India Retail News.

With the retail dust settling down, companies have realized to look at their bottom line. RPG Group's Spencer's retail format is all set to consolidate 5 of its brands - Spencer's Hyper (30,000 to 75,000 sq ft) Spencer's Super (8,000-15,000 sq ft), Spencer's Daily (4,000-7,000 sq ft), Spencer's Express (1,000-1,500 sq ft) and Spencer's Fresh (1,200-2,000 sq ft) into just two - Spencer's Hyper and Spencers (3,000 to 15,000sq ft)

The company is refurbishing its existing 373 stores which will fall under the new brand identity - Spencers and 27 large formats under Spencers Hyper. One of the main reason for brand consolidation was the confusion it created amongst customers. These two brands will have uniform service level, look and feel. RPG also plans to consolidate its supply chain for both the formats under one common business unit.

Reliance Retail [RR] with big retail dreams though slow on deployment front is striking deals globally as much as possible. RR's subsidiary, Reliance Brands is in talks with Neiman Marcus group.

Neiman Marcus group operates New York's 5th Avenue store - Bergdorf Goodman. This is considered as a premium lifestyle store. You may recall that in Dec-2007, we had an exclusive coverage on Reliance's tie-up with the Miss Sixty brands for the trendy Indian women.

We see a shift in Reliance's business model from grocery which was given the thrust from CMDs office towards Lifestyle retailing with higher margins. After facing resistance and realizing thin margins in Reliance Fresh, Mukesh decided to give more powers to individual business units like to make own decision on Real Estate procurement and striking brand deals. Only time will tell if Reliance can hit the 2010 goal of being the largest and most profitable retailer in India and then spin-off Reliance Retail into a separate listed entity.

The Indian Mall craze has spread to UK Developers as well. West Pioneer Properties, a UK based mall Developer is developing a 750,000 sft shopping mall at Kalyan. Big Bazaar has already booked its slot in this space and the first phase of 500,000 sft will open for business soon.

The company plans to invest Rs 3,000 crore and develop 10 malls within the next 3 years. West Pioneer malls will be branded as Metro Junction malls and will come up mainly in Tier-II cities in India.

Mr. Jayant, CEO said,

We aim to make shopping in malls affordable to shoppers in tier-II cities. The primary focus is the value-for-money segment and a majority of the space will be leased out to mass market brands.

The next Metro Junction malls will come up in Nashik and Aurangabad. It is scouting for land in Surat, Goa and Nagpur. The company will undertake the land acquisition while the cost of development will be financed by private equity and other sources.

Labels: metro-junction-malls

The potential for luxury retailing in India is large considering that Indians attach significant importance to brands. The market size is estimated to be at US$500 million and is growing at a rate of 35-40% p.a. The luxury watch market and branded jewelry each are growing at 40% p.a., and wine at 30%. The Pie chart below shows the breakup of Indian Luxury Retail Market.
Lifestyle and attitudinal changes, consumerism, and rising income levels will continue to provide growth momentum to the high-end brand retailing in the country. According to a recent industry report, there are about 1.6 million luxury households in India and this number is likely to cross 3 million by 2010. Each of these households earns about over US$100,000 per year and they spend about US$9,000 per year on luxury and high-premium goods.

Future Group's Electronics and Consumer Durable retailer eZone with turnover of Rs 750 crore [$185 mn] has lined up an ambitious expansion plan and is expecting to touch Rs 2,500
crore [$600 mn] turnover by 2010.

eZone opened its largest concept store in Bangalore. Mr. Manoj Kumar, CEO said,

This specialty retail has been growing at 30-40% YoY. The store takes the product experience to the next level, both for manufacturers and customers.

eZone concept stores are typically spread on 30,000 sft area and retails over 6,000 products and 250 brands of Indian and International electronics. If you walk into the Bangalore eZone, you will see 4 dedicated zones - Home Zone, Liberation Zone, Experience Zone and Future Zone.

Currently, their are 37 eZone stores 23 of which are standalone. Pantaloon retail plans to open concept stores in Chennai, Hyderabad, Mumbai and Kolkata. Each of them would entail an investment of Rs 10 crore.

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Lee Cooper jeans after having operated for over a year in India is finding it hard to resist from venturing into Value Segment Jeans. Lee Cooper's new brand for this segment will be known as "Famous Basics" and will compete against Signature from Levi's and Hero from Wrangler.


Mr. Ameet Panchal, CEO of Lee Cooper said,

There would be a new distribution set-up created for the value brand and its pricing would be along the same lines as the existing value based denim brands in the market.

Lee Cooper plans to increase the number of exclusive stores from 30 to 55 with an investment between Rs 25-30 crore. It also has presence in multi-brand stores as well as shop-in-shops. By the end of this year, they plan to have 600 point of sales across various formats in India.

Apart from retailing here in India, Lee Cooper now wants to focus on building India as a sourcing hub for global operations.

Manipal Cure & Care is planning to venture into the retailing of pharmaceutical medicines. It already has wellness retail format under its brand. About 98% of Indian meds and pharma market is dominated by neighborhood chemists and druggists.

Of the 2% is controlled by organized retailers of which many are still in nascent stages of growth except Apollo and Subhiksha, present in multiple states but not PAN India. However these retailers are seeing 40% YoY growth, which is a good sign.

Other retailers in the market include Hetero Drugs, which owns 40 stores in Hyderabad and 20 in tier II pockets of the state. SuperMed retail is another chain focused on hospital and surgical consumables and other pharma products.

Shoppers Stop has informed us about an exciting summer offer. As it is Time for trips and tours, Shopper Stop is offering a bonanza on the Big Summer Shopping Tour, starting 1st May 08 to 15th June 08, shop for Rs. 30,000 and get a Police Watch worth Rs. 7,400 absolutely free. [Terms and Conditions]

You can shop in one go or spread it over multiple visits till 15th June 08. This offer is valid at all Shoppers Stop, Mothercare & Arcelia stores across India. So visit The Big Summer Shopping Tour and get time on your hands!!