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Retail News March 2008 |
ITC mulls more lifestyle stores, ties up with design cos
ITC Ltd’s lifestyle retailing business division is planning to expand its retail footprint further by setting up more Wills Lifestyle, John Players and Miss Players stores across the country. It has also embarked on an active exercise to create a stronger brand and retail identity for Wills Lifestyle, which it wants to position as a more international and aspirational brand.
ITC has piloted a new store concept with FRCH Design of the US, a specialist in store and mall design. Three concept stores have already been launched, two in Mumbai and one in Delhi. It is also working with the UK’s Elemental Design and The Friedman Group from the US in areas like product presentation, visual merchandising and retail training.
As per Mr Chand, plans are on to increase the number of Wills Lifestyle stores from 250 to 400 by the end of 2008-09. “These stores will come up on the lines of the concept store, which has been designed taking the cultural context, customer profile, etc, in mind,” he said.
February 27, 2008
Source: Economic Times
Tatas plan home furniture retail with Steinhoff
The Tata Group is reportedly exploring joint venture plans for home furniture and lifestyle products retailing with Steinhoff International, one of the top five integrated lifestyle furniture suppliers in Europe and Australasia, and the largest in Africa, sources said.
The JV is likely to be called Tata Home and is expected to be set up through an SPV of Tata Sons or Tata Africa Holdings, sources said. It is learnt that discussions have reached the business planning stage. Officials of both groups are discussing plans to set up 50,000-60,000 sq ft formats across leading metros and tier I markets, sources said.
According to rough estimates, home furniture accounts for nearly Rs 14,000 crore of the Indian furniture market, and the organised players control only 10-12% of this. Consumers are getting more brand conscious and the market is growing at over 20%, industry players say.
KSA Technopak estimates say durables purchases peak in the 20-34 years age group and the growing number of double-income couples setting up households are driving growth in the country.
February 27, 2008
Source: Economic Times
Reliance eyes retail JV with Marks & Spencer
Reliance Industries chairman Mukesh Ambani’s deal-making spree to get the best domain expertise in the retail sector is poised for the big one now. His retail arm, Reliance Retail (RRL), is locked in ‘substantial’ discussions to float an equal joint venture with iconic UK fashion retailer Marks & Spencer (M&S) for apparel, gourmet food and cafes, multiple sources familiar with the situation said.
The deal, slated to be clinched in the next three weeks, would see the UK retailer bringing in new formats like food and cafes into India. M&S’ core business — apparel and lingerie — is already operational in the country.
According to a source close to the deal, the gourmet food format is likely to be integrated with Reliance Fresh “wherever possible,” (upmarket localities) as a shop-in-shop format. This would help M&S get immediate scale in food business. There are 491 Reliance Fresh stores that sell food, FMCG and fruits and vegetables and this figure is likely to touch 1,400 by the end of next fiscal.
Sources said M&S would settle for a 50:50 JV with Reliance, in a marked departure from its earlier stance that it would like to keep the maximum permissible 51% stake under FDI regulations in single-brand retailing. Troubled by stagnant growth in matured markets, M&S is looking to rapidly scale up operations in expanding economies like India and China.
February 25, 2008
Source: Economic Times
Reliance Retail eyes franchisee route to ramp up business
In a bid to rapidly build up scale, Reliance Retail now plans to take the franchisee route. Faced with skyrocketing real estate costs and delays in retail space acquisition, the company has now decided to co-opt existing small retailers in its expansion plan in all formats other than Reliance Fresh and Reliance Hypermarket.
“We will have franchisees in every format, except hypermarket and Reliance Fresh,” Reliance Retail Lifestyle CEO Bijou Kurien told ET, adding that franchisees would comprise a significant portion of the total number of stores Reliance Retail plans to have. The franchisee stores could be close to half the total numbers.
By roping in existing retailers, Reliance Retail would get access to large chunks of high-street properties, which every retailer admits is the toughest job in putting together a retail operation. “The difficulty in locating land, negotiating a good deal and then the time taken to conclude a deal are the most significant challenges for our business,” he added.
Besides the usual advantages of franchisee model, Reliance is also seeing it as a move to co-opt traditional retailers and assuage fears about organised retailers driving small storekeepers out of business.
February 22, 2008
Source: Economic Times
BIG Shopping Centres to build 60 malls; invest $2.4 bn
BIG Shopping Centres on Thursday announced its entry into India's retail market with plans to develop 60 stores across the country in the next 10 years at an investment of about Rs 9,600 crore.
BIG India Malls Pvt Ltd, a joint venture company between Israel-based BIG Shopping Centres and US-based Lehman Brothers' wholly-owned special purpose vehicle BIG Mauritius Holdings, would develop the shopping malls over about 24 million sq ft of retail space.
"The initial plan is to roll out 60 shopping centres in the country, which will be based on our 'open mall' concept. For this venture, we have earmarked an investment of 2.4 billion dollars," BIG India Malls Pvt Ltd Director Eitan Bar Zeev told reporters here.
To begin with, the company would roll out the first mall at Thane, Mumbai, in November this year, which would be spread over 8.5 acres with a retail space of 5.5 acres, he said, adding that "for the ground floor, we have assigned retail chain 'Hypercity' as the anchor tenant, while the upper floor will have shops of different retailers". After Thane, the company plans to launch such malls in Bangalore, Vadodara, Nagpur, Bhopal and Pune.
"Open mall is a new concept here, where parking is free and the structures will be up to maximum 'ground plus one' level with large free area. There will be no entertainment or 'hang around' zones as these are meant for hardcore shopping," he added.
The Bangalore mall will be completed by 2009. Besides metros, the main focus will be Tier II and Tier III cities, he said.
February 21, 2008
Source: Economic Times
India's retail extravaganza may be in for a shakeout. The country's pioneer retail chain Shopper's Stop, promoted by the Mumbai-based K Raheja Group, is on the block.
According to industry sources, the group is looking for a buyer for Shopper's Stop as also its other retail formats, including Home Stop, Crossword, Stop & Go (airport retail) and Brio. Sources said that Reliance Industries (RIL) and the A V Birla Group are taking a serious look at the buyout proposition.
When contacted, Shopper's Stop managing director B S Nagesh said, "These are just baseless market rumours. There is no credibility whatsoever. Shopper's Stop is not for sale."
Sources at Reliance Industries said that on its part, the company's retail arm Reliance Retail has looked seriously at the business and is inclined to buy it, if the price is right.
February 19, 2008
Source: The Times of India
Aditya Birla Retail's supermarket brand more. launch in AP
Aditya Birla Retail Limited today announced the rebranding of the Trinethra grocery retail supermarkets to ‘more’, a name reflective of its commitment to consumers. The rebranding follows the acquisition of the Trinethra stores by Aditya Birla Retail Limited last year. As a result of the integration process, 105 Trinethra stores in Andhra Pradesh will be rebranded and 12 new stores have already been launched under the umbrella of ‘more’.
The acquisition of Trinethra Super Retail has provided Aditya Birla Retail with a strong retail footprint in South India extending to 275 stores over more than half a million square feet in the key states of Andhra Pradesh, Karnataka, Tamil Nadu and Kerala, where it is the leading food and grocery retailer.
February 16, 2008
Source: Moneycontrol.com
Bharti's final retail plans by April: Mittal
Bharti Enterprises, which had last year announced a $2.5-billion investment for its retail venture, is expected to announce its final plans, including that of opening of the first store by April. "You can hear from us on the final concrete plans before April-end," Bharti Enterprises Chairman Sunil Mittal told PTI on the sidelines of 'GSM World Congress' here. Asked when and where, the first store of Bharti Retail would be opened, he said: "It will be in North India."
The announcement of the final plans is also expected to end speculation over branding of the front-end store of Bharti Retail on whether it would carry the name of Wal-Mart.
The JV is expected to open its first wholesale facility by the end of this year, with 10-15 such stores being planned to be opened in the next seven years. The group had announced that it would launch its retail outlets in multiple formats, including hypermarkets and supermarkets, from the first quarter of 2008.
It planned to partner local store owners for the smaller format convenience stores through franchise model. The company is aiming to earn around 5 billion dollars by 2015 from its retail initiative.
February 15, 2008
Source: Economic Times
Biyani to ramp up e-Zone operations
Home Solutions Retail, part of the Future Group, is scaling up operations of its premium consumer durable retail format, e-Zone. The company will be launching Mega e-Zone, a larger variant of the existing chain of consumer durable stores.
The company operates e-Zone and Electronics Bazaar, a value retail format through its Big Bazaar hypermarkets. Manoj Kumar, CEO, e-Zone and Electronics Bazaar said, “The Mega e-Zone, measuring 25,000 sq ft and above in area, is being developed as a destination store for electronics purchase. The store will offer seamless space for brands to retail their own merchandise.” Mega e-Zones will allow companies to display wider range of products and comprise eight home theatre zones.
The company has locked real estate spaces in eight top cities with the first store slated to open in Bangalore. Currently, the company operates more than 25 e-Zone outlets with an average store size of 10,000 sq ft.
Home Solutions intends to invest Rs 500 crore in its consumer durable and electronics retailing business in the next two years. The durable retail operations are expected to cross Rs 700 crore turnover by financial year-end.
February 15, 2008
Source: Business Standard
RIL Retail gets 1 loyal client on every sq ft
Mukesh Ambani-led Reliance (RIL) group's retail juggernaut seems to be gaining scale uninterrupted, despite hiccups like political protests, going by the success of its customer loyalty programme.
Reliance Retail, within the four months of rolling out its first store in November 2007, has touched an outlet base of 500 stores in various formats, spanning three million square foot (sq ft) of occupied space in various cities.
This expansion of the retail space has been achieved alongside the company's customer loyalty programme - Reliance One - which has also touched a membership base of three million customers.
The average of one loyal customer per every square foot of retail space is probably the highest and fastest loyalty programme amongst all the retail companies in India, according to industry people who did not wish to be identified.
Reliance One, a pre-paid facility which allows customers to start using it right from the point of purchase, is valid across all the nine different formats of Reliance Retail stores.
Building on the success of Reliance One, the company is also seeking to become "the distributor of choice" for all financial services companies with an all-India footprint at every product level, said an industry source.
February 11, 2008
Source: Business Standard
Reliance Retail plans more format stores
Reliance Retail will see a total investment of Rs 25,000 crore in the next two-three years, said Mr Manu Kapoor, Senior Vice-President, Reliance Retail Ltd. This investment will be for the complete roll out of its entire retail operations.
The company plans to increase the number of various format stores across the country. Of the various format stores, Reliance Wellness, Reliance Super and Hypermart will see the maximum growth. Reliance Super, currently at two, aims to grow to 11 by the end of this year, Reliance Wellness (six) to 20 and Hypermart (two) to 30, said Mr Kapoor.
As part of its expansion plans, Reliance Retail on Thursday launched Reliance Wellness in Chembur, Mumbai. “We already have three such stores in Hyderabad and two in Bangalore. We have received a positive customer feedback, we would therefore want to replicate a similar model throughout the country,” said Mr Kapoor.
The company plans to set up four such stores in the National Capital Region (NCR) by the end of February.
February 8, 2008
Source: Hindu Businessline
Aditya Birla group readies $100-m Family Stores
The $24-billion Aditya Birla group, which has entered the retail bandwagon with big plans, is going to make a $100-million retail splash through its textile and apparel arm Madura Garments this summer.
The company is going to launch a network of ‘Family Stores’ across the country, targeting the value segment. “It will have apparel for all age groups. It would encompass all (brands and products for all). We are working on a branding exercise ahead of the launch,” Mr Vikram Rao, Business Director of Textile and Apparel division, said.
Mr Rao was addressing the international Brand Summit organised here by the Confederation of Indian Industry (CII). “We are going to open the stores in May-June. We also have plans to focus on the men’s lifestyle range,” he said.
February 7, 2008
Source: Hindu Businessline
Arvind Mills may demerge retail, brands
After aggressive expansion in brands and apparel retailing, the Lalbhai Group company Arvind Mills has started thinking of demerging the two businesses into separate companies and listing them subsequently.
The Rs2,000 crore textiles firm, which is one of the biggest denim makers in India, has shifted its focus on brands and retailing since last few quarters due to slide in its denim business.
A banker close to the development said Arvind Mills is likely to hive off its retail (Mega Mart) and brands segment (Arvind Brands) into separate companies going forward.
February 7, 2008
Source: DNA
Aditya Birla Retail has announced rebranding of Trinethra stores in Andhra Pradesh into its own format `more'.
Addressing a press conference here on Friday, Mr Sumant Sinha, Chief Executive Officer of the retail company, said the rebranding would be completed by the end of February. The company acquired Trinethra last year from India Value Fund. With this rebranding, the ‘more’ network would now comprise 350 outlets in various cities. Majority of them (278) are in the South. The company plans to open up to 1,500 supermarket format stores and 100 hypermarkets in the next three-four years.
February 2, 2008
Source: Hindu Businessline
Aditya Birla Retail to invest Rs10,000cr
Aditya Birla Retail (ABRL), the retail arm of the Aditya Birla Group, would be investing Rs 8,000 to Rs 10,000 crore in expanding its operations across the country over a period of five years.
The company, which aims to emerge as one of the leading retail players in India, plans to have nearly 1,500 supermarket and 100 hypermarket stores in the next five years. It is also investing in backend infrastructure to develop a robust supply chain, Sumant Sinha, chief executive officer, ABRL said.
ABRL, which launched its first store in May 2007 at Pune, currently has nearly 400 supermarket stores and one hypermarket store. Its retail footprint in South India extended to 275 stores following the acquisition of Trinethra Super Retail stores last year. The company is setting up a hypermarket in Baroda by this month-end. At present, it has one such store in Mysore. Andrew Denby, chief executive officer (supermarkets), ABRL, said the company's retail stores served 2 million customers last month.
February 1, 2008
Source: Business Standard
Reliance to launch auto speciality stores
Reliance Retail Ltd will open on Thursday the first outlet in a chain of speciality stores that will sell auto accessories, and service cars in a bid to get a share of the wallets of car owners in one of the world’s fastest growing automobile market.
The company will launch Reliance AutoZone outlets in the western town of Jamnagar in Gujarat, where its parent Reliance Industries Ltd has a refinery. It plans to open up to 400 such stores nationwide in the next three-four years. Each AutoZone outlet will house a service centre for cars as well as two-wheelers.
The store will also retail electric bikes and the company plans to offer buying and selling of used cars in coming months. The company plans to open many of the AutoZone outlets alongside Reliance Retail’s other formats, including the hypermarkets and supermarkets, as well as having such outlets in independent locations.
Reliance has picked Jamnagar to roll out its first 12,000 sq. ft AutoZone outlet as the company has space next to the hypermarket that it opened there this week.
January 31, 2008
Source: LiveMint
Arvind Brands to launch large format stores
VF Arvind Brands announced that the company would be opening up large format retail stores as an effort to combat high rentals. The company, which is a joint venture between the VF Corp and Arvind Mills, will be unveiling its new outlets later on this year. Properties for the new outlets are in the process of being taken already. Most outlets will be in the range of 3,000 to 6,000 sq ft. The company will be selling brands such as Jansport along with denim brands such as Lee and Wrangler, so that all brands complement each other.
January 30, 2008
Source: The Economic Times
As organized retailing takes off in India, so do discount chains
Mayank C., a 27-year-old engineer, loves shopping and confesses to indulging in retail “therapy” every fortnight. Nothing unusual really, except that Mayank never steps into the upmarket outlets near his home. Instead, he travels the 10km it takes to get to a discount mall. Turns out, Mayank is not alone among India’s young shoppers looking for famous brands at reduced prices.
With half of the country’s population under 25 and two-thirds under 35, the knowledge and aspiration for international brands is on the rise as is the quest for bargains. Even as branded retail itself is starting to take off, there is already a surge in branded discount outlets in India.
A year ago, there were some three prominent discount retailers in the country, but in the last few months, there have been four new entrants and, they are all on an expansion spree. Pantaloon Retail (India) Ltd’s Brand Factory, Arvind Mills Ltd’s Megamart, Vishal Megamart, the discount store chain of Vishal Retail Ltd, and Provogue (India) Ltd’s Promart have been the most prominent players in the field.
A number of relatively newer players, such as The Loot (India) Pvt. Ltd, which operates The LOOT outlets, Krishna Group’s The Grab Store and Prateek Apparels Pvt. Ltd’s Coupon have started in the last few months.
Some 45% of branded products are estimated to be sold at discounted rates. Brand discount retailers typically offer 25-80% discount on products through the year and insist they do not sell counterfeits or factory seconds, or products typically rejected by stores.
Pantaloon Retail, which currently has six Brand Factory stores, plans to have 40-45 stores in the two years. Megamart, which has 91 stores, plans to have 200-250 stores in four-five years, by investing Rs400-500 crore. It also plans to have 30-35 large format stores with a size of about 50,000 sq. ft. The Grab Store currently has one store and plans to have 50 stores by March next year. The company’s marketing head Snigdha Kar says each store would have an investment of Rs90 lakh.
The LOOT plans to invest Rs100 crore by March 2009 to expand its footprint across the country. It currently has 30 stores and plans to raise the number to 100 within a year. Prateek Apparels, which has two stores, plans to set up 50 more discount malls by 2010 at a cost of Rs400-500 crore, according to Sudeep Menon, director, Prateek Lifestyle.
Retailers say although the profit margins of a discount retail format are much less than a full priced retail store, the higher sales volumes in a discounted format compensate the cash flow. The profit margin in a discount retail chain is 6-10% says Ganesh Raman, marketing head, Megamart. He refused to divulge the profit margin of full priced retail stores.
But discount retailers are already facing stiff competition from exclusive factory outlets, seconds’ stores and seasonal sales at regular stores. “When it comes to positioning, discount retailers do not pose a threat to us. People who are fashion-conscious and want to buy products when they are in vogue will anyway come to us. But yes, they are a threat when it comes to value share and wallet share. If a customer gets the same product at lesser price, it is obvious that they will go for cheaper options,” says Govind Shrikhande, chief executive officer of Shopper’s Stop, a multi-brand retailer.
Shoppers find the lack of a full range—especially of sizes—a problem. As a result, discount stores won’t necessarily eat into market share of other retailers, says Purnendu Kumar, associate vice-president, KSA Technopak, a management consulting firm. Kumar predicts discount retailing will grow at the 25-30% and would become more specialized in future.
March 4, 2008
Source: LiveMint
50% of malls may shut down by '10, hype to go: Experts
Consolidation in the retail industry would result in nearly 50 per cent of the malls shutting down by March 2010 and the hoopla surrounding the sector would considerably subside by then, a brand expert has said.
"By March 2010, around 50 per cent of malls would close down while retailers focusing on consumers would thrive. Those who focus on investors, however, will not survive," Samsika Marketing Consultants Chairman and Managing Director Jagdeep Kapoor told reporesr here.
Retailers think that consumer demand had increased but they do not realise that consumers had also become more demanding, he said. "Those who will understand both will survive."
Retailers were concentrating more on expansion which was not enough for surviving in a market that was becoming intensely competitive, he said. "They need to look at depth by improving their services and focusing on how to retain the consumer."
By the end of the calendar year, margins of organised retailers were likely to decline, Hypercity CEO Andrew Levermore said. "Retailers, especially in the food and groceries business, would be the worst affected." "We will see some consolidation and mergers and acquisitions happening in the sector," Levermore said.
However, two categories of retailers would survive in this scenario - the ones with deep pockets who could sustain losses for a long period and the others who had accumulated experience in the sector, he noted.
February 24, 2008
Source: Economic Times
Retail franchising expects to grow two-fold in 5 years
The concept of franchising has picked up substantially in the retail industry, which is expected to witness two-fold growth annually over the next five years, a top brand expert said.
"In the last three years, franchising has been clocking a 60 per cent year-on-year growth which is likely to accelerate to 100 per cent over the next five-year period," Samsika Marketing Consultants Chairman Jagdeep Kapoor told media here. "The main driver of this growth would be retailers' aspirations to expand fast." To keep pace with increasing consumer expectations on quality, ambiance and brand experience, an increasing number of companies are now adopting the franchise route, he said.
"We will have 10,000 Reliance Money outlets by December 2008, of which 9,000 outlets will be franchised," Reliance Money Director and CEO Sudip Bandyopadhyay said. "We have around 10 per cent of our own outlets while the remaining 90 per cent are franchised." At present, Reliance Money has around 5,000 outlets, of which, 4,000 outlets are franchised, he said, adding that this number has been achieved within ten months.
Besides, it was not practically possible to know all the local languages whereas for forays into Tier II and III towns and rural areas, it was very important to know the local language. The best way to enter these markets is through the franchise route, Bandopadhyay said.
"Franchise is a big opportunity for both brand owners and the store owner. It's a win-win situation for both," Future Group, Home Solutions, Retail India Ltd's Chief Executive Officer Hemchandra Javeri said. Real estate and rental corrections in retail will happen in the next two years and in that scenario, the franchise model would work well, he added.
February 24, 2008
Source: Economic Times
Small stores show the way on bill savings
Shyamala Balasubramanian, 48, travels about 5km from her house in Mayur Vihar Phase III in the Capital to the Big Bazaar hypermarket in Noida, a New Delhi suburb, once or twice every month — to save some money. “A visit here in the first week is a must every month,” says Balasubramanian, as she stands in queue to pay for a trolley-full of groceries for her family of four. “I can save Rs400-500 on a bill of around 4,000 (rupees) and also I get gifts.”
When Mint presented a copy of Balasubramanian’s bill to a local grocery store, or kirana, and asked it to repeat the order, the result was surprising. Shopping at the local grocery store would have saved Balasubramanian a bit more. Balasubramanian was picked randomly, as was the kirana that was asked to repeat the order. To be sure, not all the items the housewife picked at Big Bazaar were available at the kirana.
As organized retail begins to take root in India, the tussle between it and small stores has taken on a new pitch: Companies operating modern retail stores claim they offer wider choice and cheaper prices. This has forced smaller shops to innovate and get competitive with pricing to keep their traditional customers.
In December, Mint carried the findings of this study that showed that small retailers in areas where organized retailers had opened stores had seen a fall in revenues and profits and that consumers were happy with the advent of organized retail because it meant convenience and lower prices for them.
Big Bazaar is part of Pantaloon Retail (India) Ltd, India’s largest listed retailer.
Balasubramanian isn’t complaining about the air-conditioned, well-stacked aisles at her supermarket. She usually does her grocery shopping at Big Bazaar on the first Sunday of the month, after her banker husband draws his pay. On this particular weekend, she bought items ranging from toothpaste to tea and her total bill that day was for Rs3,410.
Mint tried to compare rates for the items Balasubramanian purchased at Big Bazaar from a small grocery store located a few hundred metres from the hypermarket. For a start, only 30 items were available at Grover Store at Atta Market in Noida against the 48 items on the Big Bazaar bill that Balasubramanian showed Mint.
Mint then attempted to find out the total bill of only the comparable items at both the mom-and-pop store and the hypermarket. The total bill for the 30 like-to-like items, including staples from sugar to sunflower oil, at Big Bazaar was Rs1,812 compared with Grover Store’s Rs1,723—a saving of Rs89 at the neighbourhood grocery store.
One expert said the result didn’t surprise him. “I think where modern retail scores over traditional stores is not necessarily on price, but on the overall value proposition, which includes the 4Cs — convenience, comfort, choice and cost,” said Jayant Kochar, managing director of retail consultancy firm Go Fish Retail Solutions.
“From time to time, modern retailers claim to be cheaper or even cheapest—but that is easy to manipulate by including a couple of loss leaders in the basket of products being considered. Overall, it is unlikely that any particular modern retailer will be significantly cheaper for any extended period of time,” he added.
To complete the exercise, Mint also picked, at random, a shopper who bought groceries at a kirana and compared his bill with what it would have been had he shopped at a supermarket. To see if shopping at the local store disadvantages him in any way, Mint picked up his bill, and using the same methodology of picking only comparables, asked Big Bazaar to fill the order. He bought things ranging from sugar to shampoo and shopping at Shanti Bazar for those items cost him Rs159 less than it would have at Big Bazaar.
Rajan Malhotra, chief executive at Big Bazaar, said that while kiranas operate on low cost and can offer a good price, an accurate comparison between them and modern retail stores would only be possible when the number of stock keeping units at each is taken into account. “On select stock keeping units they can always be cheaper to the consumer, but on the larger basket, obviously, we are cheaper,” Malhotra added.
February 19, 2008
Source: Livemint
Big retailers wake up to ill-effects of plastic
It is understandable that consumers are switching over to supermarket chains for household shopping. An unfortunate offshoot of this phenomenon, though, is the alarmingly high use of plastic in both product wrappings and carry-bags.
Consumer organisations and environmentalists have raised concerns about this trend. Says Sriram Khanna of Delhi’s Consumer Voice, “Some hill states have banned the use of plastic bags. (But) basically retailers do not pay attention to eco-friendly aspects. Consumer education is also missing.’’
In a positive development, though, retail chains Times of India spoke to expressed willingness to reduce their plastic usage. Subhiksha, for instance, has already introduced a 0.5% discount on bill if a consumer brings in his own carrybag. “It’s to promote green habits,’’ says R Subramaniam, managing director at Subhiksha. Kishore Biyani, managing director at Pantaloon Retail (India), says their KB’s Fair Price shops encourages consumers to carry their own bags. Andrew Levermore, chief executive officer at HyperCity Retail (India), is reticent about disclosing the company’s green initiatives, but speaks of “an advanced plan which will be revealed in three months’’ .
February 15, 2008
Source: Economic Times
Big retailers to take care of mom-&-pop stores
India Inc is all set to script an Indian model for retail growth. The government has asked big retailers to chart out an India-specific strategy for organised retail, which would result in inclusive growth of mom-&-pop outlets.
“We have had two rounds of meetings with retailers such as Reliance, AVB Group, Future Group, Bharti and the Tatas,” minister for food processing industries Subodh Kant Sahay told ET. “We want small shopkeepers to get access to big supply chains. Everybody should benefit,” he said.
“Organised retail, in the long term, would create a market as it would help boost supply-chain management for our farm produce also. Without retail, farmers cannot get optimum value for their produce. Due to lack of an efficient supply-chain network, more than half of India’s produce gets wasted,” Mr Sahay said.
February 14, 2008
Source: Economic Times
Off-season sales hurt branded goods
Off-season sales, when shopping malls and high streets buzz with tempting offers of up to 70 per cent discounts on your favourite brand of shirts, jeans or even home textiles, are getting longer by the day. And this is eroding the margins of branded labels.
Leading consultancy firm Mckinsey has observed that almost 40 per cent of the branded apparel sales come from discounting. Market experts say that ideally the ratio between off-season sale and full price merchandise should be 20:80 respectively. But the current trend in the market suggests that the ratio is 50:50.
Rahul Mehta, president, Clothing Manufacturers Association of India, said, “Companies have started taking into consideration the larger share of discount sales in the production cycle. Excessive discounting has no specific advantage to any brand.” This season, Raymond has announced discounts simultaneously across all brands in exclusive stores as well as multi-brand outlets. Industry insiders said that though a certain amount of periodic sale is required to liquidate merchandise, the increasing competition is prompting customers to shift their shopping patterns. Nikhil Chaturvedi, director, Provogue said, “It is important to liquidate the merchandise as stagnant shelf spaces will not attract the repeat customers. The problem lies when brands go on year-round sale and customers do not tend to make full price purchases.”
The problem is hitting companies such as Madura Garments hard. The operating profits of the largest branded apparel player dipped by 7 per cent at Rs 19.8 crore for the third quarter ended December 2007. The company also posted a 28 per cent fall in operating profit for the second quarter over the corresponding period of the previous year. It attributed the dent in bottom line to higher discounts offered to meet market dynamics and high lease rentals for opening new stores.
Mehta gives an example of Double Bull shirts that would be sold only during the sale period.
Ireena Vittal, head retail practices, Mckinsey, said, “Excessive short-term promotion can spoil long-term market behaviour.” She asserted that it is important for brands to communicate price proposition and ensure price discipline in the market as promotions are teaching customers to become bargain hunters.
Endorsing the view that heavy discounts will affect long term profitability B S Nagesh, managing director, Shoppers Stop, said, “ The retailers need to work with brand managers as there is sale for almost six months of the year, affecting foot falls during the rest of the period.”
According to reliable sources, this discount season has been particularly dull for branded apparel players due to weak consumer sentiments.
February 11, 2008
Source: Business Standard
Second-tier retailing is a Smart Idea
Even within India’s retail solar system, not many would have heard of Anil Adamane from Nagpur or Rajasekar Reddy Seelam from Hyderabad . And if the names do ring a bell, it certainly won’t be beyond the vicinity of the cities they dwell in. They don’t enjoy the nationwide fame that’s reserved for the likes of the Biyanis, Ambanis and Mittals — yet Adamane, Reddy Seelam and their ilk are charting a course which, sooner or later, will bring them national recognition.
For they are the second tier of marketers who’re building up retail networks far away from the glitz and glare of the major metros. They have painstakingly built equity in their home turf and are now spreading their wings. From Bellezza saloon to 24Letter Mantra to Khadim’s to Witco, they are the emerging faces of specialised second-tier retailing in India.
Adamane and Reddy Seelam are shining examples of mini-metro entrepreneurship that stemmed from the desire to break out of the daily rut and chase opportunity. Adamane, an MCom graduate, was forced to start a daily provision shop in Nagpur for want of good job prospects. To augment his income, Adamane converted part of his shop into an ice cream parlour and STD booth, starting work at four in the morning and shutting shop by midnight. During his visits to the neighbourhood saloon for a shave, Adamane observed the business closely. That’s when he hit upon a unique service proposition: a saloon with an emphasis on hygiene, ambience and value pricing. Bellezza came into existence in 2003 with the first outlet in Nagpur. Today, Adamane runs 22 Bellezza saloons across Maharashtra, Gujarat, Madhya Pradesh and Chattisgarh. From a two-man outfit — with Adamane learning the craft on the job — Bellezza employs 300 people, and has a turnover of Rs 9 crore.
Out in Hyderabad, it took nearly two years for Reddy Seelam to get an efficient supply chain in place before he rolled out 24Letter Mantra, a retail format specialising in organic farm produce.
The evolution of formats like Bellezza, 24Letter Mantra, Yo! China and Khadim’s indicates an interesting geographic spread these players have envisaged. Yo! China, a quick service restaurant and takeaway chain specialising in Chinese cuisine, has outlets across tier I and tier II cities across India. Likewise, footwear retail chain Khadim’s started operations in Kolkata before moving to states in the east, south and then west. In Maharashtra, Khadim’s has presence in cities like Aurangabad, Nagpur, Sangli and Satara.
These players have adopted a bottom-up strategy, where the brand gets built in markets devoid of cut-throat competition, and then gets scaled up to major metros. Jim Lucas, director of retail ecology, Draftfcb, states that this phenomenon is largely unique to India, where small retailers are innovating even when it comes to expanding their network.
Kapur of Yo! China believes that supply chain problem solutions is a high-cost one, and he hopes that riding piggyback on overall retail growth makes distribution easier.
Having acquired scale, most second-tier marketers are looking at new formats. These tier-two retailers have spent decades polishing their skills and are now limbering up to play in the big league. It’s obvious that not everyone will succeed. Over time, some will falter and would have to go back to the drawing board. A few others will inevitably get acquired by the heavyweights. The most patient , persistent and innovative of the lot, however, will go on to rewrite the rules of the game.
February 6, 2008
Source: Economic Times
With consumption at the heart of India’s growth story, retailers expect the Centre to impress upon the states to take a broader view on the sector. As the states have a major say in the affairs of this sector, the Centre’s role is largely to facilitate “the institutionalising of retail”, they say.
However, there are specific issues such as removal of the 12.36% service tax on commercial rentals where the finance minister can play a role in the budget. With soaring real estate rentals threatening to derail the growth engine, many retailers believe the imposition of service tax in last year’s budget needs to be reviewed.
As real estate component accounts for nearly 40% of the operating costs for fashion retailers, many international brands are delaying their India foray in favour of markets like Russia. International retailer Zara, which is unveiling aggressive Russian plans, is a case in point.
Mall rentals across the country have jumped between 30% and 45%. The picture is not different for a large format grocer who works on thin margins.
Retailers argue that states need to decouple the sector from commercial real estate play in tax and regulatory treatment, like the case of differential energy bills for retailers in Mumbai. A different FSI or plot coverage rule for retail would not only soften the rising rental blow immediately, but also go some way in institutionalising the sector. Not surprisingly, it finds expression in retailers seeking ‘industry status’.
This would also equip the sector, which employs over three lakh people, to ward off ill-informed protests more effectively. The retail sector also believes that the Centre should take the lead in giving a leg-up to the domestic industry by organising a national shopping festival on the lines of Singapore or UAE.
The Centre could also play a role in readying retail manpower, linking it with the various employment-creation programmes. But the key is how the Centre manages to convince the states to adopt a more pragmatic retail-specific approach, and not just retain the sector as incidental.
February 6, 2008
Source: Economic Times
Checkpoint survey cautions against retail shrinkage
It's that time of the year again when retailers gear up to woo their customers with the best of everything -- from lucrative merchandise, great offers to excellent services. Everything is at its peak this season. But on the other hand, the dark side to retail is called "retail shrinkage" is also at its highest point this season.
Shrinkage losses are caused mainly by people stealing goods or money from the company (by customers, employees) and also by a range of small or large process errors, accounting lapses and pricing mistakes that produce apparent inventory losses. According to a recent global research conducted by Centre for Retail Research, UK and sponsored by Checkpoint Systems Inc, shrinkage cost the world's retailers $98.6 billion, representing an annual "tax" on honest consumers everywhere of $287.70 per household.
The Global Retail Theft Barometer Survey Information Report deals with all retail sectors and vertical markets in India, Australia, Japan, Singapore and Thailand. The survey information was provided from 103 large retail businesses of these countries. They operated 16,230 retail stores with combined retail sales of $65,418 million, equivalent to 6% of retail sales in these five countries. The highest shrinkage rate was found in India, 2.90 per cent, a reduction of 9.4% over last year's 3.20%.
February 4, 2008
Source: Expressindia.com
India's retail realty beckons Israeli giants
Israeli mall giants, which own many prime retail-linked realty assets across the world, are buying into India’s big buck retail story. Tel Aviv-based mall giant Gazit Globe has tied up with one of the HDFC funds to pump in $150 million into developing assets, including supermarket anchored retail play.
Another Israeli major, Big Shopping Group, has teamed up with Lehman Brothers Real Estate Private equity to set up ‘open malls’ in tier I and tier II cities.
While Gazit Globe’s retail play in the Indian market is still not clear - it is also looking at getting into business parks and special economic zones (SEZs) - Big Shopping Group along with Lehman has drawn up plans to show up with 60 centres over the next 10 years. This will entail over $2 billion in investments, with over $100 million pumped in as initial corpus through Big Holdings Mauritius, a wholly-owned subsidiary of Lehman Brothers real estate private equity.
“Our malls will be essential purchase malls, and not driven by entertainment shopping and impulse purchase. Big Malls will cater to planned shoppers. We are looking at 15-20 acre plots to develop 4 lakh sq ft of retail space in ground plus one level format. In Big’s experience, we feel that shopping rarely goes up more than one floor (level),” says Big India Malls Pvt Ltd CEO Sanjiv Trehon.
Big Malls will be located on a major highway leaving a city, which invariably locates them at the outskirts targeted at destination shoppers. The open mall concept also brings down the cost of development as there is no central atrium and air-conditioning.
Industry sources say there are about 12-14 Israel-based retail chains that are exploring an Indian foray through the two mall operators. Having played the real estate game globally, the Israeli giants are quite content with dabbling in the retail play across tier II cities in India given the exorbitant realty costs in the leading metros.
For instance, after the initial forays into Mumbai and Bangalore, Big Malls will tap into markets like Pune, Indore and Nagpur. Big Malls have roped in Hypercity as one of its anchor tenants at its Mumbai and Bangalore properties. As a part of its mall management strategy, it only leases out space and does not opt for outright sale.
February 28, 2008
Source: Economic Times
Giorgio Armani-DLF JV to make retail foray in India
Iconic Italian fashion brand Giorgio Armani is rolling out retail stores in India soon. After evaluating several options, Armani has entered into a 51:49 joint venture with India’s biggest real estate developer DLF. After protracted negotiations, DLF has agreed to give 51% stake––the maximum permissible under single-brand retail norms for foreign investment––to the Italian partner.
According to the details submitted with the Foreign Investment Promotion Board (FIPB), the Netherlands-based Giorgio Armani Holding BV, a wholly-owned subsidiary of the parent Italian firm Giorgio Armani S.p.A., will bring in Rs 1 crore for the joint venture. The JV will also act as a wholesaling firm supplying Armani branded products to other independent retailers.
The joint venture will undertake the sale and distribution of several Armani brands, namely Giorgio Armani, Emporio Armani, Armani Jeans, Armani Junior and Armani Collezioni across India. Delhi, DLF’s stronghold, would see Armani’s first stores. The Italian brand would be retailed at two stores in the Emporio Mall, being developed by DLF.
The roll out would subsequently spread to other luxury locations across the country. The Armani-DLF JV also plans to set up shop-in-shops to exclusively sell some of the Armani branded products such as Armani Jeans, Armani Junior, Armani Collezioni and Emporuio Armani Underwear. These shops will be located in departmental stores and duty free shops at airports but will have an independent invoicing system.
February 19, 2008
Source: Economic Times
Wal-Mart poised for cash & carry foray
The Bentonville-based retail giant Wal-Mart has finalised the business model for its cash & carry (wholesale) business in India.
The first warehouse (distribution centre), which will be up and running in Ludhiana, Punjab, by this June, will have a format similar to Wal-Mart models in the US. However, the product profile will be different from the US stores.
Wal-Mart’s cash & carry business, which is a 50:50 joint venture with the New Delhi-based Bharti group, is meant for large institutional or wholesale buyers and is not for retail sales.
Ted P Huffman, director of supply chain and logistics for Bharti Wal-Mart, said, “The distribution centre will be similar to Wal-Mart centres in the US, but it will be smaller.” While centres in the US are spread over 1 million sq ft —two football fields put together—the Indian centre will have a size of 80,000 sq ft. He says high real estate costs are the reason for smaller distribution centres.
Under the terms of the joint venture, Bharti will use Wal-Mart's back-end supply chain technology to sell to wholesale retailers. This includes the inventory system, logistics technology, cold chain infrastructure, truck tracking programmes and fuel management.
According to sources in the know, Bharti Wal-Mart had made plans for rolling out the technology for the distribution centre by the end of 2008 and Wal-Mart CEO Lee Scott had personally asked for the Indian operations to up and running by the end of the next quarter.
Further, the company is studying other locations across India to set up distribution centres. The Ludhiana centre will have 30-50 employees to sort goods for dispatch to different stores in North India.
February 3, 2008
Source: Hindustan Times
(Ranchi) Big Bazaar would open shortly at the Kadru diversion here. Under Pantaloon Retail (India) Ltd, which operates in food and grocery retailing, this six-storeyed hypermarket will give shoppers periodic discounts and interesting offers.
Built in an area of 80,000sqft, the interiors of the market are almost complete and would be open to the public in a month. A parking facility for over a hundred cars has also been constructed.
In the first phase, four floors of the store would be open. The remaining floors will be developed as a “home bazaar” where one could shop for domestic products, furniture and could also avail of plumbing information, among others. Besides, for those who would like to take home freshly baked items, a bakery counter would be in service.
“The hypermarket is already doing well in Calcutta and Mumbai and is attracting up to 15,000 people each day. We expect more customers from our city. Many have already visited our stores in Calcutta and here, too, we promise to give them a complete shopping experience,” the official added.
March 4, 2008
Source: Telegraph
Shops closed in demand for law to curb retail chains
Commercial activities came to a virtual halt in Kerala on Saturday as shop-owners downed shutters as part of their half-day protest demanding a legislation to restrict the entry of big retail chains into the state.
Reports from across the state said thousands of retailers responded to the protest called by the traders' union, 'Kerala Vyapari Vyavasayi Ekopana Samithi.'
Traders also organised marches and took "anti-monopoly" pledge in different centres across the state. The Samiti leaders said this was just a token protest, and, if the government ignored the demand, a prolonged struggle would be launched.
February 23, 2008
Source: Economic Times
Vah Magna Group launches cash & carry venture in AP
Vah Magna, an Indian cash & carry initiative, was launched today by the retail company Vah Magna Group in Hyderabad.
Spread over 60,000 sq.ft at Vanasthalipuram on the Vijayawada highway, the initiative, claimed to be the first of its kind by an Indian company, leverages the consolidated distribution model to offer customers a wide range of products at attractive prices.
Vah Magna Cash & Carry, which involved an investment of about Rs 22 crore, will also develop its own private labels and expand its presence to other markets across the country soon, according to Mr K. Anjaneyulu, founder of the Vah Magna Group. The Group has 65 Vah Magna FoodEx Supermarkets, Magna hypermarkets and restaurant and Grub hub chains. Mr Anjaneyulu is the original promoter of the Trinethra chain of supermarkets.
Mr Anjaneyulu said in the next two months the Group is poised to launch the Vah Magna Super Centre formats with average one lakh sq. ft and additional supermarkets to expand the retail presence in the State. The Group has at present about 65 retail outlets in Andhra Pradesh covering an area of 3.5 lakh sq. ft. Vah Magna’s portfolio includes FMCG products, grocery, apparel, consumer durables, good chains, pharmacy, bakery products, footwear and general merchandising.
The company has firmed up plans to expand to Karnataka, Orissa, Chhattisgarh and Madhya Pradesh in the next two years with its slew of offerings, Mr Anjaneyulu said.
February 16, 2008
Source: Hindu Business Line
Jubilant to grow retail presence in southern cities
Total Hypermarket and Mall, the retail venture of the Rs 5,000-crore Jubilant Group is looking at South Indian cities to expand its hypermarket footprint in the country.
Mr Dinesh Malpani, CEO, Jubilant Group, told Business Line that the company had zeroed in on Bangalore, Chennai and Hyderabad to strengthen its current retail presence, mainly because ‘there’s enough talent here for organised retail’. The Group, which already has two Total super centres in Bangalore, will launch its third one in the city on Friday. “We intend to open at least 8-10 stores per city in the next three years,” according to him.
Currently, the Group is investing about Rs 2,500 per sq ft of space, he said. Spread over two lakh sq ft of space, Total super centres have apparel, footwear, consumer electronics, IT products, furniture and a food section. Each super centre also has a brand mall with selling 25-30 brands.
The New Delhi-based group is present in two formats in retail: hypermarkets (Total) and supermarkets.
February 14, 2008
Source: Hindu Business Line
Reliance Retail Ltd on Wednesday launched ‘Reliance Mart’, a hypermarket, at Reliance Greens, Motikhavdi in the Jamnagar district of Gujarat. Reliance Mart would also cater to the needs of the staff of the Reliance refinery.
Spread across 83,000 sq ft of shopping area, the new Mart will offer a range of over 35,000 products catering to the entire family. This is the second Reliance Mart to be launched in Gujarat.
February 1, 2008
Source: Hindu Businessline
Pantaloon Retail outsources IT operations to Wipro Infotech
Kishore Biyani-promoted Pantaloon Retail has outsourced its IT operations to Wipro Infotech for a period five years valued at 50 million dollar (about Rs 200 crore).
The company plans to increase its geographical footprint by opening 2,500 outlets in India over next five years across formats offering a range of private labels, up from 1000 outlets in 50 cities currently.
"Wipro's leadership in technology and service delivery innovation coupled with our innovative strategies will redefine the retail landscape in India. This partnership is valuable to all our stakeholders, including customers and employees," Pantaloon Retail Managing Director Kishore Biyani said in a joint statement.
As per the agreement, Wipro will be responsible for rolling out and managing IT operations across all the outlets of Pantaloon. Wipro will deliver comprehensive infrastructure management and application support services, managed security services and data centre hosting, operations and management services.
February 15, 2008
Source: Economic Times
Next Retail plans tie-up with US co Bright Star Logistics
Videocon’s Next Retail is planning to have an exclusive arrangement for technical support and sourcing services with Bright Star Logistics, a $3-billion US-based distribution company in the category of mobile devices.
Forging an arrangement along the lines of the Tata and Woolworth tie-up, the global company is expected to serve as the back-end operator for the Next and Planet M stores.
Mr K.S. Raman, Director, Next Retail, told Business Line, “We would be having an exclusive arrangement with a global distribution company which is almost similar to the Tata-Woolworth association. This global company would manage the inventory, sourcing, merchandising and back-end operations of our mobile phone business.”
With its presence in 50 countries, Bright Star Logistics also provides supply chain facilities for mobile devices and has arrangements with a host of retailers and manufacturers across the globe.
Providing back-end technology for retailing operations of Next and Planet M, Bright Star Logistics is expected to give an impetus to growing the mobile phone category for the consumer durable retailer.”
Bright Star Logistics would also bring in its patented software to prove brand analysis in this category across markets. It would provide initial knowledge needed for the new mobile phone models being sold at the stores.
February 14, 2008
Source: Hindu Business Line
Brandhouse Retails plans to bring home 4 international labels
Brandhouse Retails, a part of the S Kumar's group, said it will introduce four global labels into the country along with two others from the parent company by April, as part of its long-term Rs 400-crore expansion plan.
"Currently talks are in final stages to bring four new international brands in fashion and accessories segment by April in India," Brandhouse Retails Managing Director Tarun Joshi said here on the sidelines of Technopak Retail Summit here.
Of the four brands, two would be in the luxury segment and two in the super premium segment, he said without divulging further details. "By March 2009, we will have eight luxury stores for the two luxury brands," he said.
It plans to open 1,200 mono-brand stores by 2010-11 entailing an investment of Rs 400 crore. "By April we will have 400 stores. Currently, 271 stores are running with another 136 stores under development," Joshi added.
February 21, 2008
Source: Economic Times
Rado plans more exclusive outlets
Rado, the Swiss watchmaker, has lined up plans to take its point of sales to 175 from the present 150. It also plans to increase the number of exclusive showrooms to 14, from the present six, this year.
“We will open exclusive outlets in New Delhi, Ahmedabad, Bangalore, Chennai and Kolkata, besides increasing our presence in Mumbai,” Mr Christian Leiggener, Regional Sales Manager, told Business Line. Stating that the market for premium watches in India had gone up after it was opened up in 1997, he said the company had registered a growth of 35 per cent in sales in 2006-07.
“We are expecting a similar growth rate this year as well,” he said. Mr Leiggener, along with Rado’s brand ambassador and film actor Ms Lisa Ray, was here in connection with the inauguration of an exclusive outlet at Banjara Hills. The company recently introduced its Ceramic Chronograph range of watches, the price of which starts at Rs 67,000.
February 20, 2008
Source: Hindu Business Line
Omega eyes India’s elite for growth
The rising affluence in India spells growth for Swiss luxury watchmaker Omega which intends to improve its retail presence in the country. The time-keeper hopes that India will be among its top markets in the next three to five years.
“The sales are at an all-time high and our response from India has been very good. Omega’s image as a lifestyle brand meets the emotional and artistic needs of an aspiring individual. India will be our top market in three to five years,” Mr Stephen Urquhart, President, Omega, told Business Line.
The company, which has five exclusive outlets in India, will be opening a slew of its boutiques during the year, he said. It is also looking at improving its distribution network in the multi-brand outlets.
Estimated at Rs 650 crore, the luxury watch segment is growing at a compounded annual rate of 25 per cent. The market size for Swiss watches alone is about €14 billion and India’s share, at Rs 200 crore, is less than 0.5 per cent of the total market for luxury watches.
February 15, 2008
Source: Hindu Business Line
FabIndia to open 250 stores by 2010
Ethnic retail chain FabIndia is embarking on a pan India expansion to take its total number of stores to 250 by 2010, which could entail an investment of around Rs 200 crore.
"Our current number of stores is 78, which we plan to increase to 250 by 2010," FabIndia Managing Director William Bissel told reporters here on the sidelines of Technopak Retail Summit here.
By next year the company plans to open 80 new stores at an estimated investment of Rs 70 crore
February 21, 2008
Source: Economic Times
Tommy Hilfiger expanding to tier-II, -III cities
Fashion retailer Tommy Hilfiger India is charting its second phase of expansion with a slew of new stores even as it is extending its footprint to tier-II and tier-III cities in the country. Backed by a healthy appetite for luxury brands in the country, the company is poised to clock a turnover of Rs 100 crore this fiscal.
“There is immense appetite for luxury brands in India. The market is exploding. We are currently in the second phase of expansion and will be having 23 points of sale by the end of this fiscal,” Mr Shailesh Chaturvedi, CEO, Tommy Hilfiger India, told Business Line.
The company said it hopes to become a pan-India luxury brand by 2010. The new stores from its stable will come up in the tier-II cities such as Ahmedabad, Pune and Ludhiana.
The apparel and accessories brand said the new stores will be a combination of both mono-brand and concessionaire (shop-in-shop type arrangement) outlets. While apparel contributes to the chunk of revenue, accessories such as watches and bags too are much in demand, he said adding the company is also looking to scale up its product line.
On the challenges, Mr Chaturvedi said lack of availability of quality retail space and high duty on imported apparels and goods are bottlenecks in the growth of the sector.
February 20, 2008
Source: Hindu Business Line
SSIPL plans Levi's footwear store by next year
SSIPL Retail, master franchisee for marketing Levi's footwear in India, is mulling over setting up an exclusive outlet to retail the brand in the country as it strengthens its presence by adding 110 new multi-brand outlets across-India within the next few months.
Levi's shoes are currently retailed through various channels including Levi's apparel stores and multi-brand retail stores globally. "Our company is in talks with Levi's parent company in the US to set up an exclusive retail store for footwear in India. If we are able to convince Levi's of the US then India will become the first country to have an exclusive brand store for Levi's footwear," SSIPL Retail Managing Director Rishabh Soni told PTI.
He said the company intends to open the first exclusive store by 2009 and would scale them to four in all major metros within 12 months time. The company is planning to increase the brand's presence by adding 110 new sales points pan-India. It presently retails Levi's shoes through 85 multi-brand retail outlets, which include shop-in-shops at Levi's apparel outlets and other retail chains like Shopper's Stop, Pantaloons, Reliance Retail and Big Bazaar.
Soni said with the proposed expansion, Levi's footwear is expected to become a Rs 200-crore business for the company in the next three years.
February 14, 2008
Source: Economic Times
Raymond to strengthen retail presence in towns
Raymond is looking to strengthen its retail presence in Class 4 and 5 towns in the country. Currently, the company operates 92 stores of ‘The Raymond Shop’ in Class 4 and 5 towns. It will add 100-120 stores in two years.
“There is lot of spending on ready-mades in smaller towns, which is mostly driven by occasions such as weddings,” says Mr Aniruddha Deshmukh, President – Retail and FMCG, Raymond Ltd.
Class 4 towns have a population of 50,000 to 1 lakh, while class 5 towns have a population of 1-5 lakh. Raymond is also looking to expand into malls.
Raymond has around 365 Raymond shops in 170 cities. It also has over 100 exclusive outlets of brands such as Park Avenue, Parx and ColorPlus. Raymond also runs 29 stores abroad – in West Asia, Bangladesh and Sri Lanka.
February 10, 2008
Source: Hindu Businessline
India : Koutons makes way for retailing in West Asia
Koutons Retail, an apparel manufacturing company in India has pitched itself to enter the West Asian markets by the end of 2008.
In an exclusive interview with Fibre2fashion, Mr DPS Kohli, Chairman of Koutons Retail India stated, “We are particularly focusing on Middle east markets as also alternatives in China for our overseas expansion.”
By the end of 2010, Koutons is aiming to come up with 1,000 men’s stores and 2,000 Charlie Outlook stores for the youngsters. The company is planning to invest around Rs45 crore for 100 of its flagship stores in around 30 cities.
Recently Koutons raised about Rs100 crore from its initial public offering (IPO) and will utilize Rs55 crore for setting up a new plant including buying land, while Rs10 crore for capital goods and machinery. Besides, Rs5.5 crore will be used for implementation and upgradation of information technology.
February 7, 2008
Source: fibre2fashion.com
Online jewellery auctions hold promise
Saffronart, which promotes contemporary Indian art and conducts art auctions online, sees great interest in jewellery in the auctions space.
Sensing promise in online jewellery auctions, Saffronart recently forayed into this space with a charity jewellery auction sponsored by De Beers and it plans to follow it up with more auctions. From a purely business perspective, the medium offers lot of benefits for jewellers and designers alike, says Ms Minal Vazirani, Co-founder, Saffronart, a Mumbai-based organisation.
“An online auction allows a jeweller to reach out to a wider audience compared to a physical auction or private gallery/store sale. Typically in an online auction, there are 500 active bidders vis-À-vis only 50-70 in a physical auction. Online auctions provide a public fair market when you may have multiple buyers; they create both a primary and secondary market (for resale),” she says.
The online auction provides a platform for jewellers and designers to innovate and sell special and high-end pieces. “It lends value to creativity and innovation. Rare pieces find a niche market here,” says Ms Vazirani. She hopes jewellers will soon appreciate this long-term benefit and utilise this medium.
From a consumer point of view, this is a highly transparent system. “With the bidding history available online, bidders can make more informed decisions. It’s a transparent system and one can sense the level of market interest. It builds on the market value attributable to creativity and innovation,” says Ms Vazirani. Besides, it creates pricing benchmarks and market-driven values.
But can jewellery auctions online replace the physical advantages of touch and feel that one gets in a retail environment, especially since it involves big ticket purchases?
This issue is similar to buying art through online auctions. These auctions are targeted at a very discerning buyer who knows what he or she is buying - despite the lack of the touch-and-feel experience, explains Ms Vazirani.
Saffronart plans to hold an auction of high-end jewellery in autumn this year. Both international and domestic designers and jewellers have expressed interest in participating in the auction. Target consumers include both existing client base and new clients, i.e. collectors of art and jewellery both inside and outside the country.
February 8, 2008
Source: Hindu Businessline
Consumers favour Net research for gadget buys
Gadget buffs in India are increasingly moving online to research their next consumer electronic products purchase, with an overwhelming 83 per cent of survey respondents citing the Net as their most-tapped resource for such buys.
According to the Microsoft Digital Advertising Solutions’ Consumer Electronics Survey, while vendor sites emerged as the most used resource, portals came second, followed by search engines, and product review Web sites.
The Internet was the preferred choice in India because consumers could find the latest available models (67 per cent) and compare product features (65 per cent), and prices (62 per cent) and because they could do this at any time (61 per cent). Interestingly, quality and price were the key criteria for purchasing consumer electronics, rather than the brand name.
Nearly 10,000 MSN/Windows Live service users were surveyed across 10 markets — Australia, China, Hong Kong, India, Japan, Malaysia, Singapore, South Korea, Taiwan and Thailand — in a poll conducted by Synovate during August to October 2007 for Microsoft Digital Advertising Solutions.
“Consumers in India, by nature, generally prefer to go by recommendations and today they have access to a lot more people and communities on the Internet for advice,” Mr Vineet Gupta – India Marketing Manager, Microsoft Digital Advertising Solutions, said.
Products most often researched by the respondents included mobile phones, laptop computers and digital cameras.
Laptops, mobile phones and MP3 players were among the top three preferred electronic products bought online by Indian users. The purchase decisions for electronics most often appeared to be influenced by children in the Indian households.
February 3, 2008
Source: Hindu Businessline
Retailers want less red tape, industry status
Retailers want service tax on rents withdrawn, lesser number of licences and clearances to set up stores, and industry status for the sector from the union budget.
"The service tax on rent is a major problem. We want that to go," J K Jain, Vice President Finance of Provogue (India) Ltd, which makes and retails men's clothing. Separate guidelines were needed for retail infrastructure, which is now clubbed with real estate, forcing retailers to get more permits than required, Jain added.
"There needs to be a single window licence for retailers," said Pushpamitra Das, chief executive officer, Wadhawan Food Retail Pvt Ltd, which owns the Spinach retail chain and is a group firm of Dewan Housing Finance Corp Ltd. Each retail outlet, even if part of a chain, now needs to obtain multiple licences and permits, such as trading licences and product licences, adding to time and costs, Federation of Indian Chambers of Commerce and Industry (FICCI), said.
"Granting industry status may facilitate the provision of fiscal incentives to this high potential sector," FICCI said in its prebudget memorandum.
The retail sector is likely to grow to $427 billion by 2010, with organised retail accounting for about a fifth, and over $30 billion in investment is being planned by domestic and foreign players in retail over 5-7 years, FICCI said.
February 25, 2008
Source: Economic Times
Govt may consider FDI in specific retail sectors: Nath
The government may allow Foreign Direct Investment for specific sectors such as electronic and sports goods in retail if an expert study going into the issue foresees no impact on the neighbourhood mom and pop stores.
"We are expecting the ICRIER report on retail by the end of February. Certainly, we can be more flexible in areas of retail like electronics and sports goods. But, I want to see the whole report and make sure what I believe is correct and is backed by a report," Commerce and Industry Minister Kamal Nath told PTI.
Nath said he had commissioned the Indian Council of Research in International Economic Relations (ICRIER) to come out with a study on retail to understand the impact of big retail on the small shops.
"Until I have the ICRIER report, I cannot do (open) retail. I have got to ensure these basic things. The point is that the neighbourhood store should not be hit," he said, adding that the retail has to be seen in a totally India- specific context and not in a general sense.
"Retail in India is not like retail in Malaysia or Thailand," he said.
However, opening sectors like electronics, sports goods, pharmacy and confectionery to FDI would not have an impact on the neighbourhood stores but would instead drive the Indian industry, Nath said.
February 8, 2008
Source: Economic Times
Catalogue-shopping a hit in metros
Big retailers seem to have hit upon a smart way to keep their cash register ringing by attracting customers through catalogue-shopping.
For the first time, Hypercity Retail India Ltd, along with Shoppers' Stop, has entered into a franchise agreement with the UK-based Home Retail Group, Argos, to offer multi-channel shopping experience to its customers. Hypercity Retail India would offer this facility under the brand name of Hypercity Argos.
"This unique format of catalogue shopping is definitely suited for metros like Mumbai where retail space is expensive and has been a deterrent for retailers to reach out to a larger consumer base in a cost-effective manner," Hypercity Retail's CEO, Andrew Levermore, said.
Hypercity Argos' integrated multi-channel capability encompassing stores, home shopping and the Internet, would provide consumers a new horizon to shopping, he said.
The firm has launched its business with five stores in Thane and would be opening more stores by the end of the first year, Levermore said.
February 3, 2008
Source: The Times of India
High realty costs make catalogue-shopping a hit
Following, Hypercity Retail India Ltd and Shoppers’ Stop; the Bombay Store, is also planning to provide catalogue shopping facility in the next few months.
“It is too early in India, although internationally, it is a well-known concept. It will definitely take-off in the coming years,” Bombay Store managing director Asim Dalal said. While he does not plan to launch catalogue-shopping immediately, he said, “We will be launching it in the next one year.”
However, Mukesh Ambani-led Reliance Retail said it has no immediate plans to launch this offering. “We at Reliance Retail are not planning catalogue- shopping in near future though it is a growing field. Major retailers should do well looking at the stupendous growth patterns,” said Manu Kapoor , head of Reliance Retail Corporate Communications.
Though nascent in India, the catalogue shopping segment is huge overseas. The US market is estimated at around $180 billion, while the European market is pegged at around e50 billion.
February 5, 2008
Source: Business Standard
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