Titan Industries Business Analysis
Monday, September 29, 2008
Titan Industries the first retail arm from the Tata group with operations spanning from Watches to Eyewear will miss the Billion Dollar sales mark by a whisker this FY - 2009. Mr. Bhaskar Bhat, MD in an exclusive to JP Morgan Analysts presents the business views of the company and the excerpts fro mthe same are as below.The company has seen revival in demand for its watches and jewellery segment post June'08. It continues to maintain its previous guidance of 33% top-line growth. Specialty and lifestyle retailing will remain the core focus as organic growth opportunities in a nascent market such as India are large in several categories. It is aiming to add 750 stores over next 5 years and there are no immediate plans on the anvil for expanding international business.
Goldplus, Golden Harvest Scheme and Innovative collections such as Jodha Akbar to support double digit volume growth for jewellery business. Eyewear business prospects look encouraging and the company is looking to add 60 stores over next 1 year and 200 stores over next 3 years. The company has planned some exciting new launches in the watch segment such as a new children's brand and automatic watches over next 6-9 months.
Retail Stores Expansion:
Tanishq - 113 current. Hope to end FY09 by 135
World of Titan - 243 retail outlets. 300 by the end of FY09
GoldPlus - 28 current. 35 to 40 by March-09
Titan Eye + - 25 current. End FY09 with 80-90 outlets
DownSizing + Cost Control in Action
Thursday, September 25, 2008
High Inflation, unrealistic Realty Prices and slowing down of economy has led retailers to get into the slowdown mode and bring costs under control.The first signs of it were visible when retailers started moving out of malls due to unaffordable rents - ETAM, French Lingerie Giant has closed its outlets in all the malls across India. The Saga of downsizing continues,
- Indiabulls Retail (erstwhile known as Pyramid Retail) also closed two stores in Ahmedabad - one lifestyle and one hypermarket store. As per news reports, Nike has also closed some stores in the city.
- Reliance Retail has also reportedly downsized its RelianceMart store in Ahmedabad (largest store in India across 1.7m sf) to 1m sf. It is planning to open stores /shop-in-shops of its other formats.
- Closure of stores is not confined just to the city of Ahmedabad. While Koutons closed over 30 stores (out of over 1300) in 1QFY09, Spencer's is also planning to close 30-50 stores out of their 350+ stores.
- Next - the consumer durables format of Videocon Industries, has also closed 10 stores
- Recently Pantaloon closed 2 Big Bazaar stores in Ahmedabad. As per the management, the closure of stores was inline with the strategy to consolidate their position in the city as it plans to open larger size stores in the city.
And the cost control measure adopted by retailers include,
- Pantaloon, Reliance Retail and Shopper's Stop are looking to "right-size" their staff strength.
- Variable Pay will be the order of the day for Sr. Executives in Retail and for others compentation will be directly linked to the performance of the business
- Shopper's Stop has also indicated that they will need to prune costs, especially staff costs, due to slowdown in sales as well as delay in expansion.
- Indian retailers are evaluating measures to cut cost - advertising and marketing costs will likely be the first casualty along with slowdown in recruitment and slower wage increases
Given the slowdown in discretionary consumption expenditure and high cost of operation for retailers- rent, salaries and interest- we believe that retailers will continue to close unprofitable stores.
Petrol Pumps at DLF Malls of India
Thursday, September 18, 2008
DLF the beleaguered Real Estate company under immense pressure is bullish on its retail foray. DLF is establishing ultra mega malls to beat ambitions of Mukesh Ambani's Reliance Retail. DLF's malls are under construction and will be known as "Malls of India" [Left Gurgaon Mall by DLF] Two more are coming up at Noida and Bangalore. Each mall is expected to host atleast 1 mn sft of retail space.
Mr. Arvind Nair of DLF said,
Each Mall of India is expcted to attract traffic of 30,000 cars every day. These cars will need Petrol Pump, Service Station and related such services.
The company is in talks with oil marketing companies for a gas station tie-up. The concept is in direct competition with Reliance Retail's Hypermart.
Landmark - Max Hypermarkets set for expansion
Thursday, September 11, 2008
In a move to get a bigger slice of the retail sector by 2010-11, Dubai based retail major Landmark Group is planning to invest Rs 550 crore to widen its ventures - Max Retail and Max Hypermarkets.
The group, which currently has 15 stores across eight cities in India, is planning to pump in Rs 350 crore for expanding with 12 stores in each metro. The stores would be located in malls rather than in high streets to cut costs and would be spread over an area of 15,000 square feet.
The company is also planning to set up five more of its Max Hypermarkets with an investment of Rs 200 crore in Hyderabad, Chennai and Bangalore.
The Landmark Group is aiming to raise Rs 200 crore from private equity players by 2009 and touch a turnover of Rs 300 crore by 2009-2010.
The group, which currently has 15 stores across eight cities in India, is planning to pump in Rs 350 crore for expanding with 12 stores in each metro. The stores would be located in malls rather than in high streets to cut costs and would be spread over an area of 15,000 square feet.
The company is also planning to set up five more of its Max Hypermarkets with an investment of Rs 200 crore in Hyderabad, Chennai and Bangalore.
The Landmark Group is aiming to raise Rs 200 crore from private equity players by 2009 and touch a turnover of Rs 300 crore by 2009-2010.
Reliance Vimal - Kolkata Big Bang Launches
Monday, September 1, 2008
RIL's first and oldest Retail brand Vimal which underwent major transformation has launched its first Premium Franchise retail store at N.N. Dutta Road, Tollygunj, Kolkata. The shop will offer a never before experience to the executives in Kolkata with premium shopping feel and enhanced facilities, such as custom tailoring and styling.We have been informed that Vimal is also opening five SIS (shop-in-shop) in Khadims-Egaroo, Kancharapura - 2nd Sept, Khadims-Egaroo, Bhawanipur - 3rd Sept, Khadims-Egaroo, Howrah - 4th Sept, Regent Fashion, Barasat - 5th Sept and Regent Fashion, Haldia - 6th Sept 2008.
Mrs Nita Ambani, said,
We are all very proud of this moment of reviving the Vimal brand and offer consumers in Kolkata a brand which will once again regain the market leadership it enjoyed and top of the mind recall.This is a real good move few weeks ahead of the Durga Pooja, a big festival in Bengal. You can read more about Vimal's sub-brands - Vimal Red, Vimal White and Vimal Black here.
