Aditya Birla to invest 2 bn dollar in retail

Aditya Birla group will invest Rs 80-90 billion ($2-2.2 billion) in its retail venture in the next three years, the group's chairman, Kumar Mangalam Birla, told reporters on Friday. Aditya Birla Retail Ltd, an unlisted firm of the group, plans to launch the first store in Pune, in western India, this month, he said. "We are really going it alone, without a joint venture partner," Birla said.

Birla has more to offer

After months of speculation, the Aditya Birla group on Friday unveiled its retail store brand, More, which will be launched as a mix of supermarket and hypermarket formats across the country. The first store will be opened in Pune next month, kicking off the metals-to-telecom conglomerate’s pitch to grab a pie of the $300 billion retail market. Group chairman Kumar Mangalam Birla said he expects to spend about Rs 8,000 crore to Rs 9,000 crore for its retail operations, most coming from unlisted companies. The initiative will be funded through a mixture of debt and equity, he said. Pune is a representative area with a combination of all the elements of our target markets, said Sumant Sinha, CEO of Aditya Birla Retail. While the average supermarkets would have a floor size of 10,000 sq ft, the hypermarkets would be larger than 75,000 sq ft. The recently acquired south-based grocery chain, Trinethra, will also be renamed More once all the back-end operations are in place. Trinethra has over 500,000 sq ft of retail space through 170 stores, and has given the group a leading edge in southern India, Mr Birla said. The move has also raised Aditya Birla Retail’s employee base to 4,000. “The retail business would have about 5,000 employees in three to four years,” said Mr Sinha. Shopping patterns across cities were studied with the help of consultants such as Technopak, AT Kearney, McKinsey. Retail experts from emerging markets have been hired to develop the formats. Expats hired recently include Andrew Denby, who was formerly with A S Watson in the Philippines, and is incharge of supermarkets. The hypermarkets chain would be managed by Russell Berman, who was earlier with Carrefour in China. The group is also learnt to have recruited people from competitors; Sanjay Badhe from Shopper’s Stop joined the group nine months ago to head the retail unit’s marketing operations.

US retail design firm to set up ops in India

India's booming retail market is attracting global players hoping for a slice not just of the retail market, but associated industries. WD Partners, a US-based architectural firm specializing in design and development of multi-unit retail and restaurant outlets, has opened for business in Mumbai with a team of 25 architecture and engineering professionals, and plans to ramp up to a team of 105 in two years. "We build offices where we believe our retail and restaurant clients are going," said WD Partners CEO Chris Doerschlag. "It made sense to expand into a city where retail is expected to grow very quickly over the next decade." WD Partners has 39 years of experience in designing and rolling out stores for multi-unit retail and restaurant operators. Its clients include BP, The Home Depot, ExxonMobil, Gap Inc., D'Angelo, Abercrombie & Fitch, Cosi, Benihana, Safeway, Wendy's, and Starbucks. The Mumbai office will assist global retailers seeking to expand in India, as well as target mulit-unit Indian retailers to grab a slice of what the company calls "a highly fragmented but rapidly growing $300 billion retail economy in India". In Mumbai, its operations will be headed by architect Rajesh Chhablani, who has worked on international projects and with retailers like Gap and Victoria's secrets. WD Partners has 39 years of success based The Mumbai office will share its signature processes and systems for multi-unit development, assuring the quality of work is standardized and consistent. Interoffice exchange programs for the Mumbai professionals will serve as "hands on" training in WD Partners' protocols, as well as team-building exercises between US and Mumbai colleagues. The firm has an international office in Malaysia in Asia, and India will be its second.

Smaller brands are moving into malls

While small brands are vying for a coveted place in the malls, it is the big retail players who are treading safely. A lot of the retail biggies want to strike a fine balance between opening stand alone stores and presence in malls. Smaller brands are moving in at a fast rate which can result in growing number of mass buyers Property developers view this change as a healthy trend offering varied options Property developers are definitely more cautious these days about putting their money into malls as the big ticket growth sector. The euphoria of 2005-2006 has clearly taken a dip and the signs are beginning to show. An interesting trend is that while more and more small brands are vying for a coveted place in the malls, it is the big retail players who are now carefully watching each step. Aiming to strike a fine balance between opening stand-alone stores and presence in malls, the big brands want to play it safe. So, is it only the smaller brands that are contributing towards growth in mall rentals? While that may not exactly be the case, big players are getting more choosy about setting up shop in the malls as rentals spiral upwards and footfalls go down. Says Shubhranshu Pani, president, retail services, Trammell Crow Meghraj, property consultants, “The mall rentals have increased between 20 and 40% over the last one year. Hence, most brands are being very careful about where they sign up. They are also more choosy now as there are a good number of malls that have come up. Supply is not an issue anymore.” An example of a retail player steering away from the mall format is Pulse Foods India, promoted by the Poddar Heritage group. “We were initially quite focused on malls. But today it makes no sense to open an outlet in a mall. The developers are asking for crazy amounts as rent. The numbers are completely illogical. Stand-alone stores are proving a better option in the given scenario. In fact, we have deferred plans for expansion domestically and are focusing on the international market till rental overheating cools down,” says Neeraj Jain, CEO, Pulse Foods. Retail biggie Pantaloon, though, has a different perspective on the issue. With most of its stores located in malls, the company feels that only a small segment of brands are moving out. “It may be happening in a small way but those complaining are the ones who are finding it difficult to get spaces inside malls. And the fact remains that there is not much space on high streets either. The famous streets are already crowded out. As far as we are concerned, we have got large space requirements and our stores are located 90% in malls,” says Kishore Biyani, CEO, Future Group. Some players attribute such decisions to a company-specific strategy. Essar Telecom Retail, for instance, which has 30 of its 200 stores located in malls and the rest at high streets. “Ultimately it depends upon the strategy of a company. Our own strategy is to locate stores where our customers are. They buy from everywhere and we also want to bring convenience by locating ourselves near them. Many offices are locate in CP, for instance, while others are Gurgaon or Noida - we want to be at all these places.”

Retail stores in India, a sign of rapid change

Brightly-lit and splashed in day-glo colours, new supermarkets sprout each month in India's capital in a sign of rapid economic change that appears to be leading shoppers to shun small, traditional and family-run shops. By the time New Delhi hosts the 2010 Commonwealth Games, a retail consultancy estimates, there will be one supermarket every kilometre (half-mile) in the sprawling city of 14 million compared to about five in 2004. Kriti Pallav, a married working woman, said she switched from her local grocer to the new Big Apple supermarket chain because the outlets were air-conditioned and open until late. "This shopping experience is new and welcome. I don't have to haggle for prices here as I have to with the local vendor. The quality is good and overall there is great hygiene in the store," she said as she waited to pay through a computerised system. Big Apple, owned by Express Retail Services, has opened 22 outlets in New Delhi in the past two years and says it plans a five-fold increase by the end of 2007, offering everything from groceries to cosmetics. "We have 22 operational stores in Delhi at the moment but plan to open 100 outlets this year for which we have earmarked an investment of around one billion rupees (25 million dollars)," said Express Retail managing director Munish Hemrajani. The trend is not confined to New Delhi. The retail consulting and research agency KSA-Technopak predicted in an April report that by 2010 annual retail sales by chain stores will reach 21.5 billion dollars, from 7.5 billion dollars now. But there are also pockets of unhappiness about the impact that the advent of modern supermarket shopping is having on traditional shopping habits. Earlier this month, thousands of irate street vendors attacked stores set up by Indian giant Reliance Industries in eastern India, saying the new nationwide chain threatened their livelihoods. Some 5,000 vegetable sellers vandalised three Reliance Fresh stores in Ranchi in the first violence against the firm's plans to build a local version of US retail giant Wal-Mart, police said. In the nearby Marxist-ruled state of West Bengal a powerful communist leader last week threatened similar protests against Reliance. The small stores are facing an aggressive push by newer stores like Big Apple to cut them out by buying directly from farmers. Companies such as Reliance have the advantage of being able to negotiate bulk deals and then offer low prices to lure people away from the small shops as, Hemrajani said, bargains were the only way to break the public's affinity for the estimated 15 million small retailers in New Delhi. Extended hours for stores like Big Apple are hard for family-run shops, he said, adding that 7 am to 11 pm opening hours meant that "more than 50 percent of our daily sales" take place after smaller outlets had closed. US-based Wal-Mart is expected to open mega stores in India by mid 2008 after reaching a deal with India's Bharti group. Bharti, the country's largest publicly-listed phone company, has a wholly owned front-end retailing venture, Bharti Retail that plans to spend 2.5 billion dollars by 2015 to set up hypermarkets, supermarkets and other stores across India. French retail giant Carrefour has put on hold plans to invest in India due to concerns over political opposition to multinational retailers entering the market. The world's second largest retailer, Carrefour wants to see how Wal-Mart fares before it steps in. India does not allow foreign direct investment in the retail sector except for single-brand stores, so foreign companies must sign franchise deals with local companies to gain access.

Retailing giants now stock up on moms-n-pops

In a bid to increase their presence across the retail spectrum, industry biggies are increasingly looking at tapping the unorganised segment, which accounts for nearly 96% of the sector. Retailers like Metro, Reliance, Bharti-Wal-Mart as well as the Future Group are either floating business-to-business ventures (cash & carry) or roping kiranawalas in as franchisee partners to get the first mover advantage. The idea is to open new revenue streams in the unorganised segment and become more competitive. The move will also help the retailers build their image at a time when organised retail is being widely criticised for displacing the mom-and-pop stores, industry sources claim. Retail analysts attribute the partnering of kiranawalas and big retailers to attractive prices being offered by these cash & carry venture for its merchandise. “Since the demand of these kirana stores is small, their bargaining power becomes limited. But if they source from cash-and-carry outlets, they manage to save an extra 3-5% on their sourcing cost,” said Mr Arvind Singhal, chairman, Technopak Advisors, a retail consultancy. While players like the Future Group and Bharti-Wal-Mart are in the process of rolling out their cash-and-carry outlets, Reliance Retail is busy drawing up such plans as the business also tends to generate much higher turnover. “We are also exploring the franchisee model to partner with the smaller stores in segments like food & beverages, farm products, FMCG, pharmaceuticals, lifestyle, apparels and footwear,” said a top Reliance Retail official. German major Metro Cash & Carry is currently the biggest player in this segment. The business potential can be gauged by Metro’s 80,000-member strong client base in Kolkata alone where it intends to open its maiden outlet by December 2007. These cash & carry ventures improve supply chain of the mom-and-pop stores through their modern trade infrastructure and systems. “This not only makes the small retailers competitive in the range of offering and price but also lowers their transaction costs,” Metro Cash & Carry India’s deputy MD Gerardo Monzillo said. Metro, industry sources claim, often provides its merchandise to small retailers at unbelievable discounts to ensure their loyalty. “They do some crazy promotions. For example, if a kiranawala is able to source goods from distributors by keeping a margin of 5%, a cash & carry outlet may provide higher discounts of say even 25%,” said R Subramaniam, MD at Subhiskha. Future Group CEO (innovation & incubation), Damodar Mall, said: “The categories that we plan to keep will be significantly localised and the pricing will be such that even the mofussil retailers will find it profitable to buy from us.” “While yielding lower margins as a percentage of sale, B2B is an interesting business because of significantly higher volume throughput it can generate. Hence, it makes an interesting business for the group to be in,” he said. Incidentally, the group’s first B2B venture christened ‘KB’s Wholesale Market’ is coming up in West Bengal. On the benefits of entering into franchisee arrangements with small kiranawalas, a senior industry official said, “The move will help the retail bigwigs to expand their brand footprint besides improving the earning potential of the smaller stores.” The quest for partnership with smaller stores doesn’t end here. Metro has plans to launch training academies for the kiranawalas replicating their model in Turkey. These academies will train kirana owners on the latest practices in accounting, merchandising and store operations.

S Kumars plans to list Brandhouse Retails

S Kumars Nationwide (SKNL), the flagship of the S Kumars Group, intends to list its demerged retail entity Brandhouse Retails within three months.

The company is awaiting court approval for the demerger plan, under which shareholders are to receive one free Brandhouse share for every five shares of the company. Once approved, the demerger will become effective from January 1 this year.

“We will be rolling out 1,200 stores over the next three years. The stores will sell our group’s brands, foreign labels that we tie up with and also domestic brands that do not belong to S Kumars,” said Nitin Kasliwal, vice chairman and managing director, SKNL.

SKNL has entered into an exclusive arrangement with Dunhill, a luxury brand for menswear and accessories. Unveiling the first store today at the Shangri-La Hotel in the capital, Kasliwal said the company would roll out 10 Dunhill outlets over the next five years. Each store requires an investment of around Rs 4 crore.

Brandhouse Retails specialises in setting up and managing exclusive brand outlets for SKNL brands - Reid & Taylor, Carmichael House and Belmonte. It is also the exclusive India franchisee for international luxury brands like Dunhill and ESCADA.

The company intends to have over 400 stores by the end of this financial year. “We already have over 70 operational shops including two for ESCADA,” Kasliwal said.

In fact, another Dunhill store was coming up at DLF’s Emporio mall at Vasant Kunj, with two more stores, for which locations are being scouted, planned in north and south Mumbai, he said.

Mark Newman, regional managing director, Richemont Luxury Asia Pacific, said the company had high expectations from the Indian market. The tie up with Brandhouse Retails is for three years, extendable by a similar period of time.

Significantly, the concept store is based on the Dunhill brand’s recently revised identity. Richemont’s luxury goods interests encompass brands including Cartier, Van Cleef & Arpels, Piaget, Vacheron Constantin, Jaeger-LeCoultre, IWC, Alfred Dunhill and Montblanc.

Aditya Birla Group to go it alone in retail

Labelled 'More', first store expected in Pune in June.

Ending months of suspense over its retail plans, the Aditya Birla Group today said it would go solo in setting up a 1,000-store network that would involve an investment of Rs 9,000 crore over three years.

Significantly, the company, which entered retail by acquiring 170 stores of retail chain Trinethra Super Retail this January, will rebrand these stores “More”.

The company is looking at acquiring smaller retailers to rapidly gain share in the organised retail market that has players like Kishore Biyani’s Future Group, Reliance Retail and the proposed Bharti Wal-Mart chain.

The organised retail sector accounts for nearly 4 per cent of India’s $360 billion retail market.

Aditya Birla Group Chairman Kumar Mangalam Birla said the stores would be a mix of large hypermarkets of around 75,000 sq feet and supermarkets of 10,000 sq ft. The first store is being opened in Pune this June and will be positioned as a value-for-money outlet.

“The Indian shopping environment is underdeveloped due to the lack of economically viable real estate, a developed supply chain, trained manpower and backward linkages of suppliers. We will offer consumers more than what they expect. Hence the brand,” Birla said.

He said Aditya Birla Retail will hire between 10,000 and 15,000 employees over five years and establish direct linkages with farmers, vendors and suppliers to lower costs.

Products at the outlets, starting with food and groceries, will be a mix of private labels and brands. “The basic private label will be called More and the medium range Select,” said Aditya Birla Retail CEO Sumant Sinha.

Typhoo to hit India next year

The UK's iconic tea brand Typhoo is to be produced for Indian consumers by the start of next year. Apeejay Tea, which bought Typhoo from Premier Foods in 2005, will start production from a factory in Kolkata using tea from Assam, Nilgiris and Darjeeling. The company would not say whether this would affect future production from the UK factory in Moreton.

Diesel starts up in India with two stores

Diesel jeans will shortly arrive in India through the company's newly formed partnership with Arvind Mills, one of India's leading textile companies. Two stores will be opened this year, in Delhi and Mumbai with an extra 13 to be added by 2010. Arvind Mills also holds licensing or joint venture contracts with Tommy Hilfiger, Lee and Wrangler.

Spencer's Retail looking for international partnership

Spencer's Retail is inviting approaches from international brands to form partnerships for Indian retail opportunities. The group, which operates supermarkets, hypermarkets and music stores, is keen to establish a link with an existing lifestyle retailer or brand to capitalise on possible synergies. Talks are in progress with several international companies, the company says, but is still looking for other potential partners.

Dior investment to boost sparse Indian luxury sector

Christian Dior, the luxury fashion house, is to invest directly into India by taking control of its outlets, currently franchised, through a subsidiary company. Indian policy allows foreign companies to own up to 51% of a retail venture as long as it sells only a single brand. The move will allow Dior to invest in personnel, training and retail real estate. The company said it will invest Rs200m (£2.5m) over the next five years on operations and will sell accessories, clothing, shoes, bags and perfumes under the brand. It marks one of few moves by big name luxury brands into Indian retail to date. “At the real top-end luxury products, there's not much action yet,” Soumya Palchoudhuri, retail analyst at Ernst & Young, told The Retail Bulletin. “Gas, VF and Diesel have foreign direct investment approval, but they're really only mid-tier names.”Luxury boutiques that are present, including Louis Vuitton, Chanel and Jimmy Choo, are distributed mainly in five-star hotels. Plans for huge shopping malls in India are expected to change this however. Real estate developers are planning to build 143m sq ft of retail space in shopping malls over the next five years. The country's biggest mall, to be completed by 2010 in Bangalore, will devote its entire 695,000sq ft of retail space to luxury names.

Reliance retail to rollout in June

Forward Bloc may oppose it tooth and nail, but Reliance Fresh outlets will start springing up in the city within a month. The company plans to set up 200 Fresh outlets in the city and suburbs within two years. And, if Bloc continues with its resistance, Mukesh Ambani's company will procure agriculture produce from outside the state. Reliance Retail will make its intention known to chief minister Buddhadeb Bhattacharjee, who's been instrumental in wooing the Rs 4,000-crore investment, by next week. Reliance already has a supporter in mayor Bikash Bhattacharya, who has resolved to hand over the KMC-run Manicktala market to Reliance Retail. "If needed, I'll attend the Left Front meeting.... I am not scared of their questioning," the mayor said on Wednesday. Industry department sources, already in the know about Reliance Retail's extreme decision, said the company was no longer buying the government's apparent helplessness in granting the mandatory licence under the Agricultural Produce Marketing Control Act, thanks to the brouhaha by Forward Bloc. Only 5% of the commodities in Fresh outlets will comprise fruits and vegetables. Reliance Retail Ltd is now gearing up to purchase these agri-products from farmers outside the state. The APMC licence would have been necessary only if the company procured the products directly from farmers in Bengal. The other major components of the outlets will be groceries and dairy products. Reliance has been desperately trying to kickstart its agri-retail chain in Bengal since the CM announced the project last year. But the venture has hit a deadlock. "It's clear from the project submitted by RRL that there's no threat to farmers or small businessmen, as alleged by Bloc," an official said. In fact, based on the statistics provided by the government's Economic Review 2004-05, RRL has calculated that the volume of business from 200 Fresh shops would only constitute 0.5% of the entire Bengal market. "At the moment, 70% of the agri-retail value is being swallowed by only a handful of middlemen. This will stop once there is competition in the market." When told of Reliance's resolution, Bloc leader and West Bengal Marketing Board chairman Naren Chatterjee said: "If Reliance is trying to make forays into Bengal in this way, then we shall have to think of new strategies."

Kewal Kiran Clothing

Kewal Kiran has posted a Q4 net profit of Rs 3.2 crore in FY07 as compared to Rs 3.96 crore, YoY. It's Q4 net sales stood at Rs 30.6 crore as against Rs 25.1 crore on a YoY basis.
Nikesh Jain, CFO at Kewal Kiran Clothing, said an aggressive advertising spend resulted in a sqeeze in margins. Going forward, they will maintain selling and distribution margins in the range of 12-14%. Their focus in the current year will be on retail expansion.

Retail makes no room for small jewellers

Neighbourhood jewellers are fighting for survival as jewellery trade in the city gets organised. For convenient shopping, people are shifting their loyalty from traditional jewellers to branded showrooms. A leading jeweller and Jaipur Chamber of Commerce & Industry secretary Ajay Kala told ET that there has been a major shift in buying tendency of customers. “Customers now want value for money as gold rates are heading north. They look for guaranteed gold items rather than fighting the fear of adulterated stuff from small-time jewellers.” Showrooms also have the advantage of offering buyback schemes and guarantying the purity of the yellow metal. Out of around 2,500 ‘proper shops’ in the city, 100-150 small-time shops have been the casualty in this highly volatile market. For instance, Ram Babu Soni, a jeweller of Malviya Nagar, had to change his trade to make both ends meet. “One-and-a-half years back, when gold prices swelled from Rs 6,500 per 10 gm to Rs 10,000 per 10 gm, I had to close shop, which was doing well till then. With no capacity to hold gold for long and business drying up, I had no option left but to start a grocery shop.” Lack of funds has forced many jewellers like him to down their shutters. Gems and jewellery expert Ashwini Durlabhji said that traditional jewellers are now concentrating more on manufacturing and supply than retailing. “Lack of funds, rising gold prices and intense competition has marked the end of jewellery kiosks, which were once the feature of jewellery trade in Jaipur. Big-time jewellers are now outsourcing their gold jewellery demands from these lesser-known goldsmiths. “Jewellers who were once retailers are now engaged in fulfilling the market demands of branded jewellery showrooms. They are being paid for their labour and dexterity while metal is being provided by the showroom owners,” said Durlabhji. Besides, trendy and light weight jewellery has made a dent in the revenue of countryside jewellers. “Gold was just a safe investment for small-town people. They used to buy heavy jewellery during the marriage season. But now they also look for genuine, trendy and designer jewellery. And for that, they are heading for branded showrooms in Jaipur leaving their neighbourhood shops stranded. As a result, many shops are on the verge of closure while others are just meeting their expenses, said Ram Lal Sarraf, a jeweller in a small town Neem Ka Thana, 175 km from here

Times Business starts retail course

retail management courses in India, Times Business Solutions has commenced a certificate course in retail management. Launched in collaboration with Lady Irwin College, the course promises to provide professionals outfitted with industry-specific qualifications. “We want to offer a course that is totally customised to industry requirements. Association with the Times Group will help us get that industry interface”, said Sushma Goel, reader, department of CRM&E, Lady Irwin College. The course of 80 hour duration will have four modules with retail space, facilities, customer relationship and brand management as the thrust area. Retailers believe that such courses will help students understand the retail sector closely and develop the insight into dynamic market segmentation. “We hope that students coming out of this course will have all the necesssary soft skills and expertise, that will help our business to grow both horizontally and vertically”, said spokesperson, Barista. According to industry experts, besides inventory management, the course must also impart a holistic knowledge of employee engagement and commitment programme. The times group already has courses in field of journalism, marketing, business solution and sales

Raymond sees Rs 11-12 bn retail revenue by FY10

Raymond Ltd expects retail revenue to rise by two-thirds in three years, as the company increases the number of its stores to 950, a top official said on Tuesday. "We want to be present in every small town in India. We intend to significantly accelerate our presence in tier two cities," Aniruddha Deshmukh, Raymond's president for retail and fast moving consumer goods, told reporters. He said Raymond expected revenue from its stores to rise to 11-12 billion rupees in 2009/10 from 7 billion in fiscal year to March 2007, while the number of stores would rise to 950 from 433. The company also plans to increase the number of its franchised stores in neighbouring South Asian countries and the Middle East to 40 from 28 over the same period, he said. Raymond's shares closed flat at 338 rupees in the Mumbai market.

Reliance Fresh launches six stores in Indore

Reliance Retail Ltd today started operations in the central India with the launch of six pilot Reliance Fresh stores here. Announcing the launch, the company's President and Chief Executive (Operations and Strategy) Raghu Pillai said the Mukesh Ambani-promoted firm will set up such stores in 70 cities across the country by the year-end. "Within six months of launch, we have 151 Reliance Fresh stores across the country covering 419,000 sq ft of space." Allaying fears of the farmers and vendors, Reliance Retail group Vice-President Farhan Ansari said: "In fact, now the farmers don't have to worry about the marketing of their produce." The farmers will now have the opportunity to get the best price for their products at one place, Ansari said. Reliance Retail is building a business that would focus on competitive offerings to Indian consumers across several verticals in diverse geographies through multiple formats. This will be built on an integrated platform with a robust supply chain, logistics and information technology infrastructure, he said. However, protesting the entry of Reliance into fresh vegetable and fruits market, the local vendors set afire an effigy of the company's Chairman and Managing Director Mukesh Ambani here.

Oak Investment plans $200m retail fund

The US-based venture fund Oak Investment Partners is entering India with a $200-million corpus for the retail sector. It is perhaps the first time that any foreign venture capitalist has shown interest to set up a dedicated fund exclusively for retail start-ups in India. Ex-Tanishq COO Jacob Kurien and the CEO of a prominent food chain are likely to join the VC fund as its top team in India which is likely to start Indian operations early next year. Oak Investment Partners is a multi-stage venture capital firm with a total of $5.8 billion in committed capital. Investments are primarily focused on growth opportunities in enterprise application and infrastructure software, communication equipment and services, outsourced services, healthcare services and retail. Sources said that Oak general partner Jerry Gallagher, who was in India recently, visited the malls of all the major metros. He also held a series of meetings with mall developers and retailers and apparently went back convinced about the retail boom in India. Oak is looking at investing primarily in start-ups which are dime a dozen. The retail bug has bitten most execs and many of them are leaving their jobs to start something of their own. Sources said that a high-profile ex CEO is planning to partner with Oak in his retail venture. Jerry has sponsored 33 Oak bricks and mortar and e-commerce investments, including Baja Fresh, Caribou Coffee, Dick’s Sporting Goods, eStyle, Filene’s Basement, Jamba Juice, Office Depot, PETsMART, P.F. Chang’s China Bistro, Potbelly Sandwich Works, 2nd Swing, Ulta Cosmetics & Salon and Whole Foods Market

Sabziwalas get a new voice in George

Attacks on the three Reliance Fresh stores here took a new twist on Monday when former defence minister George Fernandes came in support of the protesting vegetable vendors. As authorities promulgated prohibitory order in the area and beefed up security around the Reliance Fresh stores, Fernandes, who is leader of the Janata Dal (U) and has always, been an activist against multinationals, arrived and vowed to fight what he termed as "injustice" being meted out to the vendors. "I have come here to fight against injustice done with the vegetables vendors," Fernandes told reporters at Ranchi airport. "I will meet the vegetables vendors and take stock of the situation." But residents of Ranchi purchased vegetables amid heavy security at the stores of Reliance Fresh - a project promoted by Mukesh Ambani-controlled Reliance Industries. Nearly 20 personnel of the Jharkhand Armed Police (JAP), wielding batons and automatic weapons, were deployed outside each of the three stores. "It was, indeed, a different experience to buy vegetables from Reliance Fresh shops. The heavy security arrangement makes it look like we are in insurgency hit Jammu and Kashmir," said Gautam Kumar, a consumer. The consumers also blamed the police for the violence on Saturday. "The district administration failed to provide security when it was needed," said Rita Mishra, another consumer of Reliance Fresh. Thirteen people were arrested for the violence and two policemen suspended for dereliction of duty following, which prompted the Prime Minister's Office to ask the Jharkhand administration to ensure peace and calm. This was the second time in a week when vegetable vendors took out processions to protest the opening of Reliance stores. The group buys the produce directly from farmers at comparatively higher prices and since middlemen are eliminated, it retails it at much lower rates compared to roadside vendors.

Mandis go corporate as pvt firms pitch in

AFTER retail revolution, it is time to corporatise the mandi, the wholesale market for agricultural produce. Companies such as Mukesh Ambani-owned Reliance Industries, Bharat Hotels, NCDEX, DCL Shriram group, Zoom Developers and RK Foodlabs are in the fray to become developer and operator of the country’s first private terminal market in Chandigarh.
A terminal market is usually a central site, or a hub, often in a metropolitan area, that serves as an assembly and trading place for agricultural commodities. The markets are linked to a number of collection centres, or spokes, and provide state-of-the-art facilities for grading, transportation , storage, domestic marketing and export.
Under the new proposal, the government has asked states to invite private participation in terminal markets to provide a state-of-the-art linkage to farmers for selling their produce at a better price. This would be the first big initiative of the government to tap private money for creation of modern agricultural infrastructure in rural areas.
The first such terminal market would be developed at Chandigarh, where the area authorities are set to open financial bids next month. Other locations for terminal markets include Hyderabad, Tirupati, Patna, Punea, Nashik, Nagpur, Bhopal, Indore, Jabalpur, Ludhiana, Jaipur, Chennai, Howrah and Kharagpur.
“We have received six proposals from corporates for setting up of terminal market in Chandigarh. Financial bids are likely to be opened on June 7 and final agreements are expected to be signed with the selected party by July. Other states are also in the process of lining up private partners and identification of land,” a government source said.
The commodities that would be traded at the terminal markets are fruit, vegetables, flowers, aromatics, herbs, meat and poultry. The markets would provide transparent auctions of commodities through electronic auction system. It is proposed to set up cold storage at each market with 2,000-15,000 million tonnes capacity.
“In order to facilitate backward-forward linkage in the commodities sector - which is quite poor right now - a minimum of 20 collection centres would be set up near farms. This way, the farmers will have alternative options to link with the supply chains, processing and export of commodities . The farmer would also be provided with an alternative option of taking his produce to terminal markets,” an official said.
According to sources, farmers’ share in consumer price of commodities would increase by 50-70 per cent by participating in the terminal market. At present, the share varies between 30 and 50 per cent for perishables depending on the location, season’s demand and supply.

Chain Reaction

The Happy Supplier Organised retail boom is not just about business for a handful of retailers and mall developers. Perhaps, the biggest, and the most prominent beneficiary of the retail story is the huge number of suppliers involved in the process. Worldwide, retailers source entire range of products from boutique suppliers and sell them by extending their private labels (retailer’s brand) to them. Internationally, the major chunk of margins for chains such as Wal-Mart, Tesco and Carrefour come from private labels. Indian retailers, including Reliance and Pantaloon, are already bullish about the concept of private labels and are sourcing heavily from small and mid-sized manufacturers, across categories such as food and grocery, personnel care and apparel. Says Deepak Seth, chairman, House of Pearl Fashions, a Gurgaon-based textile manufacturer, “Obviously, with the ongoing retail boom, a huge opportunity awaits the manufacturing sector domestically. The growing demand has many add-on benefits as well. In the process, many employment avenues will be generated, in the skilled as well as unskilled areas. At the same time, people with larger capacities like us, will also look for simultaneous opportunities in brands and retail.” Mr Seth’s company, which got listed recently, is exploring options in retail as well and has plans to set up a chain of 50-odd exclusive apparel stores in the next couple of years. Nikhil Nanda, the young promoter of Delhi based JHS, a manufacturer and supplier of dental care products to some leading FMCG and retail companies, has built the entire foundation of his business on the anticipation of an impending retail boom. Already a supplier to some big names in the global retailing arena, Mr Nanda is now equally bullish on the prospects of the retail boom in India. There’s, however, a flip side to the supplier story, and not every manufacturer is keen on the prospects domestic retail may have on offer. “Payment cycles are really weird and at times retailers even squeeze you with margins,” says P K Saxena, chairman of a Gurgaon-based small-cap Craftos. Why Not Your Own Brand? Perhaps, this is why the retail saga does not excite some of the bigger names in the manufacturing world. Says Orient Craft managing director Sudhir Dhingra, “In the near future, the export market will continue to remain our focus. On the domestic front, our priority will be on consolidating our own brand through various multi-brand retail outlets or even exclusive stores. Contract manufacturing for a private label is not on the radar yet.”

Triumph scaling up operations in India

Triumph, Switzerland-headquartered lingerie brand, hopes to set up flagship stores across six major cities by the end of this fiscal. “We are closely monitoring the market for setting up flagship stores and will soon enter the tier I cities, starting with metros like Mumbai, Hyderabad and Bangalore,” Thorsten Allenstein, country head & GM, Triumph International, told Indiaretailing.com. It is also learnt that the company is in final talks with retail players in Bangalore and Hyderabad for setting up its flagship stores.

The company’s new manufacturing facility in Chennai is underway, and is expected to commence commercial production by this November. At an investment of $30 million, the plant is expected to have a capacity to sew 20 million pieces a year. Raw materials got from Germany, France, Italy and Japan will be sewn at this 14-acre assembling unit in Maraimalai Nagar, in the suburbs of Chennai.

Triumph is available in 55 cities in India through 500 points of purchase including leading department stores, lingerie retailers and multibrand outlets. It also has exclusive franchisee outlets in Mumbai, Kolkata and Bangalore.

Triumph's India requirements are being met by a production centre in Chennai through Intimate Fashion – a company set up in joint venture with Bangalore-based MAST Industries, the makers of Victoria’s Secret. Triumph has 27 production centres across the world.

Raymond may launch low-priced apparel brand

Raymond Ltd is planning to add one more brand in its fold. The company is planning to come out with a low-priced apparel brand. Sources close to the development say that the company is looking at the prospect of launching a new low-priced apparel brand, but nothing can be said for certain.

Raymond Apparel Ltd makes brands like Park Avenue, Parx, Raymond and ColorPlus. Recently, the company made public its plans to roll out The Raymond Store (TRS) and other exclusive brand outlets (EBOs)."

Retail Space

Retailers in India are the most aggressive in Asia in expanding their businesses, thus creating a huge demand for real estate. Their preferred means of expansion is to increase the number of their outlets in a city, and also expand to other regions, revealed the Jones Lang LaSalle third annual Retailer Sentiment Survey-Asia.

Deutsche Bank's research report on 'Building up India' says India's burgeoning middle class will drive up nominal retail sales through 2010 by 10 per cent per annum. The country may have 600 new shopping centres by 2010.

Polo talks with Tatas for India splash

American fashion icon Ralph Lauren has set its sights on India. Informed sources said a business development team from the NYSE-listed Polo Ralph Lauren has held exploratory talks with leading Indian business houses, including the Tatas. Sources said Polo Ralph Lauren is in the midst of drawing up its Asia plans, with a regional team being formed in Hong Kong.

The company’s initial parleys featured prominent names such as the Tata-owned retail chain Trent, Arvind Mills, Madura Garments of the AV Birla Group and the Murjanis, who brought Tommy Hilfiger into the country. However, sources said the Tatas could well be the front-runner at this juncture, as its retail operations under Trent have been looking at sealing alliances in the super premium/luxury lifestyle space. Unconfirmed reports have linked another US luxury brand, Coach, to the Tata Group company.

Olympus eyes $20 mn top-line from India

Digital imaging company Olympus on Monday said it plans to invest Rs50 crore in India to set up six exclusive showrooms in major metropolitan cities, as it targets to double revenues from the country to $20 million this fiscal.

'We closed the last fiscal in India with a top-line of $10 million and with the double digit growth in the market coupled with new launches, we anticipate our revenues to double to $20 million in the current fiscal,' Olympus General Manager (Asia-Middle East Business group) Yoshitomo Nagashima told reporters here.

He said Olympus would sell its entire portfolio of products, including digital cameras, voice recorders and binoculars in India through its exclusive showrooms.

'The company would invest Rs50 crore in opening six showrooms in the country. These showrooms would be owned by the company but would be managed by its authorised distributors,' he said.

Olympus exclusive showrooms would come up in cities including Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad.

The company on Monday launched its range of water-proof, shock-proof digital cameras priced between Rs15,995 to Rs41,995.

Olympus' products are present in over 2,000 multi-brand outlets which the company plans to increase to 3,500 in the next six months.

The company operates in India through a subsidiary - Olympus India Pvt India - and has tied up with three distributors to market the products."

Big Apple to open 100 retail stores by August

Big Apple, the Indian version of the popular US retail chain 7-Eleven, plans to open 100 convenience stores in the national capital and surrounding areas by August to cater to the urban consumers.

With shopping becoming another casualty of long working hours, Express Retail Services Pvt Ltd is rapidly expanding its Big Apple chain of convenience stores with 25 stores already merchandising 2,500 products including FMCG, grocery, fruits and vegetables, company managing director Munish Hemrajani said told PTI here.

"I have a kitty of Rs 100 crore which I have to exhaust by March 31, 2008," he said. "We just opened our 25th store in Delhi and by August we will be 100 stores."

The stores will remain open from 7:am to 11:pm.

After August, Big Apple will expand into cities adjoining the national capital to double the number of stores to 200.

In the second phase, expansion is planned in Karnataka and Gujarat, he said.

The company's stores are doing an average sales of Rs 16 lakh per day and it is just six-month away from break- even. "We are just two per cent away from break-even."

A typical Big Apple store is 1,500 to 1,800 sq feet and stores over 2,500 product merchandise, he said and claimed it was way ahead of competition from Reliance Retail's neighbourhood stores and Subhiksha. "We change product line every 90 days based on customer acceptance and demand."

The Rs 40 crore company has a direct tie-up with farmers in Haryana, Rajasthan, Himachal Pradesh and Uttar Pradesh.