is spread over 23,000 sq ft of space and stocks 4,000 products comprising of 150 brands.

According to Nitish Tipnis, Head-Operations for Reliance Industries, “The organised retail in Karnataka is growing at a healthy 25 per cent. We intend to open 10-12 stores over the next 16-20 months. Five of those stores will be located in Bangalore.” The company will also be opening stores in Mysore, Hubli and Belgaum. Nationwide, the company will be opening 60 Reliance Digital stores by 2009.

Date: Tuesday, December 25, 2007
Source: Business Standard

Spencer’s upbeat on Kerala expansion, despite protests

RPG Group’s Spencer’s Retail remains upbeat on its expansion into the state of Kerala, even though it has faced protests at the launch of its first hypermarket in the state located in Kozhikode. The company has plans to open two more hypermarkets in the state and around 20 Spencer’s Daily stores in the next 3-4 months.

The protests against the opening of the store was organized by the Kerala Vyapari Vyavasayi Ekopana Samithi, which collected small traders of the city to protest the opening of the Spencer’s store. Samar Sheikhawat, vice president of marketing for Spencer’s Retail, dismissed the protests as being led by the uninformed, saying that the company had no intention of slowing down its plans for the state. Interestingly, Spencer’s has been operating in the state of Kerala for over 86 years and has built a reputation of happy customers.

Date: Monday, December 17, 2007
Source: Business Standard

Apparel & Footwear

Apparel brands gear up for 2008

While 2007 was a good year for the branded apparel segment; the coming year is likely to see more brands broaden their reach to a wider audience. The year saw several brands add lines for a younger audience, many economy brands realized that mass market did not equate to poor design or fashion. The coming year is going to be for the consumer, as it is the brands that will be wooing the consumer and not the other way around.

Arvind Brands changed the way it marketed its Excalibur brand, making it trendier and more appealing to a younger audience. Madura Garments mass market brand, Peter England created a new Elite brand to appeal to high-end customers. According to Ashish Dikshit, President of Madura Garments, “With more youngsters coming into the workforce, the youth cannot not be ignored. Especially since they have aspirations to own brands and have international exposure and greater awareness.”

Another change occurred at Madura Garments high-end brand, Louis Philippe who launched Lp, a sub-brand targeted at the younger consumer. Allen Solly also launched Solly Youth for its younger clientele. Several brands such as Excalibur, ColorPlus and Wrangler entered the women’s wear segment as well this year.

Date: Thursday, December 27, 2007
Source: The Hindu Business Line

Apparel companies focus on women’s wear segment

Apparel brands are targeting women, as it is perceived to be the segment that will rise substantially in the coming year. Reliance Brands feels that it will be women’s wear and lingerie that will be the frontrunners and will be introducing brands for both segments. Raymond also launched its women’s wear collection at its Park Avenue stores as well as a casual wear collection at ColorPlus.

According to Darshan Mehta, CMD of Reliance Brands, “Women-oriented brands have ample growth opportunity as there are only a handful of labels available, and most of them are brand extensions. The premium westernwear and fusionwear market is expected to grow as the number of working women increases.”

Retailers such as Esprit, Allen Solly, Mango are now focusing on women’s wear, along with denim retailers such as Lee, Wrangler and Levi’s. Raymond is especially bullish on this front and is aiming for a 25% share of the women’s wear segment, expecting revenues of Rs. 400 crore in the next three years.

The branded lingerie segment is estimated to be worth Rs. 1,700 crore, which is attracting lots of new players. Etam joined up with Pantaloons Retail, La Perla also entered the Indian market and Benetton India will be focusing on its lingerie label Under Colours of India.

Date: Sunday, December 30, 2007
Source: Business Standard

Pharma Retail

Small pharmaceutical retailers team up to compete with large chains

Small local pharmaceutical retailers are teaming up to compete with large retail chains that are entering the segment. Local pharmaceutical company currently account for 97% of all business. In Ahmedabad, local pharmaceutical retailers have joined together to open Healthcare Pharmacy to compete with larger chains. Another such initiative is Planet Health that will open in 2009.

Spearheaded by the Indian Retail Pharmacy Network, an association formed by 7 pharmacy stores in Ahmedabad, the company opened its first store in April this year and now has expanded to 12 stores in the city.

Date: Wednesday, December 19, 2007
Source: The Economic Times

Lifestyle & Luxury Retailing

Wadhawan enters lifestyle retail

Wadhawan Holdings, the promoters of the Spinach retail chain announced it would be entering lifestyle retail with its launch of international brands such as Ed Hardy, Christian Audigier and Kitson. The company has set up a subsidiary called Wadhawan Lifestyle Retail (WLRPL) and will be investing around Rs. 500 crore to open 100 outlets over the next seven years.

The first outlet is set to open in Mumbai on December 19 and its second outlet will open in Delhi on December 26 this year. The first five outlets will be set up by March 2008. According to Kapil Wadhawan, chairman of Wadhawan Holdings, “We see huge opportunities in the luxury goods and services segment as the Indian market for this segment stands at around Rs. 8,000 crore and expected to grow at 30 per cent per year over the next five years.”

Outlets will be opened in the top eight cities of the country initially, and will also be focusing on other luxury segments such as setting up a fashion café and winery. On a different note, the company will also expand its food retail portfolio by opening a cash-and-carry format.

Date: Tuesday, December 18, 2007
Source: Business Standard

Home Décor stores catching on

The rising incomes and increasing consumerism is leading to the success of home décor stores in the country. In the next few years, the number of international branded retail stores and products are set to increase substantially. Bella Casa India Pvt. Ltd. is one such new venture that is being backed by the Rajan Raheja group and will be setting up Bella Casa, a chain of high-end home décor stores with branded European tiles, bath and kitchen fixtures. The company will also be setting up Tile Bazaar to cater to the low-end market.

Ananth Narayan, CEO of Bella Casa, says that the company will be setting up around 650 stores for both its brands by the year 2017, starting with cities such as Pune, Gurgaon, Indore, Ahmedabad, Bangalore, Hyderabad and Vizag. The company currently has two stores in the country, located in Bangalore and Thane.

Other companies that are targeting the Indian market, include B&Q, a UK based home-improvement company, Agglomerated Marble, a Spanish company that plans to enter the country in 2008, and Claudi and Mixers, both from Germany.

Date: Friday, December 14, 2007
Source: Indian Express

Rajesh Exports to launch 9 jewelry brands in Bangalore

Rajesh Exports announced that it would be launching nine diamond jewelry brands in the third week of December in Bangalore. All brands are designed by international designers as well as the in-house development team and will be launched at the company’s own retail stores Laabh Jewelers and Shubh Jewelers. The company plans to export its jewelry brands in the global retail market by arrangements with established jewelry retail chain stores.

Date: Thursday, December 13, 2007
Source: The Economic Times

e-Commerce

E-commerce in India to reach $100 billion

It’s not just brick and mortar retail stores that are booming in India, e-commerce is also seeing a surge and sales are expected to reach $100 billion in 2008. According to Bikky Khosla, CEO of Tradeindia, a B2B portal, "With the advent of Internet; far-flung global markets shrunk into one small market. The B2B portals have succeeded in breaking the geographical and other conventional barriers involved in trading." As the reach of the Internet increases, ISPs are reducing costs and improving connection speeds, which is one of the major reasons of the rise in online sales.

Date: Sunday, December 30, 2007
Source: The Financial Express

Focus on existing online shoppers’

E-commerce players need not waste time worrying about the low penetration of PCs. “We can tap the 10 million people who do shopping online and 32 million people who access the internet,” said Mr Manish Agarwal, Vice-President (E-Commerce) of Rediff.com.

Talking on ‘Online retailing –Future of retailing’ here at the Retail Summit 2007 on Friday, he said e-commerce offered another channel for the retailers to sell their products. “It is a 24x7 shop. It requires no inventory and gives the retailers a reach of 500 cities and towns at one go.”

Date: Thursday, December 13, 2007
Source: Hindu Businessline

SpiceJet plans joint venture with UK-based online retailer

The UK-based online retailer UnderFivePound.com is forging a joint venture with the low-cost carrier (LCC) SpiceJet, in which the latter would have a majority stake. SpiceJet has decided to outsource its logistics and retailing operations to UnderFivePound.com and expects to make a foray into merchandising on board by early next year.

UnderFivePound.Com, through its Web site, sells a range of men’s, women’s and children’s clothing along with other items such as jewellery and houseware gadgets. Known for its ‘amazing’ offers, the Web site, as its name suggests, sells products for less than £5 and is known for its discounts and freebies.

Keeping the pricing of the merchandise in sync with the image of a LCC, SpiceJet expects to sell value-for-money items on board, to its customers.

Outsourcing the backend retailing and logistics functions to the online company in the UK, the airline, to begin with, will be vending watches and imitation jewellery brands to passengers on board its aircraft.

Date: Thursday, December 13, 2007
Source: Hindu Businessline

Government Policy

UP Chief Minister says she is not against corporate retail

Five months after the Uttar Pradesh government closed down all western format food retail stores, Chief Minister Mayawati has stated that she is not anti-corporate retail and “if planned well” there was space for everyone to function in the state. In an interview with CFO Asia magazine, she stated, "I welcome private investment in all sectors of the economy. Corporate retailing will not be stopped." She also said the corporates entering the field of modern retailing should provide jobs for those who are affected adversely by their entry.

Further clarifying on her role in the fracas that took place earlier, she said, "I have not ordered their closure...There was a law and order problem with affected people taking to the streets after these retail outlets were opened. Many lost jobs at kirana stores run by families."

UP has also identified three areas in the state to be developed as SEZs on the line of how China has developed them and is trying to attract private sector companies to invest in these areas.

Date: Monday, December 24, 2007
Source: Rediff.com

FDI in retail if kirana stores not affected: Sahai

The minister of State for Food Processing Industries Subhodh Kant Sahai hinted that the government could open up Foreign Direct Investment (FDI) in the retail industry if kirana stores were not affected. He also said that “jobless ex-politicians” were at the root of leading the protests, which were ultimately adversely affecting farmers and consumers.

At a function organized by FICCI, he said "India may open up its $330 billion retail market after being convinced that kirana stores will not be affected by big retailers." Adding that the Department of Industrial Policy and Promotion (DIPP) has requested for a study to be conducted on the likely impact of FDI in retail on small kirana stores, which will be ready by March 2008.

Emphasizing that the aim of the government was to create jobs for farmers, opening up the retail industry to foreign players would be one of the best ways to do it. According to the 11th Plan, the government will be providing Rs. 10 crore to integrate supply chain and give tax incentives to develop related infrastructure such as setting up of cold chains.

Date: Monday, December 17, 2007
Source: Business Standard