Retail News October 2007

Big players – Plans and Investments: Dutch retail firm, World Gold Council, Future Group bets, Bombay Dyeing to redo, HomeTown to open 6 new stores

General Trends & Information: Big retail still gung-ho, Kirana stores, Assocham urges government, High rentals slowing, Sunil Mittal recommends, Retail will create

International: LVMH to invest, Adidas brings its lifestyle, Gucci launches, Mary Kay Cosmetics, Benetton’s Sisley, Carrefour in talks, Seven-Eleven Japan

Support Industries: Foreign support firms, New Zealand firms keen on selling, French trolley

Regional Trends: Bangalore is out of retail, Chennai retail mall space, Reliance opens retail stores

Food & Grocery: Vishal Retail to open quick, Sweet World to step up

Apparel & Footwear: Provogue to open 40, High rentals leading, Reebok targets women, Apparel brands, Park Avenue launches

Lifestyle & Luxury Retailing: Dabur’s H&B Stores, Louis Vuitton wants a feel

Government Policy/Public Protests: Indian Retail Protest, Reliance Retail fires 400, Political opposition, Global retail firms peeved

e-Commerce: HP enters retail photo, Hotel bookings

Big players – Plans and Investments

Dutch retail firm ties up with Landmark Group

Dutch retail giant SPAR has tied up with Landmark Group for hypermarket foray in India. The $37-billion behemoth has signed a licensing agreement with Max Hypermarkets India, a part of Landmark, to set up big box shops under the SPAR brand.

The first SPAR hypermarket, spread across 70,000 sq ft, has been launched in Bangalore. SPAR International had earlier tried entering India with Mumbai-based Radhakrishna Foodland, but the tie-up feel through. SPAR International is currently present in 34 countries, across different formats — convenience stores, supermarkets and hypermarkets.

SPAR will handle the merchandising and display for the chain. The hypermarket will also have its own products under the brand SPAR. It is believed that landmark had earlier explored tie-up options with several global retail giants, including UK’s Tesco.

Meanwhile, Landmark group, which operates 12 Lifestyle Stores, five Lifestyle Home Centres, one Baby Shop and 10 Max stores in India, plans to invest $500 million on expansion plans over next three years. This investment includes expansion of its retail, hypermarkets, leisure and hospitality businesses in India. Landmark looking at adding 26 Lifestyle, 10 Home Centres and 50 Max stores in next four years.

October 6, 2007
Source: Economic Times

Reliance Retail, Subhiksha may modify back-end plans

The outcry from farmers and the traders lobby across several states appears to have upset the organised agri-retail applecart for a whole cluster of retail majors. Nearly all of them, including Reliance Retail, Subhiksha and Spencer’s are treading the ground carefully.

Mum’s the word at an official level. But information trickling in from the industry indicates senior executives are getting into a huddle in trying to thrash out future course of action. Some options under review include reworking the existing sourcing mechanisms and fate of the front-end expansions as well as of the proposed investments in the supply chain.

Reliance Retail is exploring options to modify its back-end plans. The company, with a nationwide network of some 100-plus collection centres for direct sourcing of agricultural produce from farmers to achieve price competitiveness, has started tapping mandis for such farm produce. Though a Reliance Retail spokesperson declined to comment, company officials said sourcing from the mandis would further gain steam till the situation becomes normal.

Subhiksha too intends to engage itself with all its stakeholders. “In absence of any clear policy guideline from the government, we have to be flexible in our business model. Though not a much preferred option, we may even work with middlemen in the back-end and derive efficiencies from it,” Subhiksha managing director R Subramanian said. “Any deviation from such direct sourcing models may not be a pragmatic approach since a retailer needs to have a certain level of control over the supply chain.

October 4, 2007
Source: Economic Times

Reliance cuts troubled retail plans further

Reliance Industries Ltd has ended the services of about 400 franchisees for its planned retail operations in West Bengal and has shelved a rollout in neighbouring Orissa because of protests from small traders.

The moves come after Reliance Retail, a subsidiary of India's biggest listed firm, last month laid off 1,000 staff in northern Uttar Pradesh after the state shut 10 Reliance Fresh supermarkets, following protests and attacks by small traders.

There have also been protests in other, mostly northern and eastern states, while communist-ruled southern Kerala state is drafting a law to restrict Reliance to protect jobs.

October 3, 2007
Source: Economic Times

World Gold Council to help source gold for Reliance Retail and Pantaloon

In an effort to boost demand of retail gold in India, the World Gold Council announced that it would be helping top retailers such as Reliance Retail and Pantaloon to source and market its gold jewelry. According to Philip Olden Managing Director of WGC, "We are negotiating with Reliance Retail and Pantaloon to provide marketing programme and identify as well as source gold jewellery from manufacturers in India and abroad to Reliance Retail and Pantaloon."

WGC sees India as a critical market and wants to have collaborative initiatives that will further increase sales of gold products in the country. WGC hopes to not only increase sales of gold in India, but also to improve and transform the way that the gold market functions here. At present, it spends an estimated $16 million on marketing initiatives in the country and has 12 Indian partners, with major companies such as D’Dmas and Tanishq being the most prominent.

September 27, 2007
Source: The Economic Times

Future Group bets big on Home Solutions

The Future Group’s home division is expected to be the largest contributor of the group’s revenue for this financial year. Home Solutions Retail Ltd, under which Home Town and E-Zone operate, are growing at 70-90% and Home Town is expected to have a turnover of Rs. 200 crore this year, making it one of the most profitable divisions of the company.

Home Town is a home improvement store that stocks everything to do with products for the home, but is not really comparable to Ikea where consumers need to assemble products themselves. According to Jacob Mathew, founder and director of Idiom Design and Consulting, the in-house design company for Future Group, Home Town is targeted at women shoppers and follows a “Don’t-do-it-yourself” principle.

One of the winning features of Home Town is that they have an in-house financing option where consumers can take a loan at 0% interest rates. According to Rakesh Makkar, CEO Future Capital Holdings, about 30-40% of Home Town customers take this offer.

September 28, 2007
Source: The Hindu Business Line

Reliance Retail readies its apparel division launch

Reliance Retail is expected to launch its new apparel stores in a few days and announce the name of its new venture. The first store is set to open in Gurgaon in October and will stock 22 in-house brands that its team of 76 designers has been working on, for women’s wear, men’s wear and kid’s wear.

Some of the new brands that are to be introduced include DNM, a denim brand, Net Play, a sportswear brand, X Code, a casual wear shirt brand, and kids wear brands such as Sparsz, Panda and Pogo. Its women’s wear section will offer brands such as Grip, Network and Enamor.

While competitors such as Future Group have tied up with international lingerie brands such as Etam, Reliance will be creating its own line of lingerie and has appointed an expatriate to head the lingerie operations.

The company has also formed agreements with well-known brand names such as Lee, Wrangler and John Players that would be supplying their own sub-brands that will sell exclusively in Reliance stores. Wrangler has created a special label called Wrangler X that will be only for Reliance stores, as has ethnic wear brand Biba.

After it’s first store in Gurgaon in October, additional stores will be opening in Delhi, Bangalore, Mumbai and Hyderabad. In total, there are expected to be 110 standalone stores for apparel. The company’s apparel business will be headed by Arun Deshmukh, who has joined after the exit of Sriram Srinavasan, who joined from Indian Terrain.

September 29, 2007
Source: Business Standard

Trent looks to tie up with 3-4 premier apparel brands

Tata Group’s retail venture Trent is looking to tie up with 3-4 premium brands so that it is able to make more of an impact in the high-end segment. Its latest tie up has been with the Benetton Group’s Sisley brand for which it will be the master franchise for India for the next five years.

According to Noel Tata, managing director of Trent, the company is very serious about participating in the rapidly expanding premium segment in the country. It has already made an impact in the mid-market segment with its Westside and Landmark brands and in the mass-market segment with its Star Bazaar hypermarket division.

September 19, 2007
Source: Business Standard

DLF holds talks with international luxury brands

India’s largest real estate group DLF announced that it has been holding talks with some of the world’s best-known luxury brands and hope to bring in some of them to India. While there have been news reports about the company’s impending tie-up with Carrefour, a company source said that DLF will first tie up with luxury retailers and only then think about entering the supermarket business.

The company has held talks with Giorgio Armani for which it is likely to have a franchise agreement, and with Dolce and Gabbana with which it will have a 51:49 joint venture. Pia Singh will head DLF’s retail business.

September 19, 2007
Source; Economic Times

Future Brands to develop private labels

Pantaloon Retail’s subsidiary Future Brands will be developing private labels and turning them into “strong brands”, which will eventually be moved outside the company’s retail stores to standalone stores.

The company has about 15 such labels already in a variety of segments, such as John Miller, Bare Jeans and Buffalo in apparel, Tasty Treat in snacks, Dreamline in the home segment and Koryo in consumer durables. These private labels already contribute to 10-12% of the group’s sales, showing their strong potential for further growth or Rs. 600 crore last year.

According to Santosh Desai, MD and CEO of Future Brands, most consumers are still not familiar with brands and the company is making all efforts to push their own brands to them via mainstream advertising and making a connection with consumers.

The first of the brands that will get a big push will be John Miller, which is one of their best selling brands. The company hopes to convert all of its 15 labels into strong and effective brands in their own right that can sustain standalone stores in the near future.

September 21, 2007
Source: The Hindu Business Line

Reliance Retail to open its first apparel store

Reliance Retail will debut its much anticipated apparel store later this month in New Delhi and will open another 10 stores by the end of the year. These stores will stock around 4,000 products covering 94 brands in men’s, women’s and kid’s wear, all of which have been manufactured exclusively for Reliance.

With 211 designers and a large number of tie ups with apparel manufacturers for its merchandise, Reliance Retail seems to be all set for a winning formula of offering something that is not available anywhere else and at great prices as well.

Since it’s highly publicized entry into retail, Reliance has nine product formats and will also be launching Reliance Footwear, Reliance Lifestyle and Reliance Auto. The company seems to be covering all segments of retail and is building its stock of private labels to increase profit margins and decrease dependence on outside brands.

September 21, 2007
Source: Business Standard

Reliance Retail to launch Reliance Lifestyle

The roll-outs and launches continue, this time it is the announcement of Reliance Lifestyle, that will cover the entire gamut of lifestyle products such as cosmetics, watches, home accessories, books, optics, photography and much more. The company will be setting up 123 Reliance Lifestyle stores covering an area of 21,000-28,000 sq ft each.

Stores will be located in major cities such as Delhi, Hyderabad, Bangalore and Mumbai initially and in tier I and tier II cities subsequently. Surender Gnanaoliyu has been appointed as the vice president for the lifestyle business merchandising and will handle all lifestyle store operation in the country.

Products will be sourced from major brands such as Procter & Gamble, Breitling, Perryroche, Kolber etc, but the company will also have it’s own private labels as well. ORG Gfk estimates that the market for lifestyle stores is increasing by 14% each year, and with limited players in the market as yet, the segment has great potential for growth.

September 22, 2007
Source: DNA India

Birla Group to increase More stores by 300

The Aditya Birla Group is expanding in a big way and announced that the company will be opening at least 300 More stores in the next two years in the state of Gujarat alone. Around 50 of the new stores are to open by the end of the 2007-08 financial year and will follow the format set it’s supermarket stores in cities such as Ahmedabad, Vadodrara, Mehsana etc.

Around 10 More stores ranging between 3,000-6,000 sq ft are to open in the Ahmedabad area and will stock items in four main areas of merchandise: fruits and vegetables, staple foods, processed foods and snacks and apparels.

Besides Gujarat, the company is also focusing on opening 15 new More stores in the city of Mumbai every month. With five stores in the city at present, the company hopes to bring its tally to 75 stores by the end of the year. In the city of Pune, where it began its retail venture, the company plans to have 45 stores in operation by the end of the year.

September 13, 2007
Source: Business Standard

Bombay Dyeing to redo its retail outlets

Bombay Dyeing announced that it will be going through a major makeover of its stores in this financial year and will be investing around Rs. 60 crore over the next three years in its business. New stores are to be completely different, with a new architectural style, interior design, graphic design and an entirely new brand to create its own overall brand experience.

The company will be renovating its 450 stores and will be setting up a new flagship store that will carry its entire range of textiles, as well as its high-end luxury products. The company will also be introducing khadi home furnishing items in its stores, according to Ness Wadia, joint managing director of Bombay Dyeing.

September 15, 2007
Source: Business Standard

Trent opens its first hypermarket in Mumbai

Tata’s retail division Trent opened its first hypermarket Star Bazaar in Mumbai in the suburb of Dahisar. The hypermarket will cover an area of 50,000 sq ft and will stock a range of food, apparel and household products. With fashion apparel starting at only Rs. 99, the hypermarket is making no bones over its emphasis on prices to win over the customer.

Most of the apparel labels are in-house and have been sourced from across the country. This is the company’s second outlet, with the first Star Bazaar opening in Ahmedabad in 2004 and a third outlet being planned for Bangalore in the next few months.

September 14, 2007
Source: The Hindu Business Line

Reliance Retail bets on exclusivity

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

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

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

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

September 11, 2007
Source: Economic Times

HomeTown to open 6 new stores by December

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

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

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

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

September 10, 2007
Source: Hindu Businessline

Reliance Retail plans foray into jewellery

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

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

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

September 9, 2007
Source: Financial Express via Moneycontrol

Subhiksha to set up Mandis

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

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

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

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

September 6, 2007
Source: Economic Times

General Trends & Information

Big retail still gung-ho on expansion

Even in the face of protests from trade groups, escalating real estate costs and pressure on margins, the march of domestic retail chains continues unabated.

Led by Reliance Retail, Pantaloon, Subhiksha and Spencer’s, these retail businesses are going ahead with their plans to set up about 2,500 stores, which, according to Technopak Advisors, will entail an investment of Rs 20,000 crore by December next year.

Organised retail in the country is growing at 30-40 per cent a year, according to management consultancy firm PricewaterhouseCoopers, fuelled by robust 9 per cent economic growth that is putting more disposable money in consumers’ pockets

October 10, 2007
Source: Business Standard

Kirana stores are still the most popular type of shops

While local merchants protest furiously against the entry of large scale retail companies, Euromonitor International has released a study that shows that local kirana stores are the number one source for shopping for the majority of consumers, and account for 98% of all grocery sales by value.

While there has been an impact on sales due to modern retail formats opening up, their contribution is rather negligible at the moment. There are 11 million kirana stores in the country and as a whole they are performing much better than the larger grocery stores due to the sheer number of stores.

According to Umesh Madhavan, senior research analyst at Euromonitor International, “Over the next five years, kirana stores are expected to continue to co-exist with modern grocery retailers as the total grocery retail pie expands, though the share of modern grocery formats within grocery retailing is expected to increase to 5 per cent by 2011.” One way for larger grocery stores to win customers from kirana stores is to open smaller versions of their stores in residential areas and followed similar systems such as free home delivery and credit systems that kirana stores offer.

October 01, 2007
Source: Business Standard

Mall owners and retailers go in for revenue sharing model

Mall developers have started to offer a revenue sharing model of operation to retailers in an effort to improve occupancy levels. The high cost of real estate has led to retailers cutting back on expansion as well as profits. Interestingly, retailers have been proposing a revenue sharing model of operation to mall developers for quite some time now, so that both parties can share both the profits as well as the risks.

DLF has proposed a review sharing agreement with retailers in its malls and has tied up with Westside for its malls, for which it will get a certain percentage or a minimum amount guarantee, whichever is the higher amount. The company does not have any plans to offer such an agreement to all retailers as yet though.

According to Ajay Khanna, DLF Retail senior executive director, “The revenue-sharing model can work only if mall developers get access to the books of retailers. There has to be a guarantee that numbers would not be manipulated. Unless that credibility is established, the revenue-sharing model may not take off.”

September 28, 2007
Source: The Economic Times

Retail FDI could come in the near future

Finance Minister P Chidambaram said that retail FDI could happen in the near future, especially once mom-n-pop stores realize that their jobs and livelihoods are not at risk from large retail companies. Speaking at the Wharton School of Business at the University of Pennsylvania, he added that "In course of time their fears will be allayed and it is only a matter of time before the policy is tweaked to allow FDI in retail." There has been a lot of opposition to allowing foreign retailers into the country, especially from small traders, middlemen who are being left out of the supply chains etc.

September 27, 2007
Source: Yahoo News

Assocham urges government to reopen Reliance Fresh stores in UP

Industry body Assocham is urging the UP government to reopen Reliance Fresh stores in the state and is also asking Reliance Industries Chairman Mukesh Ambani not to exit from the state in a rush, as it would have far wider repercussions. According to a statement released by Assocham, "The UP government should withdraw its earlier order of closing down Reliance-owned retail stores, otherwise the decision will be seen and interpreted as a clear case of selective victimization and will also have impact on future investment inflows." If the stores continue to remain closed, the issue becomes more politicized and complicated, which might lead to a more intense situation that there already is.

September 26, 2007
Source: The Economic Times

Organized retail to create 2 million jobs in next 2 years

The retail industry is growing at a fast clip of 30% annually and is expected to provide up to 2 million jobs over the next two years. According to a study conducted by Elixir Web Solutions, the growth of the retail sector will translate into employment for millions of workers. An interesting insight to the study is that more than half of the workers in organized retail will be women.

At present the Indian retail industry employs over 21 million people and consists of 13% of the GDP. The retail industry in India is valued at $300 billion and likely to grow to $427 billion by the year 2010, becoming the second largest employer in the country after only agriculture.

The key factor of the retail industry is to be maintaining quality standards that will lead to companies to hire the best and put a lot of emphasis on training employees.

While it is the young who are pushing the retail industry forward due to higher amounts of spending power, a rise in the standard of living and a larger number of working women, challenges such as sky-rocketing real estate costs, dearth of skilled retail professionals and saturated merchandise supply lines need to be taken care of.

September 22, 2007
Source: The Economic Times

High rentals slowing retail expansion

The rapidly increasing rentals are putting a dampener of expansion plans for Pantaloon. According to Mayur Toshniwal, vice president and business head for the northern region for Pantaloon Retail, the company’s expansion plans for new cities is facing problems as there are very few good properties available at good rental prices.

According to a study by Jones Lang LaSalle, rentals in prime locations in Indian metro’s rose the fastest in the Asia Pacific region, with Delhi rentals increasing by 40% from a year before and Hyderabad rentals increasing by 76.5% over the previous year.

The high cost of real estate is also reducing profit margins according to S Ranganathan, chief of operations for Shoppers Stop. He estimates that there is likely to be shortage of retail space to the tune of 40 million sq ft in the next five years. Despite the high costs of real estate, there are new entrants to the retail segment constantly, showing the enormous potential of the industry.

September 21, 2007
Source: Reuters

IFA to set up co-op to compete with organized retail

The tussle between big retail and small traders continues on. The latest is that the Indian Farmers Association (IFA) announced that it is planning to set up a farmer-trader alliance to compete with large organized retailers. Interestingly, it has been the farmers who have been very happy with the advent of organized retail, as they have been able to get better prices by cutting out the middlemen such as the commission agents.

Leader of the IFA, Mahendra Singh Tikait, however feels that this is only a short-term benefit, as the farmers will again be in the clutches of the retailers as they were with the commission agents earlier, and the only way to beat the retailers is to compete with them instead.

So far, 2.5 million farmers in the states of UP, Bihar, MP, Punjab and Haryana have joined the IFA. The Bhartiya Udyog Vyapar Mandal (BUVM) will float the co-operative. BUVM is the largest traders association in the country. BUVM plans to match the scale of the larger retailers and hopes to pay their farmers higher prices.

September 12, 2007
Source: The Economic Times

Malls to double 2010

The number of malls in the country is said to cross 400 by 2010, double of current number of malls. According to a new study, ‘Malls in India 2007’ conducted by Images Retail; the country will have 412 malls covering 205 million sq ft of retail space by the year 2010, which will increase to 715 malls by the year 2015. Major developments are to take place in smaller cities, with tier II and tier III cities to have a large number of these malls.

According to the study, North India will account for 39% of the malls, the West 28%, South 24% and East 9%, which still shows that there is scope for expansion in some regions. Malls in the national capital are expected to increase from 28 in 2006 to 79 in 2010, while in Mumbai malls are said to increase from 30 in 2006 to 68 in the year 2010.

September 14, 2007
Source: The Economic Times

Large scale retail will not affect kirana stores

There has been an unending debate on the impact of large retail on local mom-n-pop stores, which hopefully will come to an end with this new research. According to a new study released by the Indian Council for Research on International Economic Relations (Icrier), big retail will not harm kirana stores.

This new study is to be submitted to the Union government by September-October 2007, found that large retail stores have coexisted with smaller mom-n-pop stores for several years and have not harmed the kirana stores in the least.

RPG Group’s Spencer’s retail stores have been operating in Chennai for over ten years and have flourished alongside the local stores. The key factor to understand is that when a large mall or retailer opens in the neighborhood, local retailers want to upgrade, but are unable to do so due to unavailability of credit. This really is the extent of the unfairness of the situation, and once credit is made available to local mom-n-pop retailers, they will feel more able to compete with larger stores.

September 14, 2007
Source: Indian Express

Sunil Mittal recommends going slow on retail FDI

The chairman of Bharti Enterprises, Sunil Mittal thinks that the country should go slow on retail FDI. At a meeting of the business chamber’s national executive committee, he said that we should wait 7-10 years to see how Indian companies deliver and make decisions on retail FDI only then. His company Bharti Enterprises has formed a joint venture agreement with Wal-Mart and he is also the chairman of the Confederation of Indian Industry (CII).

September 17, 2007
Source: Telegraph India

Retailers eye health and beauty segment

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

And it is not the only company looking to create a presence in the health and beauty retail segment. Several retailers in India are in the process of testing or entering the Rs 25,000 crore personal care retailing segment, which is among the fastest growing retail segments according to AT Kearney, a management consulting company.

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

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

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

Sept 10, 2007
Source: www.livemint.com

Retail will create 3.5 m jobs’

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

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

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

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

September 5, 2007
Source: Hindu Businessline

Organised retail needs to involve small store owners’

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

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

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

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

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

September 6, 2007
Source: Hindu Businessline

International

LVMH to invest $500-600 million in India

Louis Vuitton Moet Hennessy (LVMH) announced that it would be making an investment of $500-600 million in a private equity fund in India for its brands and retail stores. Ravi Thakran LVMH President for South, South-East and West Asia operations, said that the group was also in talks with real estate developers such as DLF to acquire land for developing luxury destinations spas and entertainment areas.

The private equity fund is to be launched by L Capital Partners of LVMH in 12 months. The company hopes to open another 25 outlets in the country as well, Sephora, LVMH’s beauty and cosmetics brand is likely to open in India by next year.

September 23, 2007
Source: The Economic Times

Adidas brings its lifestyle brand to India

German sportswear retailer Adidas launched its lifestyle brand, Originals in its Indian stores and announced its intentions of launching two of its other brands in India as well at a later time. Adidas is currently focusing its attention on the top 4-6 metros of the country, and plans to open at least 6 standalone Originals stores. The first of these stores was opened in New Delhi on Wednesday, September 12th, 2007.

According to Andreas Gellner, Managing Director of Adidas India, the Originals brand is one of Adidas’ premium brands and therefore it will be available only in the metro cities. For women, the company plans to launch a Stella McCartney range along with its Y-3 collection that has been designed by Yohji Yamamoto, a well-known Japanese designer.

The company is looking for the Originals brand to contribute towards only 5% share of total sales, compared to a 30% contribution in overseas markets. At present, Adidas has more than 200 outlets in India, and hopes to have 250 open by the end of the year.

September 13, 2007
Source: The Hindu Business Line

Gucci launches in India

Gucci made its grand debut in India with the opening of its store at Hilton Towers in Mumbai, a 3,400 sq ft space that is the largest single-brand luxury store in the country. The company has brought its entire collection of up market goods to India, including ready-to-wear, handbags, shoes, belts, gifts and much more.

AC Nielsen’s global survey in 2006 revealed that the Gucci brand was ‘the most coveted luxury brand’ for Indians, making its entry to the Indian marketplace one of the most anticipated events. Gucci’s entry to India will also make it harder for the copycats to market their products, as the company has created hard to copy techniques in its materials and designs.

The Murjani Group, who has obtained an exclusive license for its operations across the country, is responsible for bringing Gucci to India. The company also has similar arrangements with other luxury brands such as Jimmy Choo and La Perla in the country.

September 13, 2007
Source: Business Standard

Mary Kay Cosmetics plans to invest in India

Mary Kay ladies and their pink Cadillac’s are famous across the world and will soon be coming to India! Mary Kay Cosmetics announced its plans to invest $20 million (approximately Rs. 80 crore) in India to set up centers, develop a product portfolio and to train consultants across the country. The company already has introduced 60 products specifically for the Indian market via its subsidiary in the country, Mary Kay Pvt. Ltd. and has opened a beauty center to train consultants in New Delhi.

According to KK Chua, President of Mary Kay Pacific, the company will be investing around $6-7 million for the first year of operations in India. The company stands third in terms of market share in China and anticipates reaching a similar position in India as well. Internationally, Mary Kay has 1.7 million beauty consultants working in 30 countries who generated around $2.25 billion in 2006.

September 13, 2007
Source: Business Standard

Benetton’s Sisley stores to be run by Trent

Tata’s retail division Trent announced that it will operate the Benetton Group’s Sisley stores across India and will expand the brand in the country as well. According to Noel Tata, managing director at Trent, the Sisley brand has a “high potential for growth” and Trent will use its experience of the market to create a winning situation for Sisley. At present, Sisley has three stores in New Delhi and new stores are to open in Hyderabad and Bangalore in the next few months.

September 18, 2007
Source: The Economic Times

Carrefour in talks with DLF

French retailer Carrefour who had earlier shelved plans to enter the Indian market is now in talks with leading real estate developer DLF. The world’s second largest retail company is having a hard time convincing DLF to stick to its rigid guidelines and agreement. While both company have declined to comment, the fact that talks are being held between them is very clear, but whether these talks amount to anything still remains to be seen.

Carrefour is also said to be in touch with the Anil Dhirubhai Ambani Group (ADAG) as well as the Essar Group. Carrefour is not necessarily looking for a partner with retail experience, but a company with some political clout, with strong networks, as well as a company with access to prime real estate.

Carrefour has been in talks with several Indian companies, including close deals with the Bharti Group, the Dubai based Landmark Group, the Tata’s, Bombay Dyeing as well as the Future Group.

September 18, 2007
Source: The Economic Times

Seven-Eleven Japan looks for entry point

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

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

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

September 8, 2007
Source: Economic Times

Support Industries

Foreign support firms ride on Indian retail saga

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

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

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

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

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

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

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

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

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

September 7, 2007
Source: The Tribune

New Zealand firms keen on selling retail tech to India

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

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

September 7, 2007
Source: Hindu Businessline

French trolley co to set up local unit

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

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

September 5, 2007
Source: Hindu Businessline

Regional Trends

Bangalore is out of retail space

Bangalore has run out of retail space according to a new study by Jones Lang LaSalle. Vacancy rates dropped to an all time low of 0.3% during the April to June 2007 period, compared to a 16.3% occupancy level in the NCR, a 8.6% rate in Mumbai, 5% in Chennai and 0.8% in Hyderabad.

Bangalore is the country’s second fastest growing city and the available retail space is simply running out. At present the total retail space in the city is estimated to be around 2 million sq ft, which is low compared to similar cities.

The city has long been the number one destination for international brands due to the high number of expatriates in the city, and now local chains such as Reliance Fresh, Subhiksha, Food World and Fab Mall are all on an expansion drive in the city as well.

Rentals in the city are expected to increase by 10-15% in the next two quarters, especially for professionally managed mall spaces. There are several projects in the pipeline, including the UB City Mall that will be located in the heart of the town and will cover 120,000 sq ft of space.

September 15, 2007
Source: The Economic Times

India: HomeTown to revolutionize way Hyderabadis shop for their homes

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

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

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

September 10, 2007
Source: www.fibre2fashion.com

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

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

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

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

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

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

September 7, 2007
Source: Hindu Businessline

Reliance opens retail stores in Jamshedpur

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

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

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

September 7, 2007
Source: Economic Times

Food & Grocery

Vishal Retail to open quick service restaurants

Retailers are trying their hand at a variety of formats these days, and Vishal Retail is all set to open a chain of 10,000 quick service restaurants across the world, that will stock Indian snacks and will be generally be modeled after McDonalds.

There will also be some of these in destination areas that will combine retail and entertainment that the company establishes on the highways in India. So far, 25 of such projects are being planned, which will cover 10-20 acres and will have a full range of retail stores, spas and water parks.

In its main line of business, Vishal Retail will also be opening 100 new stores in the next few months with an investment of Rs. 200 crore. Upcoming stores will be both large format, covering 25,000-30,000 sq ft and small format, covering 5,000 sq ft of space. Vishal Retail has 54 stores at present in 42 cities, covering 140,000 sq ft of space.

September 22, 2007
Source: Business Standard

Sweet World to step up presence

Sweet World, the Mumbai-based chain of candy stores marketing a range of imported candies, is planning to enhance its presence across the country.

The company, which inaugurated four outlets for its international Pick ’N Mix candies in Gujarat last month, is setting up four to five kiosks every month to take its current tally of 35 to 60 by the end of 2007, Ms Vrinda Rajgarhia, Director, told Business Line.

Sweet World, which pioneered the international concept of pick-and-mix candies in India in October 2002 by setting up its flagship outlet in Mumbai, imports candies from Belgium, the UK and other countries of Europe, besides the US.

Apart from the 250-odd varieties of confectionery it offers, it also markets about half-a-dozen sugar-free varieties to diabetic patients. The imported candies are priced at an average of Rs 60 per 100 gm.

The range of confectionery offered by Sweet World includes varieties of chocolates, candies, mints, lollypops and toys from around the world.

The candy market in India is estimated at Rs 3,000 crore, including confectionery (Rs 2,000 crore) and chocolates (Rs 800 crore), with an annual growth rate of 10 per cent. India with a population of 110 crore has a per capita consumption of Rs 27 which is likely to grow further with the rising income and consumption levels.

Sweet World has seen an annual growth of 50 to 70 per cent over the last four years.

October 8, 2007
Source: Hindu Businessline

Apparel & Footwear

Provogue to open 40 additional outlets this year

One of the most popular apparel brands in the country, Provogue announced that it will be opening 40 new stores this year and will also be introducing new categories in its stores. A new store is set to open every ten days, with an investment of Rs. 500,000-600,000 each.

Provogue will also be expanding its discount format stores Promart in tier II and tier III cities. At present, there are two Promart stores, one in Ahmedabad and one in Indore. Four new Promart stores are being planned by the end of this financial year.

The company also introduced its bed and linen segment as a pilot project at its Mumbai stores and plans to add more categories, especially those that compliment its products and meet the requirements of its clients. Currently, there are 116 Provogue stores in 61 cities.

September 21, 2007
Source: Business Standard

High rentals leading to slower expansion of fashion brands

The sky rocketing rentals are causing fashion brands to slow down on their expansion plans. Several newly opened stores are still working to cover their costs and there are likely to be many who will not make it past the first few months of next year.

With rentals accounting for 25-30% of the cost base for fashion brands, and 45-50% for standalone stores, the chances of being successful are rapidly falling for many retail stores. Single brand fashion stores usually have a 15% rental cost in the international arena, making Indian fashion retail one of the most expensive propositions in the world.

According to Sailesh Chaturvedi, CEO for Tommy Hilfiger in India, there has been an indication that rental prices will be slowing down which should come into effect in the next 4-6 months. Arvind Mills is one company that is working on getting the right mix of low cost street stores with expensive high street stores, to balance the rental cost and store sales.

September 19, 2007
Source: The Economic Times

Reebok targets women customers

Reebok announced that it would be launching a campaign to target women customers in major cities such as Delhi, Mumbai, Kolkata, Bangalore, Chennai and Hyderabad. The new campaign revolves around the slogan “I am More” to signify that women are entitled to much more and to offer a way to empower them.

The new line will offer clothing for fitness wear but also for street and club wear. In a cross-promotional angle it has tied up with Café Coffee Day in Delhi, Bangalore and Mumbai as well as with VLCC and Tanishq jewelers for vouchers.

September 13, 2007
Source: DNA India

Apparel brands embrace larger sizes

Fashion is not just for skinny models and here is proof that retailers think of their larger sized customers as well. The plus size apparel segment is estimated to grow at least 15%, which is making retailers realize its huge potential. Major retailers such as Pantaloon Retail, Westside, Madura Garments are all creating their own brands of plus size stores such as Just My Size, Axara, Revolution and Straps.

According to Chandan Widhani, director of Just My Size, their survey revealed that 38% of urban women could be classified as obese, while 28% of men fall into the obese category. That accounts for close to 33% of the Indian population, so the growth of this segment is a given.

This segment traditionally went to the local tailor who made clothes for them on order. Unfortunately, these cannot be compared in style or quality to what is now available at retail stores. What has changed, is that retailers are now specifically making clothes for this segment and are targeting them through their own brands such as ALL, which is Pantaloon’s brand or GIA which is Westside’s in-house brand.

September 16, 2007
Source: The Economic Times

Park Avenue launches brand for women

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

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

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

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

September 10, 2007
Source: Hindu Businessline

Lifestyle & Luxury Retailing

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

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

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

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

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

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

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

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

September 11, 2007
Source: Sify Walletwatch

Louis Vuitton wants a feel of Indian luxury

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

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

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

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

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

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

September 7, 2007
Source: Business Standard

Government Policy/Public Protests

Indian Retail Protest May Attract 100,000 Shop Traders, Vendors

As many as 100,000 Indian shop owners and street vendors may protest in Mumbai today against the entry of companies such as Wal-Mart Stores Inc. and Metro AG into the country, the rally's organizer said.

The protest also opposes the expansion of India's Reliance Industries Ltd. and Bharti Group into retailing and is against foreign investment in the sector, said Vyapaar Rozgar Suraksha Kriti Samiti in a statement. The organization represents about 750 unions and small business associations.

Expansion plans of Reliance, Pantaloon Retail India Ltd. and other retailers are being threatened as opposition intensifies from street vendors and family-run stores across India. Sales through store chains in the world's second-most populous country may increase by more than eightfold to $97 billion by 2012, according to consultant Technopak Advisors Pvt.

The Uttar Pradesh state government ordered the temporary closure of Reliance stores in two cities after a group of traders ransacked some of the company's outlets on Aug. 22.
Stores owned by Reliance and Subhiksha Trading Services Ltd. have also been vandalized in the eastern states of Orissa and Jharkhand. In the southern province of Kerala, the state government plans to restrict the number of stores that big companies can open.

Store chains will account for about 16 percent of total retail sales in 2012 compared with 4 percent this year, according to Technopak projections.

October 10, 2007
Source: Bloomberg.com

Reliance Retail fires 400 employees in West Bengal

Reliance Retail has let go of 400 employees from its operations in West Bengal, due to not being able to open its stores, since the venture has received stiff opposition from both political parties and local merchants in the state. According to a Reliance Retail executive, another 300 employees will also be fired in the near future.

After its decision to fire 1000 of its employees in the state of UP, Reliance Retail has had no option but to let go of its employees. In West Bengal, the company had a total of 800 employees for its Reliance Fresh outlets. Reliance Retail had planned an investment of Rs. 2,000 crore in the state to develop an agri-retail network, which has also faced stiff opposition.

Date: Monday, October 01, 2007
Source: Business Standard

Reliance Retail forced to shut shops in UP

Reliance Retail has been forced to shut its Reliance Fresh stores in UP due to violent protests and has fired 1,000 of its 2,800 employees in the state. The company has opened 50 stores in the state, but is not slowing down its expansion in other areas of the country. The protests against Reliance Fresh are not limited to the state of Uttar Pradesh alone; there have been protests in the state of Orissa as well, in its capital city of Bhubaneshwar.

Kerala on the other hand is banning all modern retail formats from its state and West Bengal is also causing opposition to the company’s retail outlets. While most opposition has been coming in the form of smaller traders who perceive that they will lose their businesses, consumers and farmers are happy with the way that modern retail formats function.

Date: Wednesday, September 26, 2007
Source: Yahoo News

Reliance Fresh shuts down in UP

The anti-modern retail bandwagon got its first dose of reality with the closure of Reliance Fresh stores in the state. The company handed out termination letters to 1,000 of its employees in the state as it prepares to leave the state. The company announced that it would be shutting down all 20 of its stores in the state, located in Noida and Ghaziabad. According to an insider of Reliance Retail, the company is being forced to exit the state due to the “vindictive approach” of the government.

The company has approximately 2,800 employees in the state, of which 1,000 have been let go of and the balance are said to be absorbed by the company in other locations. Its stores in Lucknow and Varanasi also had to be shut down last month due to opposition by local merchants, but the company was able to operate its Noida and Ghaziabad stores as they fall in the NCR area till earlier this week.

Reliance has been forced to close its stores in Bhubhaneswar in Orissa as well last week due to protests by local traders. It is interesting to note that modern format retailers such as Future Group’s Food Bazaar, Spencer’s and Subhiksha have been functioning for several years without any kind of protests, but it is only since the announcement of RIL’s plans for their retail venture that local traders have started to protest against modern retail formats.

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

Political opposition to retail short-term

Retailers everywhere have been surprised at the opposition to modern retail formats and suggest that this is only a short-term phase. R Subramaniam, managing director of the Subhiksha retail chain, will not be slowing down his expansion and opening 120 new stores in the state of Uttar Pradesh. Despite Reliance Retail having faced so many protests in Jharkand, Uttar Pradesh and West Bengal, the company still remains as positive about opening stores in the states.

The recent political opposition has been coming from politicians at the local level and not from the central government, so it’s not a question about “ideology”. Another interesting factor is that while several large retailers such as Subhiksha, Spencer’s and Food Bazaar have been operation for several years without any protests, it is only after the high profile entry of Reliance Retail that there have protests of these kinds.

Consumers by and large, are all happy with the entry of large retail firms in the food and grocery segment, as it saves money as well as time for shoppers. In some cases, the prices are lower by only a few paise, so the main reason for shopping at these stores is not saving money, but for the experience and atmosphere of it. Larger stores are also able to stock products in bulk and have a larger variety of items, another winning combination for consumers.

September 19, 2007
Source: Business Standard

Global retail firms peeved with FDI cap: PwC

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

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

September 7, 2007
Source: Hindu Businessline

e-Commerce

HP enters retail photo printing market, launches online service

Hewlett-Packard today announced entry into retail photo printing market and launched its consumer online photo service in India to capture the potential of digital photography and the country's swelling mobile phone and digital camera market.

The HP Retail Photo Solutions (RPS) would offer end-to-end digital photography services and the HP Snapfish website could store and share unlimited number of photos free of cost.

V Krishnan, GM, Consumer Sales, Imaging & Printing Group; (IPG), HP India Sales Pvt Ltd said that these would take digital photography to the 'next level'.

Snapfish will offer consumers free online photo sharing, unlimited online photo storage and professionally developed digital camera prints for as low Rs 2.95 (4x6 size). Snapfish will also provide for delivery of printed photos at the doorstep of the customer through HP outlets.
According to Industry analyst Gartner, the market size of digital camera in India was USD 110 million in 2006 and is expected to grow 20-22 per cent by 2011. The number of mobile users in India will be more than double in the next five years, growing from 185 million to 462 million by 2011.

October 9, 2007
Source: Economic Times

Hotel bookings? Click online is the way to go

Vacation at London, Paris or Patnitop… now hotel check-ins and the best deals anywhere in the world are just a click away!

Mr Anand Rao, General Manager, ITC Windsor – The Luxury Collection, Bangalore, says, “The influx of hotel bookings from the Internet is increasing rapidly. The Internet permits rate/ features comparisons between different hotels with a minimum effort and bookings made on the Internet generate immediate confirmations with no lead times involved.”

Take, for example, Travelguru, a travel portal with over 4,000 hotels in India and 72,000 hotels worldwide on offer. Mr Ashwin Damera, CEO and Founder, Travelguru, says there are more options available in every price-range on a travel portal. “This unlocks value for consumers and gives them alternatives to the conventional 4/5-star hotels.”

It’s a winning proposition not just for the customer. Mr Lemuel Herbert, General Manager, The Park, Bangalore, says hotels are increasingly feeling the impact of these portals on the hospitality industry. “Around 20-30 per cent of our business comes from the electronic media,” he says.

Mr Rao of ITC Windsor says travel portals are also influencing pricing strategies. “The ease with which travellers can now compare rates and amenities has made the pricing strategies of hotel companies more dynamic.” However, Mr Damera feels that as long as demand for hotel rooms is greater than supply, it may not be possible to bring down prices through any channel.

Mr Amit Saberwal, Vice-President for hotels business — makemytrip.com, says travel portals like his have helped the unorganised sector in the hospitality industry, especially serviced apartments, reach end-consumers when hotel rates hit the roof in cities like Bangalore; “hotels were forced to revise their rates downwards.”

But do customers get to enjoy the ‘early bird’ benefit through online booking? One needn’t necessarily book early to enjoy the benefit of low prices, feel industry players. The Web sites have dynamic pricing and hotels can change rates according to occupancy levels, says Mr Saberwal. “This generally translates into a benefit for online customers.”

It is this win-for-all situation that has ensured that hotels have a specific ‘quota’ for online booking through such portals.

Hotels like The Park have also tied up with Design Hotels, a consortium of hotels, for bookings.

October 9, 2007
Source: Hindu Businessline