Retail News September 2008

Big players – Plans and Investments: Vishal Retail, Reliance's retail biz, Titan to have 200 Eye, Trent plans, Reliance to push retail, Birla plans big, Wal-Mart 'cash & carry', Tesco enters

General Trends & Information: Slowdown is manna, Retailers Take a Slower Road, Malls’ day, High rentals, Retail giants focus, Indian retail sector

Regional Trends: Vimal unveils first Premium, Reliance Retail second, Get ready to splurge, Cherma’s to add, Phoenix Mills

Apparel & Accessories: RIL wants to be sourcing, Koutons Retail India, Reliance Footprint, Reebok India plans, Reliance Brands

Lifestyle & Luxury Retailing: Luxury brands prawling, Ferragamo, Piquadro set

Support Industries: Sequoia Capital, Bharti Retail and IBM Announce, Best offers on shopping

Big players – Plans and Investments

Vishal Retail plans big push on small formats;2k stores by '10

Diversified retail player Vishal Retail is going to give a big push to its small format stores with plans to set up 2,000 such outlets across the country by 2009-10.

The company, which has around 140 hypermarkets in 84 cities under the name of Vishal Megamart, is expecting the small format stores to contribute as much as 25 per cent to its overall turnover.

"We launched our first small format store at Indore last week. We are now planning to have 250 such stores across the country by end of the current fiscal and then take the numbers to 2,000 by end of 2009-10," Vishal Retail Group President Ambeek Khemka told PTI.

He said the small formats stores would all be under the franchise model and of 1,000-3,000 sq ft size. The Vishal Megamarts, on the other hand, are of 20,000-25,000 sq ft area.

"We are looking for a turnover of around Rs 180-200 crore from the new small format stores this fiscal," Khemka said. The new format stores would be located at metros, besides Tier II and III cities, he added. The small format stores would have different branding for different product segments.

"The FMCG stores would be called 'Vishal Daily Mart', while the apparel stores would be known as 'Vishal Fashion Mart' and the durables and IT stores would be called 'Vishal Technomart'," Vishal Retails Head, Franchise Operations, Dipankar Guha said.

While most of the investments would be made by the franchise operators, Vishal Retail would be funding the entire marketing and branding campaign which would "come to around two per cent of the topline investment".

September 1, 2008
Source: Economic Times

Reliance's retail biz to focus on private labels

Like all organised retail players, Reliance Industries’ retail business is also focusing on private labels. The CEO of its hypermarkets business, K Radhakrishnan, said they derive around 80% business in the large format stores from private labels, particularly in the garments business.

While its private labels in the commodity foods segment are Reliance Value and Reliance Select, it is launching, in a phased manner, private labels in the nonfood FMCG category. It has launched floor cleaning products under the Expelz label in Delhi earlier in the month, with plans to launch private label products in the personal care segment by September.

Like other players in organised retail, Reliance , too, is setting up stand alone stores, to cater to separate products. The first of such stand-alone stores in the household segment will be opened in Aurangabad, in September , called Reliance Houseware, a company spokesperson said.

It already has four stand alone stores, called Time out for books, music and gifts, three Reliance Footprints (for footwear), and Reliance Trends, for mens wear. Reliance Lifestyle, for furnishings etc, is another stand alone category that is being considered.

Mr Radhakrishnan said they will open their first hypermarket, a Reliance Super, in Mumbai in the Bombay Central area next week. He was speaking to reporters after inaugurating the company’s first hypermarket , a Mart, in Pune. This is its first hypermarket in the state.

Explaining the formatting of its hypermarkets , Mr Radhakrishnan said, “Stores that are between 10,000-25 ,000 sq ft are Supers while those over 25,000 sq ft are Marts, which is our highest category. We will open another Super in Pune by September, so that we will have one each of Super and Mart in Pune by December. By March, we plan to have a total of four hypermarkets in Pune, which is our first market in Maharashtra for the large format.”

August 30, 2008
Source: Economic Times

Titan to have 200 Eye Plus stores by 2010-11

Tata group company Titan Industries is embarking on a major expansion of its eyewear retail business with plans to have 200 showrooms across the country by 2010-11.

The company, at present, has 28 exclusive Titan Eye Plus outlets in nine cities and plans to add another 172 stores during the next over two-and-a-half years with a view to emerge as the leader in the estimated Rs 1,500 crore Indian eyewear market.

"We have just opened three showrooms in Delhi, taking the total number of showrooms to 28 across nine major cities. Our plan is to set up another 172 showrooms by end of 2010-11 and spread to more than 40 cities," Titan Industries Chief Operating Officer (Eyewear Business) S Ravi Kant told media.

He said around 85 per cent of the new showrooms would be of franchise model, while the rest would be company owned. Of the company's 28 existing stores, eight are company owned and the rest 20 franchises.

"The Rs 1,500 crore Indian market is witnessing a growth of around 15 per cent annually and we want to emerge as the market leader with at least 25-30 per cent share," he said. Titan Eye Plus is present in major cities like Mumbai, Delhi, Kolkata, Hyderabad and Bangalore. "Our plan during the next two-and-a-half years is to spread our presence into Tier II and II cities," Kant said.

August 28, 2008
Source: Economic Times

Trent plans Rs 2,000 cr investment for Star Bazaar expansion

Trent Ltd, the retail arm of the Tata group, is likely to invest around Rs 2,000 crore in the next five years for rolling out 50 Star Bazaar hypermarket stores.

"We will invest around Rs 2,000 crore in the next five years for the roll out of 50 Star Bazaar hypermarket stores, which is usually of around 50,000 sq ft," Trent's Chairman F K Kavarana said on the sidelines of the company's AGM on Wednesday.

"We are planning to have larger Star Bazaars which would be more than 50,000 sq ft," he added. The company also plans to add another 6-8 landmark stores by the next year.

At present, the company has around 18 stores operational, he said. On Westside, he had said the company has around 30 stores in 20 cities. About fund-raising, Kavarana said, "presently the company has no plans to do so".

The roll out plans, like in the previous year, continue to be impacted adversely due to the inability of developers to hand over premises in the contracted time frame, he said.

August 27, 2008
Source: Economic Times

Reliance to push retail in countryside

After having scaled up its retail operation in cities, Reliance Retail is now looking at rural India. It is piloting a rural-business-hub (RBH) model in a Gujarat village, which if successful and implemented could rival that of DSCL’s Hariyali Kisan Bazaar and Future Group’s Aadhar.

RBH would offer farm input, food, grocery, consumer durables, and financial and health services. It will also provide farmers a platform to sell their produce, an equivalent of village haat. A community hall and entertainment facilities will form part of the hub.

A typical RBH would be spread over 3-5 acre and require an investment of around Rs 5 crore, besides the cost of land, a Reliance executive told ET. It couldn’t be ascertained how much Reliance has earmarked for its RBH project, but the company executive said it could run into hundreds of crores. The company plans to set up at least 40 hubs in Gujarat alone in the first phase.

RBH will serve twin functions for Reliance rural retail as well as sourcing for its urban retail centres. RIL Chairman Mukesh Ambani has talked of fomenting agricullture revolution in the country and giving farmer their due by cutting middlemen and directly procuring from them for company’s retail stores. Reliance has over 40 collection centres in Rajasthan, Jharkhand, Tamil Nadu, Gujarat and Madhya Pradesh. The company feels rural hubs may not initially turn profits, but is banking on big volumes to sustain the business.

For its RHB business, the company aims to avoid difficult states such as UP, West Bengal and Bihar. Despite this, riding into hinterlands may not be easy for India’s biggest business house, as managing politics at village level is not that too easy, with each village being dominated by politics of a different hue.

August 27, 2008
Source: Economic Times

Reliance Retail goes on austerity mission

Reliance Retail, part of India’s largest private sector company Reliance Industries, has initiated an ‘austerity’ drive. The company has issued strict guidelines on unnecessary travel, mode of travel, courier despatches, use of stationery in office, use of cabs and type of accommodation while on tour, and even on the number of times employees can have tea and coffee. Senior managers have been asked to use AC Indica cars instead of luxury sedans on outstaion tours.

While Reliance Retail (RRL) is the focus of this cost-cutting exercise, a senior official said the austerity measures are being extended to the mainline oil and gas business as well. Although, there is no directive, there are advisories to cut down avoidable costs.

A Reliance spokesperson said: “We strongly deny any such development. Your information is baseless and false.” However, according to sources, RRL is taking its austerity drive very seriously and has described it as a “mission”.

In a communication posted on the internal RRL intranet, a senior HR manager of the company has said, “Let us stop all unnecessary and avoidable expenses, challenge every cost element and every person who is incurring it, and completely protect the interest of our organisation.” Had the company not been so serious, some of the cost-cutting measures would have sounded comical. It has decided to issue only blue and black ball pens. It will not give calculators, tissue boxes, gel pens and uniball pens. Employees are being encouraged to go for pen refills and not to print in hurry to avoid unnecessary wastage of paper.

Reliance has also issued some strict pantry rules. Tea and coffee is on self-service basis. It will be served only in meeting rooms and visitor’s rooms, and water bottles will be filled only once in a day in morning.

It is not a surprise that RIL has taken up high costs as a major issue, especially in its subsidiary RRL. The company, which promised to invest Rs 26,000 crore in its new retail venture and hired thousands of people, some with astronomical salaries, has now asked its format heads to justify their respective employee strength. It has also asked them to justify role of each employee in the retail venture.

Sources said the company has already sunk in a huge sum in the project without any returns in sight. The supply chain is yet to stabilise and the company is seeking joint ventures with foreign retail companies, wherever possible, to sort out this critical issue. At the same time, industry experts give RRL the credit for the fastest expansion plan. Experts said 600-plus stores across formats in less than two years is no mean target.

August 21, 2008
Source: Economic Times

Birla plans big expansion of lifestyle retail chain

Kumar Mangalam Birla is putting his best foot forward almost 10 years after storming the fashion space with the acquisition of Madura Garments. In his most ambitious retail foray move, he is scripting India’s high-street luxury retail play similar to Barneys or Harvey Nichols.

Madura Garments Lifestyle Retail Company, a 100% subsidiary of AV Birla Nuvo, is working on setting up 12-14 stores to meet the fashion needs of the urban Indian man. The new store chain — The Collective — will open doors in Bangalore, Mumbai and New Delhi initially.

The retail initiative will bring in some of the world’s edge of the fashion, super-premium brands like 7 For All Mankind and True Religion to India for the first time. Then there is the enduring high-end names like Kenneth Cole, Ted Baker and Valentino entering the market through a distribution deal.
Going beyond apparel and accessories play, the company has roped in Paris-based Jean Claude Beguine to set up salon within the stores while Sonodea from the US will decide the music for the store. The retail chain is also enlisting the leading names on Saville Row for tailored suits, besides offering laundry and fabric-care services.

“There should be more than one reason to come to our stores,” says The Collective CEO George Santacroce, who has in the past steered several international brands in the US market. Mr Birla’s luxury foray is targeted at men in the 30-45 age bracket, with income ranging from $50,000 to $200,000. AV Birla Nuvo will invest around Rs 275 crore from internal accruals in the project over the next 3-4 years, adds company director Vikram Rao.

Mr Santacroce says the chain will essentially be a bridge between premium and luxury brands, with some degree of overlapping with luxury market. “There’s a long list of brands entering India’s pureplay luxury segment, and we leave that space to them,” he adds. However, be sure to find the apparel pricing in the store in the range of Rs 4,000 to about Rs 1 lakh for a suit.

So the brand check list will include Armani Collezioni, Versace Collection, Z-Zegna, Cheap Monday, Rock & Republic and footwear and accessories brands like Puma Black, Mandarina Duck, Bally and Church’s Footwear. It is believed that The Collective has inked agreements with 35 apparel and around 20 accessories brands.

“Accessories are the first acquisition in an emerging market as people change their bags, shoes and watches more readily,” says Mr Santacroche.

August 19, 2008
Source: Economic Times

Trent to launch 16,000 sq ft value apparel format store this fiscal

Trent Ltd, the retail company of the Tata Group, is gearing up to enter the value apparel segment this fiscal with the launch of its first store at Kalyan, a suburb of Mumbai. “We should be ready with our first value format store before the end of this financial year. Our pilot store will get launched early next year,” stated an official from Trent.

Its value store in Kalyan is expected to be 16,000 sq ft in size and would be stocking apparels across all segments. “We have already got our supply chain in place and the apparel will be sourced from our existing network,” stated the Official. Besides, there is also a possibility of sourcing from the UK-based retailer Tesco, which has recently entered the cash and carry business in the country. In fact, Tesco has signed a franchisee agreement with Trent’s Star Bazaar (the discount hyper market) and latter is will be its biggest customer.

Bringing in its private labels across a range of men’s, women’s and kidswear apparel, Trent would develop its ‘yet to be named’ value brand indigenously. “In value-based retail, people are not necessarily brand conscious, unlike in high-end retailing. We would be developing our own brands in this segment,” added the Trent official.

Targeting the lower income customers in tier II and III cities primarily, Trent is segmenting its customers based on its prices across its retail formats. While its Westside stores are targeting the mid-end segment, its new value stores would go a notch lower in the price chain. “We have a definite set of consumers who are not necessarily down trading. Our consumers are those who are value conscious and have lower disposable incomes,” added the official.

Based on its pilot store in Kalyan, Trent would be using it as a validation and assumption model before its rolls our more stores across the rest of the country. “We would be covering all the tier II and III cities and all the stores would be company owned,” added the official.

August 19, 2008
Source: Economic Times

Reliance Retail ties up with UK's Wincanton for back-end biz

After having signed up at least half-a-dozen partnerships for specialty formats, Reliance Retail is now entering into a joint venture with leading European supply chain specialist Wincanton for its food and grocery and hypermarket businesses.

The synergy would enable Reliance to efficiently run its critical back-end operations, which essentially include warehousing of goods and transporting them to stores on time.

Industry observers believe that the company has expanded very fast and has managed to set up over 600 stores across various retail formats in less than two years, but its supply chain is in a mess. “How to get the right merchandise to the stores on time has been its biggest problem. You’d often not find the goods you want in Reliance’s food and grocery outlets,” said a source.

Wincanton, the UK-based $4-billion supply chain solution provider, has been roped in precisely to tackle this problem. It is expected to completely take over the supply chain, find the right warehouses for goods and transport them in time and in the right quantity to Reliance Retail stores.

Supply chain solution providers, Wincanton, for example, have IT systems in place to update them with regular data on inventory level in stores.

August 15, 2008
Source: Economic Times

Wal-Mart 'cash & carry' India rollout in Q1 2009

Wal-Mart is all set to roll out its first ‘cash and carry’ outlet in India in the first quarter of 2009.

Raj Jain, President, Wal Mart India, and CEO and Managing Director, Bharti Wal Mart India, said the international retail chain Wal-Mart would launch its first ‘cash and carry’ outlet in the northern part of the country in the first quarter of 2009.

It had earlier tied with Bharti for the wholesale venture.

The retailer is looking at opening 3-4 ‘cash and carry stores’ by 2009. This format would provide products to the local grocery stores and small-time retailers at competitive rates.
Raj Jain maintained that to ensure effective supply chain management, essential for bringing down the product prices, Wal-Mart would focus on sourcing locally. This would not only reduce the transportation costs for Wal-Mart, but also help the local suppliers to grow and prosper.Wal Mart sources goods worth Rs 1,500 crore from India and is looking to scale it up.

“We are in talks with manufacturers in Punjab and Haryana and other parts of country and the sourcing from India is likely to increase in the near future” Jain added.

August 13, 2008
Source: Business Standard

Tesco enters Indian retail with Tata Trent

After wooing many Indian realty majors and retailers, including Bharti, the Wadias, DLF and Parsvnath, UK's largest retailer Tesco has decided to go solo by developing a cash-and-carry business with an investment of £ 60 million in the first two years.

It has simultaneously zeroed in on a tie-up with Trent, the Tata group retail arm, to develop the latter's discount hypermarket format.

The cash-and-carry business, also known as wholesale outlets, is the only retail format where 100% FDI is allowed. Tesco international & IT director Philip Clarke said, "We have made no secret of our wish to enter India and have had a team here for almost three years studying the market, talking to businesses and consumers and looking for the right way forward.''

While Tesco joins German rival Metro--the first to enter India in 2003--in opting for the wholly-owned cash-and-carry operations, Wal-Mart has a 50:50 JV with Bharti group and Carrefour is still exploring India.

The exclusive arrangement with Trent, for which Tesco will receive a fee, is one where the former can draw from the British chain's vast retail expertise and technical capability to support its own big box format Star Bazaar, which has been on a slow track, according to retail analysts. Launched in 2004, there are four Star Bazaar stores in the country.

Looking for sharper management focus and improvement in operations, Star Bazaar was recently transferred to a 100% Trent subsidiary, Trent Retail. "In large format retailing in India, hypermarket is the most challenging and eventually rewarding, as it has been abroad,'' said Trent MD Noel N Tata.

This (Star Bazaar transfer to Trent Retail) was done to beef up its large box format through local sourcing arrangements as against national sourcing.

This was done because as the latter was unviable, especially in food and groceries, due to infrastructure bottlenecks, tax inefficiencies and high freight costs. Another reason for hiving off Star Bazaar was that it could have tie-ups with international retailers to enhance its know-how.

Both these requirements will be fulfilled through Tesco association. Apart from accessing the $99.5-billion Tesco's marketing, stock management, retail information systems, cold-chain infrastructure and front-end services expertise, Trent will source merchandise for Star Bazaar from Tesco's wholesale outlets in India.

August 13, 2008
Source: The Times of India

Reliance Retail to bring UK's Hamleys toys to India

Reliance Retail has entered into an exclusive pan India franchise arrangement with the UK-based Hamleys, the world’s most famous toy retailer, to bring the latter’s toys to India.

This arrangement is aimed at combining the distribution dominance and scale of Reliance Retail in FMCG, food, electronics, consumer durables, apparel, footwear, lifestyle and home improvement categories, and Hamleys’ world-class toy retailing experience, said a company release here.

Hamleys brings to this partnership its skills and capabilities of creating a store experience, training its staff to deliver this experience, designing stores and developing private label products to complement the brands. Reliance has the reputation of building the network and running its store operations nationwide efficiently.

The company is set to open two flagship stores in Mumbai and New Delhi in 2009. This will be followed by a regional expansion, across India, over the next few years.

The stores will sell a wide range of toys from the much loved brands to more traditional and nostalgic toys, as well as quirky and unusual treasures. These will include Hamleys own brand range, renowned for exceptional quality and play value. Toy demonstrators and magicians will bring the store to life as well as well as a host of events and activities.

The Indian toys and games market is estimated at approximately Rs 2,500 crore and has been handicapped by lack of significant national brands and the availability of quality retail stores. Being a young nation, there is an opportunity to grow this market by providing a wide range of national and international brands and products under one roof and creating a store experience which is memorable and unique.

Bijou Kurien, president & CEO, Reliance Lifestyle Holdings Pvt Ltd, said, “Our partnership with Hamleys heralds the beginning of a new era in the evolution of the toy market in India. We hope to bring world class toy stores which will capture the imagination and attention of children in India. We are tremendously excited about this venture and our decision to partner with Hamleys.”

August 12, 2008
Source: Economic Times

General Trends & Information

Slowdown is manna for discount chains

As mainline retail players slug it out with steep discounts and wafer-thin profit margins, value retailers, which sell only discounted merchandise, can’t stop smiling.
Though relatively new to the game, value retailers already account for almost 50% of the industry turnover and are now looking to cater to a larger price-sensitive clientele by expanding into hinterland.

Jay Gupta, managing director, Loot India Pvt Ltd, which runs a multibranded retail chain by the same name, said in July sales soared to Rs 4 crore compared with Rs 2.5 crore in the same period last year.

“September-January accounts for over 60% of our annual revenues,” he said.
Loot is aiming at a turnover of Rs 100 crore by 2009. The chain, which has 38 outlets across India, is looking to go public next year to raise over Rs 300 crore to finance expansion. It plans to enhance presence in Tier I, II & III cities by March 2009.

The flurry of discount sales by bigger chains have not rattled the cut-price players.
The bullish outlook comes even as they hiked discounts recently to outdo the bigger chains.

For example, Brand Factory, Future Group’s discount retail format store, increased discounts from an earlier 30-35% to 40-45% now. “Value retailing is the next big thing with more footfalls coming its way,” said Rajesh Seth, vice-president, marketing, of both Central and Brand Factory stores.

Viney Singh, managing director of Max Hypermarket Ltd, the Landmark Group’s discount store, said consumer response has been “overwhelming”.

“We plan to take it to next level now,” Singh said. The company has rolled out 2 hypermarket stores is last 10 months and sees a footfall of 120,000 every month.
B Vijayalakshmi, assistant vice-president, retail and consumer goods at Evalueserve, a consultancy, said discount chains in the country will grow at an annual rate of around 40% over the next five years.

In contrast, the industry is projected to grow at just around 35%. The organised retail industry does a business of Rs 26,000 crore every year, while the value retail segment is pegged at Rs 12,000 crore, according to Evalueserve data.

Apart from firming up of plans to enter the car accessories market, Brand Factory plans to increase outlets from 7 now to 50 by 2010-11 at an estimated investment of Rs 500 crore. It is eyeing a turnover of Rs 250 crore this year.

Despite slender margins, efficient supply chain management and lower unit value and operating cost ensures these retailers are able to grow their revenue kitty without taking a hit on bottomlines.

The Grab Stores, which made its debut in Mumbai early this year, will be testing waters in value retailing in other metros and Tier II & III towns. It has earmarked Rs 400 crore for setting up 50 outlets measuring a minimum 5,000 sq ft each over the next 2-3 years.
The company sells 55 brands and offers 25-80% discounts throughout the year. “We try to maintain our margins by increasing the volumes,” said Sanjay Tayal promoter, Krishna Group, which owns K Lifestyle.

August 28, 2008
Source: DNA

Retailers Take a Slower Road in India

India's expected retail boom hasn't taken off, leaving companies large and small to rethink their expansion plans.

Wal-Mart Stores Inc., which unveiled plans to enter India with a joint-venture partner two years ago amid great fanfare, will open its first wholesale store next year, but it won't comment on future plans. Three Build-A-Bear Workshop Inc. franchises in India opened by Murjani Group have closed. Straps, a chain run by India's Oswal Group that featured Wonderbra lingerie from U.S.-based Hanesbrands Inc., has closed its more than 20 stores. Big German retailer Metro AG, after five years here, operates only four wholesale stores; the company says it is taking its time developing its Indian business.

India's retail industry -- including everything from carrots to cars -- clocks around $350 billion a year in sales. That figure had been expected to double in the next seven years. But now, some retail executives are taking a closer look. Growth is less than hoped for. And thousands of new shops have sprouted in the past few years, so there are more players competing for the same consumer.

Just three years ago, an explosion of conferences, analyst reports, Web sites and magazines predicted the arrival of a new Indian consumer who would change the global retail landscape. The first modern retail stores here were so popular that many entrepreneurs thought people would buy almost anything at any price. They were wrong, as both large and small retailers are discovering. For some, the forecast retail boom that promised jobs for Indians and a new market for global retail giants is already a bust.

"I was an eternal optimist; now I have become a realist," says Kishore Biyani, chairman of Pantaloon Retail India Ltd., India's largest retailer by sales, which has revamped its expansion plans as it discovered more about Indian consumers. "Everybody has miscalculated."

Most retailers say they are grappling with the same problems: rising costs and fewer buyers. In the early days of the boom, retail rents and salaries soared, though recently they have started to come down a bit. Many outlets discovered that consumers didn't really want their products. And unlike shoppers in Asia's other booming economy, China, Indians are rarely willing to pay three to 10 times more for an international brand than for its domestic equivalent. The average Chinese consumer has more disposable income, and more than a decade extra of experience with international brands.

Ritu Sureka opened her home-furnishings store "All Living" in the Grand Sigma Mall, Bangalore's newest, in 2005. She was sure the Indian tech capital's programmers and call-center workers would spend their rising salaries on stylish lamps and pillows for their new homes. Now she is advertising a 70%-off sale, and still doesn't make enough money to cover the rent. "I think this retail thing has been a failure," the 45-year-old says.

Nevertheless, India still generates excitement among some investors. Earlier this month, both British retailer Tesco PLC and Vornado Realty Trust, one of the largest mall developers in the U.S., announced plans to enter the country with local partners.
Some retailers, especially those catering to budget shoppers, are thriving. And deep-pocketed companies like grocery-store chains are willing to shoulder losses for a few years, assuming Indians will become accustomed to mall and supermarket shopping instead of buying at the country's millions of mom-and-pop stores.

Shoppers Stop Ltd., one of the first companies in India to attempt modern clothing and houseware chains, has posted net losses for the past two quarters. Some companies that still have big plans, including Indiabulls Financial Services Ltd. and Aditya Birla Group, have changed tack, closing some stores and making management changes.

"We all have to go through some restructuring and shake-up," says Thomas Varghese, chief executive of the Aditya Birla retail unit, which has more than 500 grocery stores. Most were built in the past two years, and few are profitable yet. "The Indian consumer is a damn tough customer."

If retail growth sputters, India will lose an important avenue for growth to trickle down to the masses: the jobs retail provides.

n the Grand Sigma Mall, not far from Ms. Sureka's shop, an outlet that sold VF Corp.'s Wrangler Jeans has pulled out. On the ground floor, other stores are empty, including a former Reebok store.

"Everything is overpriced here," says Vignesh Vishwanath, 21, a computer programmer for Microsoft, drinking coffee with a friend at the mall. "This coffee, for example, is 85 rupees here. At the cafe near my house it is only 60 rupees. You can never compete with the local market."

August 25, 2008
Source: The Wall Street Journal

Malls’ day yet to come

Malls are not yet venues for `serious shopping but are more a haunt of the window shopper, impulse purchaser and the cinema goer. That most cities in India are yet to see a well managed mall is partly to blame.

Except for a handful of malls most do not offer customers the experience and delight they promise. In some regions such as the NCR they have been ‘over built’— another reason malls are not doing well.

These were among the sentiments expressed by a group of leading retailers participating in a panel discussion on consumption trends, organised by the international property consultants Jones Lang LaSalle Meghraj at a launch of their report on Leading High Streets of India last week.

But the malls’ day is coming if not sooner definitely a few years down the line… if they can pull their act together, was the general feeling among the participants. And that does not take much — follow traditional wisdom and know that ‘customer is king,’ they said.

Among them were retailers from a wide section of products and commodities, including Mr B.A. Srinivasa, Director, Vivek Ltd, the leading chain of white goods retailer; Mr S.B.P. Pattabhi Rama Rao, President, Australian Foods India Pvt Ltd, a company marketing the leading brand of Australian cookies — Cookie Man; Mr T.S. Ashwin, Managing Director, Odyssey, a chain of bookstores; and Mr Nathella Prapanna Kumar, a leading jeweller and a popular name in the city over the last several decades.

Moderating the group was Mr Anuj Puri, Chairman and Country Head, Jones Lang LaSalle Meghraj. Inflation not withstanding, the sale of white goods was growing at about 15 per cent year on year and computers and other IT products at about 25-30 per cent. says Mr Srinivasa, dismissing inflation as a ‘momentary demotivation.’

As for malls as a location for white goods store — “Malls are okay for window shopping, impulse purchases and garments,” he says. Viveks has an outlet in a leading mall on the arterial Anna Salai where footfalls are high but the chain’s leading outlet is the one in Mylapore — one of the oldest residential areas in Chennai which is now a mix of residential and commercial segments. Buyers still like to pick out the exact piece of their choice and not have it delivered from a central warehouse.

Mr Rao felt that there was more to the slowdown than a passing phase, there has been a definite drop in footfalls since April and it is severe in the ‘overbuilt markets of the NCR’ and also in Ahmedabad. The South, though, is on an upswing but there has not been an increase in the number of malls in Chennai, Bangalore and Hyderabad.

But one positive outcome of the slowdown in offtake of space is that the landlords, the mall owners, are willing to talk to those taking up small areas, such as Cookie Man’s, that can manage with as little as 300 sq.ft. Malls are starting to work better — they can no longer get away with being ‘mousetraps,’ he said.

Mr Gibson G. Vedamani, CEO, Retailers Association of India, is confident that by year-end retailers are not likely to report a serious drop in sales. But outlets may take a business decision to change locations because they need to be efficient. Malls are just beginning to get their act together, though some of the early players did not get their business model or location right.

Mr T.S. Ashwin, Managing Director, Odyssey, a store that is present in all formats – malls, neighbourhood shops and high streets — reports a noticeable drop in sales in the mall outlets. But there were no issues in their shops on the high streets.

He has a bone to pick with mall developers, their rental models are never transparent, he says. But a high street option is always a more transparent deal. Also, he complains, he has a two-page long list of outlets proposed in malls but the mall space is yet to be delivered — the money is stuck and the plans are delayed. But in a high street, even a built-to-suit project is ready in less than a year.

Mr Ramesh Nair, Managing Director, Chennai Region – JLLM, says in Chennai, particularly, there is slow supply of mall space. The delay in approvals is partly to blame. Paper work can take up to two years. The suburbs are also growing at a slower pace than expected.

If the reactions to a mall as a location are mixed for these people, Mr Kumar, the jeweller is clear — no more malls for their jewel shops. Jewellery buying is ‘serious business’ and malls simply do not have the proper ambience for it, he says. He was among the earliest to get into a mall on Anna Salai but four years later he exited and never thought of setting up shop in a mall, Mr Kumar said. The Nathella chain of shops prefers its own locations, not even rented ones. “Mall footfalls have a different mindset,” he said.

But there are happy stories in malls, points out Mr Rao, and these are the top few that have got their location, management, and their rent right. These are malls that are run by experienced mall operators who know their business and not the security guards — that is when shops run after the care takers begging them to turn on the air-conditioning, he commented.

Cookie Man is careful to go with the established names in malls. The emphasis in a successful mall is on customer experience — providing adequate car parking, ambience, ensuring customer delight and where the “the customer is treated like a king,” Mr Rao said.

August 24, 2008
Source: Hindu Business Line

High rentals hit retail expansion plans

The expansion plans of retail companies have taken a hit due to the rising real estate rentals.

Talking to media persons, K Dasaratharaman, president (specialty retail), Spencer Retail, the retail arm of the RPG group, maintained that the real estate prices are a critical aspect while choosing the location of new stores.”

Dasaratharaman said that while they were planning to open another 50 specialty stores by this fiscal end, the rentals would be a critical element, while choosing the new locations.

“We definitely want to add another 15 ‘Book and Beyond’ store and 40 Music world Store by this fiscal end but the location of the upcoming stores would be decided keeping the real estate prices in mind.” Dasaratharaman added.

K Dasaratharaman was in Chandigarh to announce the opening of a new vertical of the Spencer retail “Book and Beyond”. This is the sixth outlet of ‘Books and Beyond’, specialty store by the RPG retail group.

August 13, 2008
Source: Business Standard

Shortened supply chain

The cash and carry business model brings together small, medium and large-sized producers, farmers, agricultural cooperatives and manufacturers, with the dispersed community of hotels, restaurants, caterers, traders, retailers and small to medium business enterprises, under one roof.

A cash and carry retailer buys directly from producers and manufacturers and sells to business customers from its no-frill approach wholesale centres.

In this way, cash and carry operators shorten the supply chain and eliminate the high costs associated with a fragmented supply chain (estimated as high as 25 per cent in India). It also cuts costs and wastages by building modern trade infrastructure and implementing modern IT-based systems, which improve efficiency.

By aggregating the demand of small and medium businesses, cash and carry formats are able to buy in bulk quantities for the advantage of its customers. Some of the savings made are passed on to the suppliers, some to the customers, while cash and carry retailers benefit from the supply chain efficiency that they are able to create.

August 13, 2008
Source: Hindu Business Line

Cash n’ carry business gets competitive

The cash and carry segment of the country’s Rs 14-lakh-crore retail sector is getting competitive.

Metro Cash and Carry India, a 100 per cent subsidiary of Metro Cash and Carry International GmbH, Germany, the first to foray into the country more than five years ago with a store in Bangalore, currently has four stores and is opening a fifth one in Kolkata soon.

With today’s announcement of a partnership with the Tata group’s Trent, UK retailer Tesco is the latest player to enter the business, after Wal-Mart declared an exclusive tie-up with Bharti Retail last year.

“The market potential for the cash and carry business is huge, in fact, as big as the retail sector in addition to the demand from hospitality players, traders and farmers,” said Mr Gibson Vedamani, CEO, Retailers Association of India.

The cash and carry model brings the small retailer into the organised channel by helping them buy in an organised manner, points out Mr Vedamani. In addition to this, entrepreneurs and retailers in Tier-II and Tier-III cities would have access to the entire range of products available in the market, he says. The cash and carry business intends to reduce several layers in the wholesale business.

“We believe that the cash and carry format brings significant benefits to small businesses such as retailers, traders, hospitality segment and farmers with its unique business-to-business format. The cash and carry segment was opened because the Indian Government recognised the benefits it brings to economies such as ours and is welcoming new players in the industry,” said an official spokesperson from Metro Cash and Carry, India.

August 13, 2008
Source: Hindu Business Line

Retail giants focus on discounts to perk up sales

Inflation-hit consumers are steering clear of discretionary spends to gravitate towards value formats and discount stores to stretch their buying power. The slowdown of growth rates has clipped sales in several high-priced categories like mobiles and apparel by over 20-25 per cent (industry estimates) in the past few months while spends on basic food and home items have grown by over 25 per cent, as per AC Nielsen estimates.

Bargain hunters are flocking to modern ‘value retail’ formats like Big Bazaar, Food Bazaar, Subhiksha and More, which have intensified their bargains and discount offers to encourage consumption. Modern retailers are now pushing private labels (lesser priced in-house brands) even with consumers opting for cheaper brands.

“Consumers are demanding higher benefits for their spends in inflationary times. We are now pushing the expansion of our value formats to gear up for the challenging times ahead,” said Kishore Biyani of Future Group. The retail group opened over four Big Bazaars in a single day last week to gear up for its massive bargain offerings on 15 August called ‘Maha Bachat Ke Paanch Din’.

Industry observers said that consumer sentiments have been hit owing to inflation, rising borrowing costs, challenging business environment and the fact that salaries will not keep pace with rising costs. Discount formats benefit more during recession and a weak economy with their higher-priced counterparts noting a significant dip in sales.

Retailers are cross-subsidising discounts offered on basic purchases by hiking margins on the discretionary spends. “We have also been scaling down costs in our system to be able to offer value. Given our scale, we are in a position to negotiate better with consumer companies to get the best rate for consumers,” said Food Bazaar CEO Sadashiv Nayak.

Retail analysts say consumer trends in India mirror global trends where more purchases are taking place at value formats like Walmart in the US which is also reeling under recession and inflation. Value retailers are expected to benefit from an economic slump as shoppers head to discount stores for a better deal.

August 11, 2008
Source: Economic Times

Indian retail sector fails consumer-friendly test

Despite global brands flooding retail chains across India and domestic players going an extra mile to woo consumers, the Indian retail sector is yet to provide its clients the complete retail experience. In what may come as a revelation to store designers, the otherwise untiring women shoppers are possibly not spending enough time and money during their visit to these outlets.

Crammed outlets, unpleasant mannequins and even lack of seating arrangement to make their husbands comfortable as they go about apparel bingeing are hampering the great Indian retail story, thanks to the unpleasant retail experience, points out a survey by the apparel design and merchandising department of National Institute of Design (NID).

Well, when it comes to being consumer-friendly, retail stores in our country have still have a long way to go. Even some of the leading retail stores fail to take into account customers’ preferences, mainly as they are yet to get down to the concept of ‘retail designing’.

While this is true for almost all major retail stores in the country, some ethnic wear stores surveyed by the final year NID students of the apparel design and merchandising department in the three cities of Ahmedabad, Mumbai and Pune had this to reveal.

The survey concludes that retail stores face huge gaps in modern retail design approach, ranging from the selection of location to services offered to the customers.

Based on consumer feedback , the survey also highlights aspects that retail stores should consider in order to increase footfalls and enhance consumers’ shopping experience.

On parameters ranging from accessibility, location, window display, facade, staff, packaging, decorative & props, ambience and interiors, retail stores-and in this particular case, exclusive branded stores for ethnic wear-do not consider the likes and dislikes of their target consumers.

“Retail stores are yet to understand the value of retail design and are oblivious of the consumer-centric atmosphere. Retail design doesn’t only include interiors but factors like where the store is located, which very much determines consumers’ attraction to the store,” said NID faculty member Somesh Singh under whose supervision the research was carried out.

August 9, 2008
Source: Economic Times

Regional Trends

Vimal unveils first Premium Franchise retail store in Kolkata

Vimal, the flagship textile brand of Reliance Industries Limited opened its first Premium Franchise retail store at N.N. Dutta Road, Tollygunj, Kolkata. Eminent director, Shri Rituporno Ghosh inaugurated the Tollygunj, Vimal store at an event held in Kolkata.

Built on an area spanning 2600sq feet, designed to cater to the large through put of customers who can experience the new décor, designs and layouts of the Vimal showrooms, which will offer a never-before retailing experience to customers.

Vimal has over 77 stores in the East, which are witnessing major growth, in footfalls as well as revenue year after year. The company is confident that with increased presence, it will be able to offer 'the unmatched Vimal experience' to more and more customers in Kolkata

Apart from the launch of Tollygunj store, Vimal is also opening five SIS (shop-in-shop) stores as well. Commenting on Vimal's expansion plan, Mr. Anand Parekh, President Reliance Textile said, "We see a huge potential for growth in the Eastern markets. These new openings will further strengthen our commitment in the East market and promote our wholesale and retail business."

These Vimal showrooms will now offer not just the latest fabric collections for premium menswear, but also the Vimal range of men's apparel – shirts, trousers, suits and jackets. This apparel would be available under three sub-brands, which will appeal to different sections of the male audience, as follows:

September 1, 2008
Source: fibre2fashion.com

Reliance Retail second hypermarket

Reliance Retail has opened its second hypermarket `Reliance Mart' in Andhra Pradesh here at Tolichowki. The company opened its first hypermart in Tirupati early this year. The 50,000-sq ft Hyderabad facility would have a range of over 11,000 products in different segments, including fresh produce, books and music, gifts and toys, footwear and eyewear, Mr Raghu Pillai, President and Chief Executive Officer (Operations and Strategy), said here in a press release. - Our Bureau

August 28, 2008
Source: Hindu Business Line

Get ready to splurge on big brands

(Jamshedpur)

Now the dream of owning that desired pair of branded denims and stylish leather boots is only a retail mall away. After Ranchi, big retail joints have set their eyes on Jamshedpur.

Increase in the purchasing power has given rise to a strong middle-income group that doesn’t mind spending extra on branded clothes and luxury goods.

After opening a retail space in metropolitan cities, companies are shifting focus to smaller towns. Soon the steel city would get its first flagship Reebok store. The 1,600sqft showroom coming up in Bistupur would open doors to shoppers by mid-September.

Besides Reebok, other brands invading the silent retail scene in Jamshedpur are Pantaloons and Big Bazaar — both part of the Future Group.

“The economy is booming. The youth are conscious about their lifestyle. We have plans to open stores across India and now we have shifted our focus to Jharkhand. The market in smaller cities has to be explored and if everything goes according to plan, we will have a store in Jamshedpur by next year,” said Rajat Gupta, the general manager (marketing) of Big Apple, a fruit, vegetable and grocery chain based in New Delhi.

Television and Bollywood have contributed to the growth of the retail sector. Big budget movies, designer clothes and brand ambassadors have generated an awa-reness about foreign brands in the country. Jamshedpur already houses John Pla- yers, Lee, Woodland and Koutons.

“People in smaller cities want to advance and grow. In recent years, income opportunities have multiplied and there is more money in the hands of the consumers. For retailers, this is a step towards expanding our business but for those in smaller cities, it is more of a wish fulfillment,” said Atul Takle, the general manager of corporate communications of Pantaloons Retail (India).

Students are also ready to jump on the brandwagon. “Students or professionals, who come from metros to work here, have few options. I would not mind spending a little extra on clothes that last long, colours that don’t fade and designs that are trendy,” said Rim Bhattacharjee, an architect with a design firm in Jamshedpur.

“There are few stores but we need more,” said Amborish Chowdhury, an MCA student.
For shoppers in the city, good days are in store at retail stores!

August 28, 2008
Source: The Telegraph

Cherma’s to add three stores in AP every year

Cherma’s, the Hyderabad-based retail chain of readymade garments, is planning to add three stores — one in Hyderabad and the rest in other parts of the State — every year from now on, according to Capt. K.F. Pestonji, the Chairman of the group.

He told reporters here on Friday that Cherma’s, established in 1980, currently has seven showrooms — five in Hyderabad and one in Vijayawada and Vizag each.

He said Cherma’s had also set up manufacturing facilities — first in the Apparel Export Park, Hyderabad, for export purposes with a capacity of 3 million garments an annum and subsequently in 2003, another unit with a capacity of 1.5 million units an annum. He said the group was providing employment to 5,000 people directly or indirectly.

Capt. Pestonji said that Cherma’s had always focused on providing fashion and quality to the customer at an affordable price. “For a long time, ours was the cheapest readymade chain in the State. Now customers are more appreciative of Cherma’s more, as both on quality and price, our garments stand out,” he claimed.

The group had no plans to set up any more manufacturing units. “We are also exporting on a small scale but our aim is to target the domestic market, especially in AP, and then only we will think of other States,” he said.

He said the group’s retail turnover is Rs 135 crore and export turnover Rs 40 crore.

August 23, 2008
Source: Hindu Business Line

Phoenix Mills to set up mall, IT park in Chennai

The Mumbai-based Phoenix Mills, a leading developer of malls and retail space, is setting up a Rs 850-crore mall and IT park in Chennai.

According to company officials, the company is setting up a 2.5-million sq ft mall and IT Park at Velachery, a major destination in the southern part of Chennai for retail space with major IT developments happening in the neighbourhood. The company had sometime back acquired 17-18 acres from the pharmaceutical company Raptakos Brett here.

The project, Phoenix Market City, will have 1.7 million sq ft of retail space designed by leading architects Rockwell, New York. It will have an 8-10 screen multiplex, 5-6 department stores, a large hyper-market, a home store format and one food court, apart from a fine dining restaurant, officials said.

Phoenix Mills has announced plans to set up commercial projects in Mumbai, Bangalore, Chennai, Pune, Raipur, Agra and Indore. The company has a 30 per cent stake in EWDPL India Pvt Ltd, a mall space developer that concentrates on Tier – II towns and cities.

August 23, 2008
Source: Hindu Business Line

Apparel & Accessories

RIL wants to be sourcing partner to apparel giants

The textile division of Reliance Industries (RIL) has identified the private label sourcing business for global retail chains and apparel brands as its future growth driver. It has recently signed a string of such deals to supply men’s ready-to-wear (RTW) formal apparel in the US and the UK. This includes categories like trousers, suits and jackets.

The company is talking to various global brands with whom it has a supply arrangement for fabrics. “We supply fabric to several international brands like Marks & Spencer and JC Penny. The bigger opportunity now lies in being their sourcing partner for RTW apparel,” RIL president (textiles business) Anand Parekh told reporters here on Monday.

Reliance is undertaking production of RTW apparel for the sourcing business in Bangalore. “It is the sourcing business that will contribute to the export revenue of textiles business in the days to come. Currently, around 50% of our revenue is generated from exports,” said Mr Parekh.

This comes at a time when Reliance is betting on its re-positioned Vimal brand to garner 35-40% share in the domestic menswear segment in two years. “We have around 15% share. The strategy is to emerge as the category leader in the menswear segment in two years,” Mr Parekh said.

As per the strategy, Reliance plans to venture into the women’s RTW segment. “This is one segment we are studying. There are plans to expand our male RTW segment further by acquiring brands in this category,” Mr Parekh added. Reliance’s male RTW portfolio includes formals in shirts, trousers, suits and jackets. It has three sub-brands—Vimal Red (mass market), Vimal White (premium range) and Vimal Black (super-premium range). “We might roll out exclusive stores for some of these sub-brands. Vimal is available in some 3,000-odd retail points,” said Mr Parekh.

September 2, 2008
Source: Economic Times

Koutons Retail India to launch footwear collection in October

Gurgaon (Haryana)-based apparel maker Koutons Retail India Ltd is set to launch its footwear collection across the country from October under the brand name Koutons.

“As per the initial plan, the footwear collection will be launched at all the family stores of the company across the country. We have tied up with a manufacturing company in Uttarakhand and will also be depending on some imports from China,” Mr Balvinder Singh Ahluwalia, President, Koutons Retail India Ltd, told reporters after the launch of the company’s first family store in Hyderabad. The company intends to invest around Rs 50 crore in its footwear division during the current financial year.

Mr Ahluwalia also said that the company plans to launch its innerwear brand next month. “The idea behind the diversification into various segments is to give a family all their requirements under one roof at the family stores,” he added.

The company, which has 1,350 outlets including 89 family stores, intends to have 1,800 stores by the end of this financial year, including 100 family stores. Mr Ahluwalia said that the company has assigned Rs 100 crore for the financial year to store expansions and the investment would be raised from internal accruals.

Koutons Retail India, which has 18 units in and around Gurgaon, expects its garment sales to be around 1.5 crore pieces this year as against one crore sold last year. The company meets around 65 per cent of its requirement from its units.

According to Mr Ahluwalia, the company expects revenues to be between Rs 1,100 crore and Rs 1,200 crore by the end of this fiscal, as against Rs 800 crore achieved for the financial year ended March 31, 2008.

August 31, 2008
Source: Hindu Business Line

Koutons launches its largest Family Store in Hyderabad

Koutons Retail India Limited, the manufacturer of readymde fashion wear brand on Saturday inaugurated its 89th Family Store in Hyderabad, billed as its largest store in the country. The store was inaugurated by Balwinder Singh Ahluwalia President, Koutons Retail India Limited.

Koutons offers a wide range of apparels in men, women and children wear along with stylish range of fashion accessories, a company release said.

The Koutons family store at Hyderabad is a one stop shopping destination for fashionable apparels at affordable price. The store is spread over 10100 sqft area offering the latest contemporary designs. Along with the brand Koutons, the all new collections "Les Femme" and "Koutons Junior" exclusiely for ladies and kids are also available at the store.

Speaking on the occasion, Ahluwalia said "the inauguration of this store is part of our aggressive retail expansion plans across the country as we plan to make operational in addition 100 such family stores by end 2008, taking our total count to 1800 stores.

August 30, 2008
Source: Economic Times

Reliance Footprint sets foot in Chennai

Reliance Footprint Ltd, Reliance Retail’s footwear retail chain, is planning to close the current fiscal with at least 30 stores across the country.

According to Mr Gopalakrishnan Sankar, CEO of Reliance Footprint, all these will be large format (6,000 – 10,000 sq ft), company-owned and company-operated stores. “We are planning to open a minimum of 30-35 stores every year,” he said.

Mr Sankar, who was in town to launch the company’s seventh outlet and the first in Tamil Nadu, here today, said the next store will be in Kochi, and it will be followed by outlets in Mumbai, Jaipur and Amritsar within the next 20 days. The first footprint store was launched in Bangalore in November last year. Currently, apart from Chennai, Footprint stores are present in Bangalore, Hyderabad, Delhi, Noida, Mangalore and Ludhiana. Footprint plans to open at least five more stores in Chennai “in the next three to four years”.

Talking about the range of brands that are available in these stores, Mr Deepak Chhabra, Head Footwear, Reliance Retail Ltd, said the idea is to offer all premium brands from across the countries. The shop, segmented into casuals, formals, sports and accessories for men, women and children, has premium brands including Nike, Lotto, Reebok, Puma, Aokang, Buckaroo, Franco Leone, Gaitonde and Hush Puppies.

At the entry level price points, Reliance has a range of in-house brands sourced from various vendors in India and China. “We offer private labels for all occasions - Mancini, Tosca, Viviana, Hi Attiude for the family, Monza for the sports’ enthusiast, Frisbee as homewear, Tom Sawyers for school children and Pitter Patter for infants,” said Mr Chhabra.

August 29, 2008
Source: Hindu Business Line

Reebok India plans 55 more Classic stores by year end

Footwear and apparel major Reebok is planning to open 55 additional stores of its exclusive lifestyle brand Reebok Classics in the country by end of the current fiscal year.

"We have already opened 20 Reebok Classics stores till now in key cities of NCR, Mumbai, Bangalore, Hyderabad, Chennai, Jaipur, Chandigarh and Pune, and plan to take the tally to 75 by end of 2008-09," Reebok India Managing Director Subhinder Singh Prem said.

He said the brand, which is present in the international market since many years, would carry 'edgy' and 'stylish' collections from the domain of Reebok International like the Scarlett Johannsons Hearts collection, DGK skate, NFL and the Evolution range.

"It would also consist of Indian origin collections like the Dance inspired collection being promoted by Bipasha Basu, Dhoni 7 collection designed with inputs from MS Dhoni himself and Fish Fry for Reebok designed by Manish Arora," Prem said. The expansion plan is a follow up to the company's foray into the lifestyle segment, he added.

"Reebok has been there in the lifestyle space for quite some time now and we started off by foraying into lifestyle last year with niche initiatives like Fish Fry for Reebok by Manish Arora ... And launch of some very stylish collections like DJ shoes and Canvas collection," he said.

Prem, however, refrained from divulging company's investment plans for the brand in India. "It is difficult to pin-point a figure for investment right now. We will focus on retail expansion and building the brand over the next few years with the objective of delighting the consumer and providing him easy access to the brand," he said.

August 25, 2008
Source: Business Standard

Reliance Brands may propel Adidas retail

Adidas may bank on Reliance Brands, a subsidiary of Reliance Retail, for expanding its store network in the country. Reliance Brands is in discussions with Adidas to pick up store franchisee rights.

Sources said Reliance has pitched in to accelerate store development plans of Adidas. Reliance Brands and its parent, Reliance Retail, till now have stayed focused on striking equity joint venture or exclusive licensing deals to launch lifestyle brands in India.

“We are in discussions with several potential partners for franchisee operations and Reliance is one of them. We have very aggressive expansion plans and they can not be executed by one company alone,” Adidas India managing director Andreas Gellner told ET.

Mr Gellner said it will continue to operate with existing francisee partners like Primus in propelling the growth engine. “India’s fashion industry is singularly challenged by distribution (capabilities), and not by demand and supply challenges,” an industry source explained.

Adidas has around 330 stores at present and plans to open 100 more within a year, as it charts forays into smaller towns. The global giant saw its domestic business jump 30% in the first six months of the calender year.

August 12, 2008
Source: Economic Times

Lifestyle & Luxury Retailing

Luxury brands prawling for High Street space

Most luxury and premium brands are looking for quality retail-centric real estate spaces not only for expanding their branded retail shops but also for having their new offices, according to industry experts.

Hugo Boss luxury watches, which is being retailed by Titan Industries Ltd through about 15 to 20 of 250 World of Titan showrooms, will also be retailed through upcoming luxury retail malls, apart from premium departmental stores and premium malls in India, Harish Bhatt, chief operating officer, Titan Industries told FE. According to him, “We are open to selling luxury Hugo Boss luxury watches in luxury malls and premium departmental stores which provide an environment for accessible luxury watches. Besides this, luxury malls also provide scope for higher brand visibility.”

Luxury and premium goods distributor Brand Marketing India Private Ltd (BMI), promoted by the Mumbai-based Murjani Group has moved out of its four offices in Nariman Point (including one office at The Trident, Mumbai) and shifted to Metro theatre building in February 2008. In Metro theatre building, Murjani Group has set up its new 7,000 sq ft office. This is to have ample quality real estate space in Mumbai for its office, Shehzad Karachiwala from Murjani Group told FE.

BMI has exclusive licensing rights to top global brands including Gucci, Jimmy Choo, French Connection, Calvin Klein, La Perla and Bottega Veneta. BMI brands are already sold in Mumbai’s Shoppers Stop, The Trident and Vama and will be part of Delhi’s luxury mall DLF Emporio as well as UB City in Bangalore. While luxury retailers Crossroads, Oberoi and the MBD Group are all hoping to launch luxury malls soon, new luxury brands entrants such as Armani and Miss Sixty too are vying for quality space in luxury malls.

According to Shubhranshu Pani, managing director – retail, Jones Lang LaSalle Meghraj, “Luxury brands look for quality retail-centric real estate spaces. 5-star hotels do provide quality spaces, but such hotels obviously have their own agenda and the environment is based more on hospitality than retail. Moreover, 5-star hotel spaces are limited and do not offer much scope for expansion, or the introduction of a healthy brand mix. Currently, luxury brands still find value in occupying space in 5-star hotels and are retaining these. However, thanks to the advent of luxury malls such as UB City and DLF Emporio, they now have alternatives and are beginning to benefit from the re-loaded, focused retail experience.”

Due to the ongoing inflationary trends, many retail shops at The Trident, Mumbai are offering discounts of upto 30 to 40% on lifestyle accessories. Today, only about 1% of tourists residing in luxury hotels actually shop there, and then only for last-minute impulse buys. They actually get better and cheaper buys at duty free shops. Other discerning shoppers would rather have more under a single roof, and at more accessible locations.

August 19, 2008
Source: Financial Express

Ferragamo, Piquadro set for an entry

The Netherlands-based Ferragamo International B V (FIBV) and Italian designer leather goods brand Piquadro are all set to make an entry into India to tap the country’s $3.5 billion premium lifestyle market. Both the international brands are expected to take the single-brand retailing route to expand their footprints in the country.

The two designer brands have received foreign direct investment (FDI) clearance from the Foreign Investment Promotion Board (FIPB).

Media reports had earlier said that Ferragamo was pursuing a joint venture (JV) with real estate major DLF Ltd’s subsidiary Nelia Retail Pvt Ltd. However, details about Piquadro’s Indian JV partner could not be ascertained as the company’s chairman and CEO Marco Palmieri could not be reached for comments. DLF officials were also not available for comments.

Ferragamo will be investing Rs 30 crore and Piquadro Rs 1.53 crore for buying a 51% stake each in their respective Indian JV companies.

Ferragamo will set up Salvatore Ferragamo stores in DLF’s luxury retail malls that are coming up across the country. These stores will retail Salvatore Ferragamo brand of premium clothing and accessories. The Gurgaon store will be launched at the DLF Emporio mall, which is under construction.

Ferragamo currently has one store in Mumbai. The company is said to be planning five new stores in Delhi, Bangalore and Mumbai.

Piquadro operates its retail chain in 50 countries. Its leather product range includes professional bags and briefcases for men and women, travel items, planners, portfolios, small sundry items and a wide array of accessories.

August 8, 2008
Source: DNA

Support Industries

Sequoia Capital to invest Rs 120 cr in Cotton County

Embarking on an aggressive expansion plan for its flagship brand Cotton County, Cotton County Retail Ltd will receive an investment of Rs 120 crore from Sequoia Capital India, which manages $1.1 billion in funds.

Cotton County, engaged in ready-to-wear apparel retail business, is an integrated player across the entire value chain of manufacturing and retailing. It has a presence in over 350 cities. With existing more than 500 exclusive outlets, Cotton County is planning to increase its retail footprint to over 1,000 stores by 2010.

Kamal Oswal, Vice Chairman and Managing Director, Cotton County Retail said, "the investment will be used to consolidate the market leadership position of our brand, and its foray into newer segments."

August 26, 2008
Source: Economic Times

Bharti Retail and IBM Announce Strategic Collaboration

Bharti Retail Limited and IBM India today announced a wide-ranging ten year strategic partnership under which IBM will provide technology and services that will enable the consolidation, transformation and management of a comprehensive IT infrastructure for Bharti Retail by IBM India. This collaboration is a progression of an existing four-year relationship between the Bharti Group and IBM. Further strengthening this relationship, Bharti Group's retail company, Bharti Retail will leverage IBM's worldwide expertise in the retail sector and introduce best practices and innovations to support Bharti Retail's business goals and enhance Bharti Retail's competitive advantage in a dynamic and competitive retail market.

Vinod Sawhny, President and Chief Operating Officer, Bharti Retail Ltd., said, "In a dynamic and fast evolving retail sector, Bharti Retail's association with IBM will provide a distinct competitive edge that will assist the company's vision and growth plans. Our partnership lays the foundation on which future business functions can be supported in the course of the next 10 years. This alliance is in line with Bharti Retail's efforts to be a customer-centric and trusted retailer."

"We are delighted to further strengthen our relationship with IBM. The creation of the IT Community of Practice with IBM in 2004 has led to one of the fastest integrations of IT anywhere in the globe," said Dr Jai Menon, Director Bharti Airtel & Group CIO, Bharti Enterprises. "We look forward to replicating the unprecedented success we have had with them in the telecom sector by consolidating, managing and delivering business process transformation that will drive innovation and enhance value for all Bharti Retail customers."

The current scope of the deal includes Project Management, Infrastructure for Data centers, Applications, Security and Network, and Support for End-user Services. The scope of work will keep evolving as Bharti Retail's business continues to grow. This partnership will provide Bharti Retail with a differentiation in the market place including faster product to market and cost efficiencies.

August 25, 2008
Source: CNN Money

Best offers on shopping cart at Reliance Retail

Next time when you go to a Reliance Retail store the shopping cart might apprise you of the discounts and offers. Tech startup Blink Media has signed a deal with Reliance Retail to offer technology to power an intelligent interactive shopping cart. Apart from the shopping cart, Blink will develop products for other Reliance Retail formats such as Reliance TimeOut, Reliance Mart, Reliance Digital and Reliance Trendz. To optimise its offering, Blink has got access to Reliance Retail’s loyalty customer and transactions data.

To execute the contract, Blink is looking at venture funding of around $2 million for which “we are willing to dilute up to one-third in Blink”, says co-founder Devang Raiyani. This will fund the expansion of their product team, marketing efforts and help them grow their data mining and analytics division. Blink already has a term sheet from a VC in hand. “We are open to angel funding as well as a non-VC strategic funding by an existing company,” informs Mr Raiyani. Blink was started in 2007 by Hemang Shah, Devang Raiyani and Sawan Ruparel.

The technology uses an RFID-based sensor to track shoppers’ location inside a store and based on that location drives content to an interactive screen mounted on the shopping cart. Shoppers will get ads and offers on specific products as they pass through shelves. “The idea is to track the life-time value of a customer and see how we can make the customer more valuable for the store. We do this by analysing the customer and transaction data we have got from Reliance Retail,” he says.

For fashion retail, Blink has developed a large interactive vertical screen called ‘magic mirror’, which senses your presence in front of it and asks what you are looking for. It visually shows you the apparel, which you could pair with others to see if they work well and whether a particular size and style is available. Here you could take a picture of yourself and using your mobile send it to a friend for advice.

Blink has developed a non-interactive version of the intelligent shopping cart for Future Media that will be devoid of the location-based ads or touch interface. “These are being designed to be used in small town locations as the cost will be lower and therefore ROI will be better,” says Mr Raiyani. They haven’t agreed on pricing with Future Media yet but hope to close the deal soon.

Rajeev Karwal, founder and CEO of Milagrow Business and Knowledge Solutions, recently bought a stake in the startup. Blink is looking at tapping international retail brands in markets such as Singapore, Malaysia, Dubai and Europe which are strong retail locations. “The return on capital is much higher in these mature markets,” says Mr Raiyani.

August 23, 2008
Source: Economic Times