Slowdown promotes consolidation in Lifestyle Segment

When corporate executives are in a sunny day, they want to conquer the world. With signs of little gloom, they have started consolidating.

Lets take the Aditya Birla Nuvo’s subsidiary Madura Garments. In Jan-2007, they announced to split up into several differnt segments within the Lifestyle category. Today they have announced consolidation of Van Heusen Louis Phillipe and Allen Solly brands under one roof. They are targeting for space in malls due to their high foot falls. Mr. Ashish Dixit, President of Madura said,

We will be able to negotiate for 15% discount if we opt for a larger space in malls and when we have consumers we want all our brands to be present there.

Landmark group has announced that it will consolidate Max Retail, Spar Hypermarket and Home Center in Oasis Center mall. Arvind Brands is also doing the same as it consolidates its accessories business under Jansport brand together with Lee and Wrangler denim brands. Indus Clothing has brought Indigo Nation and Scullers brand under the same roof.

Retailers cite that they get negotiation power and mall owners are willing to offer discount. However, we don’t think so as its the slowdown because of which mall owner is extending discounts and due to the liquidity crunch and debt on balance sheet, Retailers push the consolidation button.

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