India Retail News.

Breaking away from the traditional business models of retailing, Indian retailers are increasingly focusing on how to survive the slowdown as well as boost their bottom lines.

Trent was the first tocome out with franchisee model for their super format store - Westside. Vishal Retail has taken a step further and is all set to open a whopping 60 number of franchisee stores within the next few months. Vishal will manage the backend distribution and logistics for the franchisee and both will operate on a revenue sharing model.

Vishal management is also relocating under performing stores. Mr. Khemka, President of Vishal Retail said,

So far, our outlets were on the company-owned company-operated model but now it would be a 100% franchise-based one. This is being done to cut costs. We have plans to resize 25 shops. We have also started the 3H concept of "Health, Hygiene and Hunger" wherein we would provide healthy food to consumers in our shop-in-shop model outlets.

Besides this, the grat news is Vishal is getting into Liquor retailing through a shop-in-shop format at Goa, Shimla, Mumbai and Kangra.

A reader of our blog who is dealing into Imported Lingerie from the UK is offering bulk sales lot to be sold in India. The vendor retails under X-brand and only he will be able to explain the details of the same.

Offer for Sale:
Lingerie My Size Playtex. You can download the sample design catalog here.[PDF] The price list for the same is here. [PDF]

The same vendor is also offering Shock ActiveWear like - High Neck Jacket, Wobble Short,V-Neck Top, 3/4 Tights, Yoga Pant, Wobble Hot Pants, Running Tight, Crossback Bra Top, Secret Support Singlet etc. There is no design catalog for the same but Price List is available here. [PDF]

Bulk purchases maybe eligible for further discounts. Trade and Purchase inquiry can be sent to us here.

If there is one sector in the Indian economy that has not been hurt by the recent slowdown, it is Mobile / Wireless which includes retailers. So far they haven't had any impact as this should be evident from the rising subscriber base crossing 300 million mark.

Future Axiom - JV between Biyani's Future Retail and West Asian Mobile have plans to get up to 4,000 workforce on board, mainly in sales. The MobileStore claims to have hired over 1,200 freshers. Mr. Rajiv Agarwal of MobileStore said,

As we are on an expansion spree, hiring has become a necessity. We operate 300 stores and as we keep expanding, we have to go in for fresh recruitment.

Future Axiom wants to have at least 1,500 outlets by the end of 2009 and will also venture into value added service market like mobile servicing and providing content to cell phones. It plans to have 20 to 25 authorized service centers across India. Its Delhi authorized service center for Nokia handles up to 25,000 grievances related to Nokia handsets.

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.

Even though the overall sales of Consumer Durables and White Goods companies grew by modest or were flat in some cases, Future Group's various retail formats recorded same store sales growth in October-2008. It is critical to watch Nov sales data to get a more realistic picture.

Future Group added a new format - Ethnicity. The first store was opened in Ahmedabad and has an area of 25,000 sq ft. This format offers, leading ethnic wear and fusion wear brands, handicrafts, home decor and beauty products under one roof. While it is still early days to gauge the impact, we credit management for innovation and deep consumer insights.

The following Chart shows Monthly Area Addition of various Retail Formats of Future Group.
The chart below shows sales trend across Future Group's Value, Lifestyle and Home segment.
Data Courtesy: PRIL & Merill

Subhiksha Retail has delayed the launch of its consumer durables and white goods stores at least for the next 6 months. Slowdown in Retail and Real Estate is cited to be the main reason. Isn't this the best opportunity to strike deals as Retail Rentals have fallen ?

Subhiksha which received $50 mn funding from Azim Premji PE Fund planned to setup around 150 consumer durables outlet with an investment of Rs 600 crore. They earlier planned to launch the stores by Feb-2009 but now they have postponed until June-2009. The number of stores and the quantum of SKUs in each of them under the revised plan is kept under hood.

Subhiksha is also planning to invest another Rs 1,000 crore for expansion of its retail business including super market over the next 12-18 months.

Triveni Retail Ventures a subsidiary of Triveni Engineering has put Triveni Khushali Bazaar for sale. The group is looking forward to divest the entire stake or relinquish management control to focus on its core business.

Triveni Khushali Bazaar started operations in 2005 and has 42 stores mostly in Uttar Pradesh and Uttarkhand. The company deals mainly in three verticals Agr-products and Services, Consumer Products and Durables and Financial Services.

I-bankers have sent the feelers to Future Group, Aditya Birla Group, Reliance Retail and also to Reliance ADAG group. Reliance ADAG already has a tie-up for retail financial services business with Triveni.

The company had already indicated in analyst presentation that it is looking forward to partnerships in the near term. They were also consolidating their supply chain right from sourcing farm produce to distribution.

India's largest Realty company, DLF is all set to sign a fracnhisee deal with Italy's Luxottica to establish Sunglass Hut stores in India. SunGlass hut globally retails brands such as Oakley, Chanel, Dolce & Gabbana, Donna Karan, Prada, Versace etc.

DLF plans to open 100 SunGlass Hut stores across India over the next 5 years. The first store will come up in Delhi within a month said sources in DLF. Luxottica has been in India by the purchase of Baush & Lomb. However, DLF will noe takeover the the entire sales and retail distribution business in a 7 year agreement it has reached with Luxottica.

Congratulations to DLF over the Luxottica deal as it was desperately looking to join hands with foreign retailer and in the past Reliance Retail had pipped most of its ambitions.

Mexico based multiplex giant Cinepolis is saying Hello to India as the company chalks out plans to cash in on the Indian economic boom and compete with Reliance Big Cinemas, PVR, Inox, Fun Cinemas etc.

Cinepolis India is already in talks with major realty players. Cinepolis has earmarkd $350 million for the Indian venture. The company plans to setup 500 screens within the next 5 years in 40 cities across India. [Doesn't it sound a little bit too ambitious ?]

Cinepolis wants to be a differentiated offering in comparison to Indian chains. Cinepolis is the second chain after Village Roadshow of Australia which tied up with PVR group and has established Priya Village Road in New Delhi.

Though the West Bengal Govt had to let the Nano project slip out of Singur, there is certainly good news for small businesses and HNIs in Kolkata. Metro Cash & Carry, which received APMC license from the Govt has already signed up a whopping 65,000 clients which inclued 5-star hotels such as ITC Sonar, Taj Bengal etc.

Metro Cash & Carry tried hard to open for business for Diwali, but missed the deadline and have set an internal launch date of Dec-4th to open its 100,000 Hypermarket format store. Metro's target customers are Hotels, Restaurants, Kiranwala and ofcourse small traders who will get a deal to enhance their retail business.

The company is said to be employing almost 350 people. This store has also received liquor license and has also applied for a Drug license which will enable it to sell over the counter medicines and oral healthcare products.