Pantaloon - Future Group - Controlled Growth Strategy

The Management of Pantaloon Retail India Ltd has told during an interaction about the company's calibrated approach to growth. Here is an excerpt on its strategy going forward.

Company is looking at unlocking value in the value retailing (Big Bazaar) format, where they believe they have reached a critical size. Management said they are in 6-7 strategic discussions with different parties. They didn't specifically comment on Carrefour, Bain etc.

Mr. Kishore Biyani said,

PRIL got into too many spaces, too soon, in trying to capture consumption at various levels. Also, the company expanded in a growing high cost economy, for beating competition. Now sober from the slowdown, the company will take a more calibrated approach towards expansion. We are envisaging some strategic moves on the insurance and financial services business (Future Capital).

PRIL will look at consolidating its existing businesses in three buckets: (a) retail, (b) financial services and (c) support businesses (Future logistics etc), in that order of priority. Anything that doesn't fit in any of these three would be disposed off.

Inventory psf is targeted to be brought down to Rs1600 (from Rs1849 psf in FY09) through big investments in the supply chain, back-end and warehouse management.

New private Label Ekta - Ekta is a branded food staples product directed at specific communities. The company is also planning to launch its own brand of toothpaste.

Space addition of 3m each is planned over the next three years (consolidated entity). Future expansion will be centered on food, fashion, home, general merchandise and electronics.

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Palladium Mall - High Street Phoenix Opens for Business

Phoenix is likely to do a soft opening of Palladium, its high-end luxury mall, today at High Street Phoenix (HSP), Mumbai, and make it fully operational within one month. 'Palladium covers a leasable retail space of 325,000 sq ft with B+G+3 floor levels. Landmark, the mall's anchor client, will cover ~40,000 sq ft in the basement while the ground plus three levels will be retail space.

Phoenix expects blended lease rentals of Rs 220 per month from Palladium. In this soft launch, 75-80% of the area (excluding ground floor) has been leased out at ~Rs 185 per sq ft. The company expects to generate higher rental rates for its ground floor by leveraging on the mall's location. We expect the mall's occupancy level to cross 95% once it becomes fully operational.

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SRS Jewels Faridabad - Betting on Diwali Shopping

SRS Jewels - The flagship brand offers Certified Diamond and Hallmarked Gold jewellery. The company has already doubled the size of its first exclusive SRS Jewels store located at SRS Mall, Faridabad, Haryana and plans to open 5 more SRS Jewels stores with an investment outlay of about Rs. 50 crores by the end of year 2010 in Delhi, Gurgaon, Noida, Palwal and Ghaziabad.


Dr. Anil Jindal, Chairman & Managing Director, SRS Group, said

SRS Jewels retails jewellery items to suit every budget and taste. Whether one is looking at jewellery for special events or for regular use, SRS Jewels is the one stop destination for discerning customers.

The response to our first SRS Jewels store in Faridabad has been overwhelming. Due to consistent demand from our customers, we have added a new and exciting range of products including various forms of jewellery such as Kundan, Polki, Bengali and Hyderabadi designs.

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The Collective Goes Casual + To Smaller Store Formats

The Collective - Luxury menswear brand from the Aditya Birla Nuvo after a years learning curve is going casual and into smaller formats.

In its over 12 months of existence, it realized that most of its customers are in the age group of 30-35 and are interested in shopping for casual wear rather than designer suits / linen fashion and accessories.

The Collective Casual will be the new brand name of the entity which will be housed in stores of about 5000 sft in size. The Collective retailed Armani Collezioni, Collective Casual will retail Armani Jeans and Leisurewear. The entry level pricing has also been brought down. The first two stores are already under construction in New Delhi and Mumbai. Hyderabad and Chennai will get these stores 12 months from now.

As the market will turnaround, The Collective is on its way to make big bucks as first generation entrepreneurs and corporate executives get rich and bump up their lifestyle to be unique and leave the mark of the man wherever they move :-)

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Shoppers Stop - Luxury Focus + Expansion - Acquire 51% in Hypercity

Falling retail sales will be hing of the past. Here is an analysis after discussion with the management of Shoppers Stop, India's leading Lifestyle Retailer.Shoppers Stop plans to open 16 stores over the next 40 months (about 4-5 stores with a capital outlay of Rs750mn per annum).While its specialty segment, Homestop (four stores of consumer durables and furniture) and Arcelia (two high-end cosmetic stores) are still in Red and the management is reviewing their operations closely.

The company plans to focus on the luxury segment and will likely continue to provide an assortment of branded products under one roof. Its standalone stores, Clinique, Estee Lauder and Mac cater to high-end beauty product requirements and its department stores offer more than 30 brands of watches. It has clearly been focusing more on non-apparels (beauty products, accessories and jewellery) where the through-put is higher.

The menswear segment has been languishing. To improve same-store-sales-growth in the menswear segment, the company is expanding its product offerings to include brands such as Tommy Hillfigure, Calvin Klien, French Connection, etc. This would help Shoppers Stop in tapping the premium layer of customer traffic.

For the first time, management admitted that Shoppers Stop plans to exercise its option to increase its stake in Hypercity to 51% from 19% currently ata premium of 10%.

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Lingerie Sales + Average Price Rise Despite Economic Downturn

Lingerie Retail a niche retail market in India has bucked the trend of slowdown and is seeing rising sales. Triumph, etam and others who dared to venture into this niche to pamper the smart and hardworking Indian women are laughing their way to the banks. Triumph which launched in 2002 priced its SKUs between Rs 200 and Rs 450. They have now marked up their pricing to s 200 and can get as expensive as Rs 3,000 a piece. Triumph's best selling range is between Rs 1100 and Rs 1400.

Triumph which has rich experience of retailing woman's lingerie, corsets, intimates, sheer, thongs, sleepwear hasn't even launched its Luxury collection yet. However, the company tested waters with limited edition bra's using Swarovski crystal's priced at USD 1,000 a piece.

The main consumers for upper end Lingerie in India are woman aged between 25 and 35. Organized retail size of this market is expected to be INR 1000 cr of which Triumph is the leading brand in India.

Another retailer sizzling on the success of lingerie and intimate-wear retail is Shoppers Stop. The company has seen its sales rise by whopping 36% in 2007-08 and 20% last year. Average price has moved up from Rs 278 to Rs 409 in the past 3 years.

Sure the Indian woman is lucky enough as Managers @ Victoria's Secret, Frederick's of Hollywood, etc will come looking to pamper the Indian woman with world's best. Will they face a challenge from Desi retailers ?

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