IndiaRetailBiz

Aditya Birla Retail Ltd, (ABRL) — a retail initiative of multi-faceted Kumar Mangalam Birla group– which closed 107 under or non-performing stores in the past few months, is back on expansion mode. ABRL is currently operating 642 supermarket stores and five hypermarket stores across 12 states occupying 1.9 million sq ft of retail space.

After setting up five hypermarket stores in quick succession at Mumbai, Mysore, Aurangabad, Indore and Bangalore (while Mysore store was acquired, the second hypermarket store at Vadodara has been closed), the retailer is looking forward to setting up three more hypermarket stores and over 50 supermarket stores this financial year before 31st March, 2010. This will take tally of the stores under two formats (super and hyper) to over 700 in this fiscal. In the next 5 years, the retailer is aiming to expand its presence five-fold as it is planning to occupy total space of 10 million sq ft by 2015.

Thanks to the acquisition of Hyderabad-based Trinethra retail chain in 2007, bulk of the retail chain’s supermarket stores, numbering around 400, are located in the South. After being renamed, all Trinethra stores, are now also operating under the brand name of ‘More’ or ‘More for you.’

The Rs 1,130 crore retail outfit of the group is expecting its Southern stores to begin making profit in the next few months. The turnaround in this region makes commercial sense as the stores in the South– most of which were operating as Trinethra outlets– are much older in age than their counterparts in other regions.

After pruning non-performing stores, productively utilising space, optimising displays and SKUS, and keeping property rents below 5 per cent of expected revenues, ABRL is expecting to fully turnaround operations of the company within three financial year by March 2013.

“We are half-way down the walk and we have another half-way to cover in the next 2-3 years,” said Verghese.

While, ABRL continues to remain averse to strategic partnerships with foreign partners, it is open to further acquisitions within the retail space. Having pruned down original plan of investing Rs 10,000 crore in the retail business, the company, according to Verghese, will approach capital market with IPO only after it has broken even.