Koutons enhancing Product portfolio

Koutons Retail introduced accessories and shoes in its stores during FY09. Accessories are available in all stores while shoes are available in approximately 200 stores. The share of Les Femme (i.e. ladies wear) and Kids Junior (i.e. kids wear) increased during the year to 12% collectively against 2% share in FY08. These products yield better margins than menswear and would cushion the profitability during difficult periods.

To capitalize on the brand popularity, the company is now focusing on family stores. These stores are bigger in size with an approximate size of 2500-3000 sq ft per store. All the brands, namely, Koutons, Charlie Outlaw, Les Femme and Kids Junior are available in these family stores. At the end of FY09, the company operates 182 family stores.

Our Analyst has compiled the Revenue Breakup Chart of Various Brands of Koutons Retail for FY 2009.

Tata Croma to expand its product portfolio

Tata Croma, owned a by Infiniti Retail and a 100% subsidiary of Tata Sons, intends to augment its product portfolio under the private label category to 100 in the present fiscal. Presently, this electronics retain chain has portfolio of 46 products.

The company will introduce private label brand called Handpicked by Croma' that would be launched in festive season of Diwali. Croma plans to introduce niche personal care products in the categories such as jewellery cleaner and wine cooler, which needs lesser R&D.

The company plans to unveil 12 Croma Zip stores with a capital outlay of Rs 24 crore. Coma Zip is a smaller format store that is spread on land area of 2,500 sq ft to 6,500 sq ft. Presently 3 such stores are being operated in India.

While the small-format stores require a capital of Rs 2 crore, the large format of Croma which is spread over on land area of 10,000 to 15,000 square feet requires an investment of Rs 3 crore an aove. Beside Croma ZIP, the company will also set up over 11 Croma stores.

Future Group's Kshitij into Mall + Realty Venture

Kishore Biyani was doing an excellent job [in our opinion] by taking the best advantage of first mover into the nascent organized retail sector and completely focusing on Retailing. However, the group now wants to enter Retail and Mall management and dveleopment through Kshitij Retail Systems..

The goal of Kshitij Retail Systems will be to be a Mall development and management company - from procurement and maintenance of equipment, leasing out shops and advertising space to interested parties, security, accounts, common area maintenance and marketing.

Future Group will launder some of its retail properties such as Pantaloon stores, CR2 or Sobo Central and some retail assets owned by its real estate domestic fund, Kshitij, to the new entity. The new entity will also acquire malls from real estate developers. The company will focus on centers located in prime trade areas. Cross holding among various group companies is another area of concern as transparency is an issue.

The Balance sheet of Pantaloon Retail is already strained and moving into Retail Management is fine but Retail Realty will dig a deep hole into their pocket and may affect other flourishing retail businesses of the group.

Gitanjali Gems acquire MobileNXT - Hoop is New Brand

Gitanjali Gems has announced that it is going to acquire 70% stake in Bangalore-based mobile retail chain operator MobileNXT through its wholly-owned subsidiary, Gitanjali Lifestyle (GLL).

GLL has entered into an investment cum shareholder's agreement with MobileNXT for the same.

MobileNXT is present across 21 stores in southern parts of the country and in tier 2 and 3 cities and its stores are a one-stop shop-offering host of telecom related products and services.

However, as per the terms of agreement all the MobileNXT stores will be reinstated as "Hoop" stores and will display "personal fashion accessory" that offers a wide range of fashion jewellery, watches, eyewear and the latest as well as trendy mobile phones and accessories at affordable prices. The products would be targeted at the youth and young adult both female and male.

Azim Premji in Legal Battle with Subhiksha

Zash Investments, the VC firm promoted by Azim Premji has entered into a legal battle with bankrupt Subhiksha as the former has sent legal notices to the Board of Directors, Independent Consultants and Sr. Executives on discharging their duties.

Zash Investments has alleged that Subhiksha's Board had concealed the true financial health of Subhiksha when the former made Rs 230 cr investment a year ago. Subhiksha was headed by former IITian and IIM-A graduate Mr. R.Subramanian with his bitter skills has managed to make a mini-satyam like fraud.

Zash Investments said,

Premji Invest feels that the liabilities of every board member be fixed for the collapse of the retail chain. No member, either ICICI venture nominee or independent directors, can actually plead innocence, as they were in the control of the company before it collapsed.

The company is undergoing restructuing including infusion of debt to bring it back to operations. However, the company has also failed to pay employee salaries, PF etc and has mounting liablities from vendors as well and is unlikely to see the light very soon.

Pantaloon's Value Format sees Pick up in Demand

In an Analyst meet, the Sr. Executives of Pantaloon Retail India Ltd including founder Chairman and Pioneer of Indian Retail Kishore Biyani sounded positive about the business. Here is an excerpt from the same.

• Consumer demand has picked up sharply in the last two weeks, and the company has various alternate funding plans to expand its business
• The management has also expressed its intention to improve transparency through better communication with investors.
• Consumer spending in some categories [Food, Apparels] is nearly back to the peak witnessed in the last 18 months.
• Home Town Retail had been particularly badly hit in this downturn; it is now witnessing a sharp reversal in growth trend, furniture and furnishings.
• Management still cautious about costs. Growth should not be chased but should be well measured
  
• Entering new business shall be calibrated
  
• No employee addition in the past 6 months but company managed to add 10% new retail space [see chart below]
• Future Group is not interested in picking any struggling retail business in India but believes competitors like Aditya Birla, Tata, Shoppers' Stop etc are likely to continue to build their retail businesses and will emerge as some of India’s significant retailers.

The chart below shows format wise retail space of Pantaloon / Future Markets Consumer Group, so far the largest retailer in India.

Peter England - Value Format in the Offing

Early 2007, executives at Aditya Birla Nuvo restructured the company's retail operations with focus on Middle Class and higher. However, with the slowdown, they have now decided to include the Value Format which forms the bulk of modern organized retail in India. Peter England Fashions will start a separate division which will look into the Value Fashion Format. Arvind's MegaMart is one such chain and is expanding rapidly.

The company will revive brands Elysee, Byford, SF Jeans and Spin Off to find relevant markets. You can recall that the company had rolld out Peter England People - as family apparel a year back betting on the brand equity enjoyed by Peter England. Mr. Aloke Malik, President of Peter England said,

Response generated at the store-level, over the past few months, suggests that the consumer is downtrading across the apparel spectrum. From premium brands to the mid-priced segment, consumers are shifting to hypermarket offerings. We realised that People and Peter England have different brand characters. While Peter England is a more sober formal brand for men, People is being positioned as a fashion-forward unisex brand, primarily targeted at the 20-30 year-old junior executive, that will push the boundaries within the midprice segment, laying emphasis on fusion wear for women.

Peter England is retailed at 2,000 PoS and 350 Exclusive Outlets which is likely to be ramped upto 500 within the next 12 months. The company did not discuss any rollout strategy for Value format but its ha been tippd that the stores will be in the range of 2,000 to 3,000 sft and will be targeted across PAN India.

Shoppers Stop - Private Label Business Outlook

Shoppers Stop has a range of Private Labels across Men's casual wear to formals to Women's wear. Private Labels contribute a mere 20% to its Total Sales. In comparison, Private Labels contribute around 85% of Pantaloons' Total Sales.

Here are the Private Labels Sold in Shoppers Stop outlet,

• Kashish - Mens's Ethnic Wear
• Stop - Western Wear - Men & Women
• Life - Mens Casual Wear , Jeans Wear
• Mario Zegnoti - Men's Formal Wear
• Acropolis - Men's Formal Wear
  
• Push and Shove - Eye Wear
• Vettorio Fratini - Premium Men's Wear
  

SSL's Private Labels registered Sales growth of 17% in FY2009, but contribution from the same
dipped albeit marginally to 19.9% in FY2009.