Apart from adding kids’ line to its range of men’s apparel and accessories, the brand is now looking at launching a range of footwear and eyewear products for women (source). While, ‘casuals,’ account for nearly two-thirds of the brand’s total turnover, balance one-third is contributed by formal and evening wears respectively in almost equal measures.

“We are looking at stratification of the wardrobe. While more casual lines have been introduced, we are looking at widening our product basket. It is not a transformation from formal to causal but an upgradation to include a larger product assortment,” said R. Satyajit, Chief Operating Officer, Allen Solly. “There has been a significant growth from our casual wear portfolio. We hope the new line will also attract consumers,” added Satyajit.

To augment its line of products and offer contemporary designs and styles, Allen Solly has also engaged services of Shombit Sengupta-led, “Shining Strategic Design” a well-known and reputed design and consultancy house.

The company, according to Satyajit, is also expanding its retail presence. It plans to open 60 stores. “We are looking to double every two years,” said Satyajit.

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.

The growth of about 42 per cent, according to the company’s chief executive officer Thomas Varghese, will be achieved through growth in same-store-sales (SSS) and opening of new stores during the current financial year.

After closing around 110 under-performing stores last year, the retailer is currently operating 641 multi-format general merchandise stores under the brand name of “More” across the country. This number also includes rechristened stores of erstwhile Trinethra retail chain. The Hyderabad-based retail chain was acquired by the Birla group company in early 2007.

While, around 25 per cent of growth will be achieved through increase in sss, the balance growth, according to Verghese, will be through unveiling of new stores.

SSS in retail industry is considered as an important parameter to gauge sales trend as this is a reflection of organic growth achieved by the company.

As far as the new business through the opening of additional stores is concerned, the company is seeking to adding around 70 new ’supermarket’ format stores across the country through the current financial year. This will take the tall of stores from 641 at present to around 710 by the end od of 31st March, 2010.

The retailer is also looking at setting up 10 to 12 hypermarket format stores called “More Megastore.” Presently, four stores of this format are being operated by the retailer.

While, supermarket format stores occupy 2,000 to 4,000 sq ft of space, hypermarket format stores occupy over 50,000 sq ft of space.

As reported earlier, the retailer is also focusing on increasing the share of business from ‘private labels’ with a view to improve profit margins as branded consumer products offer little margin.

Van Heusen, the leading formal wear apparel brand mainly catering to the needs of men, is looking at adding new stores across the country to aggressively expand its business.

Van Heusen, a leading global shirts brand of Phillips-Van Heusen Corporation– a Dutch fashion powerhouse–has been perpetually licenced for India to Madura Garments Lifestyle & Retail, a leading lifestyle apparel company of Kumar Mangalam Birla-led Aditya Birla Group.

Apart from Van Heusen, Madura Garments has revolutionised the country’s readymade apparel and retail business through brands like Louise Philippe, Allen Solly, and Espirit. The group also operates several other apparel businesses including Peter England Fashions & Retail and the Collective.

Van Heusen is planning to increase its retail network by 40 per cent this year, as it gets ready to set up 25 new stores to its existing network of 65 stores. Apart from flagship format, Van Heusen, caters to clothing and fashion needs of men, women, and youngsters through exclusive formats, including “V Dot” for gen-next.

Apart from offering lifestyle formal wear for men, women and youngsters, the brand, according to a Business Line report, will be adding new product lines for all occasions and also introducing a new range of fashion accessories.

“We are getting future-ready by turning ourselves into a complete lifestyle brand. This means we will be retailing not just formal wear but also introduce denims, club wear, accessories and innerwear at our outlets,” Mr Shitalkumar Mehta, COO, Van Heusen.

The company’s womenswear business, which was added a few months ago, is doing quite well. “At least 10 per cent of our turnover comes from the womenswear,” said Mehta. Van Heusen is also introducing a super premium menswear range called ‘Heritage’ by September, 2009. In this range, while the shirts will be priced at around Rs 4,000, the suits will be offered at Rs 35,000 and above.

As a part of promotional exercise, the leading lifestyle fashion brand will also organise a has Men’s Fashion Week. For this purpose, the company has entered into an agreement with the Fashion Design Council of India.

The brand has also chalked out an aggressive plan for marketing its products. It plans to spend Rs 20 crore, or roughly 5 percent of targeted turnover of Rs 400 crore, on such activities this year.

“Finance minister’s silence on (easing) FDI norms in retail is a dampener.  I feel the finance minister should have also done away with service tax on rentals, which is currently at 12.5%,” Thomas Varghese, CEO, Aditya Birla Retail.

“The abolition of the fringe benefit tax (FBT) and scrapping of the 10% surcharge on personal income tax would leave more money in the hands of consumers. Increasing expenditure in infrastructure and hiking the income-tax ceiling will increase consumption, which is good for [retailers like] us,” said Kishore Biyani, Founder and CEO, Future Group.

“It is a good budget, but it could have been better. FDI norms have not been touched upon. There were no sops for the retail industry in terms of allowing for greater penetration, despite retail providing employment to a large number of people,” said Ambeek Khemka, Group President, Vishal Retail.

“Lack of clarity on FDI norms is certainly a “negative,” said R Subramanian, Managing Director, Subhiksha Trading Services.

“The abolition of FBT and CTT is the only good thing that has come out of this budget, but there is nothing for the short term,” said V N Dhoot, Chairman, Videocon Industries.

“While, customs duty of 5% on import of set-top boxes (used for the conditional access system) is a negative, slashing of customs duty on LCD TVs to 5% from 10% earlier is a good move. I hope the manufacturers help us pass this benefit on to the consumers, ” said Ajit Joshi, CEO, Infiniti Retail (Croma).

“The budget is a big disappointment. No fundamental or structural issues related with the sector, including FDI and industry status for retail, or reduction in service taxes have been addressed,” said Pinaki Ranjan Mishra, Partner and Industry Leader (Retail and Consumer Product Practice), KPMG. “Steps like extending investment- linked tax incentives in cold storage and hike in income tax ceilings will, however, bring some benefits,” added Mishra.

“The Budget has addressed basic issues, for instance, the Rs 100-per-day wage. In that situation, the rural and urban poor spend with different mindsets. Their spending remains basic and doesn’t necessarily become consumption as we, consumer marketers, would want it to be. At best, the Budget would somewhat cheer rural folk and could spell a favourable rural vote bank for the government,” said D Shivakumar, Managing Director, Nokia India.

“The Budget is silent on FDI too. Apart from some movement in infrastructure and macro-economic issues, it doesn’t promise much. As a retailer, I rue the fact that there’s dissonance in the taxation policy of the Central and the state government. For example, the Maharashtra government has hiked VAT on mobiles from 4% to 12%. The government will have to take a comprehensive look at policies to spur growth to tackle slowdown and unemployment. And that hasn’t happened in this Budget,” added Shivkumar.

ABRL, which currently operates a retail chain of around 650 food and grocery supermarket format and hypermarket format stores under the brand name of ‘More for You,’ according to Thomas Varghese CEO, achieved sales of nearly Rs 1,150 crore during the financial year ending 31st March, 2009 (2008-09) against previous year’s turnover of around Rs 550 crore, is expecting to garner sales volume of about Rs 1,700 crore this fiscal ending 31st March, 2010 (2009-10).

Buoyed by the growth, most of which has come from expansion of the retail network, the company is looking at taking the tally of stores to 720 to 730 stores by adding 60 to 70 stores (80 new stores less 10 t0 20 stores under shut down) during the current financial year ending 31st March, 2010. The company’s focus this year is on opening Hypermarket stores. Against teo hypermarket format stores being currently operated by the company at Mysore and Vadodara, plans are afoot to add 6 to 8 new hypermarket stores of 65,000 to 70,000 sq ft size each, this fiscal. Four of these are expected to be unveiled at Aurangabad, Indore, Mumbai and Bangalore by September, 2009.

Having opened a total of 710 stores in the first 20 months of commencement of business, including the stores of Hyderabad-based retail chain ‘Trinethra’ that was earlier acquired by the group, ABRL in a massive exercise of restructuring operations closed down 76 under-performing stores in the last six months. The company is preparing to also close down a few more stores, numbering between 10 and 20, in the next few months.

“That was part of my cleaning up operation. The last six to eight months have been a wake-up call for the industry. We are going to focus on consolidation this year,” said Verghese while talking about closing of stores to PTI.

Aditya Birla Retail, a retail initiative of Kumar Mangalam Birla group, which began operations in 2007 after acquiring operations of Hyderabad-based Trinethra superstores retail chain, according to an ET report, is believed to have incurred a net loss of Rs 534 crore on sales turnover of Rs 1,030 crore in 2008-09.

The company sources, however, said that losses are a part of initial investments as the period of gestation in retail business is quite long. While refusing to confirm the financial numbers to the newspaper, these sources have maintained that the company’s retail business is on track.

Apart from operating two hypermarket stores undre the umbrella brand name of “More.. for you” at Mysore and Vadodara, the retail arm of the group operates around 670 supermaket format, neighbourhood food, grocery, and general merchandise, stores across the country. These stores include the erstwhile stores of Trinethra retail chain, which after the acquisition were also rechristened as ‘More’ stores.

More, under the stewardship of its new CEO Thomas Varghese, an old Birla hand, who was roped in after the Sumant Sinha, has taken several initiatives to revamp the operations of the loss making chain. Some of the initiatives include:

• Close some of the non performing stores.

• Take a re-look at the design, positioning and merchandise offered by the retail chain.

• Focus more on large sized stores. The retailer will set up hypermarts of 30,000 to 40,000 sq. ft. spce each.

• Aggressively expanding the retail network; add 200 Supermarket stores and 12 Hypermart stores in 2009-10.

• Renegotiation of property rentals for almost all leased properties with their landlords. The rents in some cases have come down by 30 to 40 per cent.

• Introduction of private labels, mostly in fast moving consumer products category, to increase share of private lablels to 40 per cent in the next 4 to 5 years.

• Look for earning rent from ’shop-in-shop’ opportunities. Recently, ‘Dial for Health’ wellness retail chain owned by Zydus group has inked an agreement to set up such outlets in Gujarat and Maharashtra.

• Look for a financial partner. “We are not looking at a strategic partner. We will be happy to have a financial partner. We have received lots of preliminary interest from investors. We would be open to this idea,” said Kumar Mangalam Birla. Some private equity firms like Warburg Pincus are believed to have shown interest equity stake in the company.

Aditya Birla group, incidentally, also operates 340 apparel stores across the country of brands like Louis Phillippe, Van Heusen, Allen Solly and Esprit in the lifestyle and value fashion segments. These stores are operated by Madura Garments Lifestyle & Retail and Peter England Fashions & Retail, which are part the group’s flagship company Aditya Birla Nuvo. The garments business, which clocked Q4 turnover of 273.3 crore (2008-09) and a nett loss of Rs. 82.2 crore during the quarter, has also embarked on several measures to stem the rot, including closure of 30 stores that will save around Rs 100 crore a year.

“In the current quarter, we plan to close 30 of the 340 stores where sales persquare feet have dropped significantly. We expect to save Rs 10 crore annually with the closure of these unprofitable stores,” said Pranab Barua, whole-time director of Aditya Birla Nuvo and chief executive of the textile and apparel business, Aditya Birla Group.

The retail arm of the company operates 340 stores of several well-known fashion brands like Louis Phillippe, Van Heusen, Allen Solly and Esprit in the lifestyle and Peter England brand in the value segment of the fashion retailing business across the country.

After closing 150 unprofitable stores, ABN is planning to open 150 new apparel stores in city centres that offer good business potential. The company is going to put special emphasis on reviving Allen Solly brand as it is not doing as well as other garment brands in the lifestyle business.

“Van Heusen, Louise Phillippe and Peter England were doing very well when Allen Solly sales was falling,” said Barua.he said.

Apart from closing down 30 unprofitable stores, the company is also initiating a number of steps to reduce costs and improve efficiencies.

“We will align all growing businesses and close the loss-making stores. Moreover, we have a plan to reduce the store area in some cases,” added Barua.These measures are likely to result in savings of around Rs 100 crore in the fiscal 2010.(via)

Carrefour SA, Europe’s largest and the world’s second largest French retailer, which had earlier announced setting up of its first cash & carry wholesale store in India by March 2010, according to reports based on reliable sources, has expanded scope of its partnership discussions in India from Kishore Biyani’s Future Group to other big ticket large retailers like Mukesh Ambani’s Reliance Retail, Kumarmangalam Birla’s Aditya Birla Retail Ltd and RPG’s Spencer’s Retail Ltd.

Although, the European retailer has strongly refuted the news that it has already signed a partnership agreement with Mukesh Ambani’s Reliance Retail, some in the industry believe that it is only a matter of time when Carrefour SA and Reliance will unveil the details of their partnership in India. To be fair to Carrefour, it has issued a statement in this regard, according to which the group “refutes the signature of a pertnership with Reliance Retail. Our priority is the opening of our first store of cash & carry at the end of 2009 or the beginning of 2010. Incidentally, on the hypermarket level, we pursue our analysis of every opportunity of partnership. At the moment, no signature of partnership occurred”.

It is significant from the statement issued by Carrefour that it has neither denied the fact of having held talks nor has denied existence of any understanding with Reliance Retail in this regard. It has only refuted the fact of having not having signed a partnership Agreement with Reliance Retail.

While Reliance Retail has accepted the fact of having held talks with Carrefour on “how we can work together,” Aditya Birla Retail has denied having “ever” held any partnership talks with the French retailer.

Irrespective of the outcome of ongoing parleys for hypermarket format retail with Indian retailers, Carrefour will continue with its plans of unveiling its first wholesale ‘cash & carry’ store in NCR (near Delhi) area by the end of this calendar or this fiscal.

go ahead irrespective of whether the French company is able to forge a local partnership or not, said one of the persons mentioned earlier. Interestingly, Carrefour is the only company among the world’s top four (Walmart, Tesco plc, and Metro AG) that has yet to firm up its plans for foraying into India. As per current policy guidelines, while foreign retailers are allowed to bring 100 per cent equity in cash & carry ventures, they are not allowed to invest any capital in multi-brand, front-end, retail business. Single brand foreign retailers, though are allowed to hold up to 51 per cent equity stake in front-end business in partnership with a local retailer.

The introduction of private labels in general and for products under value segment in particular has now become the main mantra of changing retail strategy. While, on the one hand, this reduces their dependence on national brands, on the other it helps to improve profit margins.

According to KPMG, the global research and consultancy firm, which released its ‘Indian Retail: Times to Change Lanes’ report on Tuesday, “Private labels are likely to continue to grow in the current financial environment as cash-strapped consumers’ perception of the products as a ‘cheaper option’ changes. Part of private label growth in a recession is permanently sustainable.”

According to Ramesh Srinivas, National Head (consumer markets) at KPMG Advisory Services, “Many retailers are increasingly focusing on their private label offerings now. They are realising the importance of the value segment. Even though profitability, footfalls and conversions have fallen, there is enough scope for retailers to develop newer product categories.”

Private labels now offer a respectable share of around 10-12 per cent in the overall product mix of organised retail.

While, private labels business is quite popular among fashion retailers like Shoppers Stop, Pantaloon, and Westside, among others, all major food and grocery retailers like Future’s Big Bazaar, Reliance’s Fresh, Birla’s More, RPG’s Spencer’s, and Bharti’s Easyday, among others, have in recent times unveiled strategies for increasing the share of ‘private label’ business.

Birlas are looking at increasing the share of their ‘private label’ business from 3 per cent at present to 15 per cent of their revenues in the next three years.

Kishore Biyani of Future Group has even decided to take his private labels, particularly under FMCG category, beyond the confines of his own chains by making them available at other retail chains. In fact, according to a strategy recently unveiled by him, he is planning to achieve a turnover of Rs 10,000 crore from private labels under different categories in the next four years.

Kishore Biyani’s private label ‘Tasty Treat’ for ready to eat snacks already contributes 20 per cent of the potato chip sales across the chains. “We are now going to launch our own toothpaste. Even if it gains a 15% market share among the top-selling toothpastes in the country, I will be happy,” says Biyani.

Even lifestyle retailers like Tata’s Croma and Ruia (Essar)’s The Mobile Store, according to a DNA report, are looking at introducing private labels for consumer durables. While Croma has already introduced products like laptops, air-conditioners and microwaves, The Mobile Store is preparing for launching low cost mobile phones. Croma is expecting its private label to contribute 20 per cent of its business, as it has already tasted success with sale of microwave ovens selling over 3,500 pieces of the same since its launch.

The expansion will be through a mixed model of ownership, namely, franchise and company owned.

The grooming and beauty business, despite the economic slowdown, has been growing in India. “The demand for in-salon skincare treatments is growing at 40-45 per cent annually. We are looking to make our presence felt in the sector,” says Dharmendra Manwani, CEO, Jean Claude Biguine House of Beauty. The demand for in-salon skin care treatments by men is also increasing by 40 per cent per annum, according to a CII reports.

Manwani cites inability of customers, who are availing basic grooming services for years to postpone treatment, as one of main reasons for growth of this business. “Hairstyling, hair-dyeing, manicure, pedicure and threading are the most sought after facilities,” according to Manwani.

The French grooming and beauty brand has also joined hands with Aditya Birla Retail to set up a departmental store format retail chain for men called ‘The Collective.’

It was only a month ago, when top honcho of one of the country’s biggest food & grocery chain, which operates around 670 supermarket and 2 hypermarket stores, had talked of expanding operations of its “More” retail chain by adding 200 supermarket and 12 hypermarket format stores. Its CEO Thomas Verghese had then said, “We have not scaled back our investment plans but our expansion could get delayed by a few months.”

It now transpires that on the back of heavy losses incurred on supermarket operations, the retailer according to an NDTV Profit report, has decided to rejig its supermarket expansion strategy. Until that happens, the retailer– a part of Kumarmangalam Birla-led A V Birla group– would put a halt to further opening of supermarkets stores.

In a related development, the retailer is also said to be searching for an alliance partner, who could help it put its supply chain in order. Currently, the retailer is managing logistics and supply chain back-end operations on its own.

The company is now looking for a partner who will help it handle its inventory such that there is optimum management of its stocks and goods, says the news channel.

According to sources, a weak inventory management has led to pilferage and losses that need to be arrested at its stores.

Interestingly, most retail chains owned by large corporates, which began their retail operations on promise of superior in-house back-end operations based on their knowledge and expertise of local conditions, have realised that managing logistics and sourcing is not as easy as they earlier thought it to be. Apart from infrastructure, it calls for years of experience and installation of robust systems. Mere capacity of being able to make huge investments is no guarantee of successfully running an  efficient and cost effective supply chain.

Interestingly, Tatas for their ‘Croma’ durables chain and Bhartis for their ‘Easyday’ food & grocery chain appointed or partnered with international players like Woolworths of Australia and Walmart of the US, who are known for their prowess in the field.

Even Reliance and Future groups are believed to be seeking suitable alliances in this area.

Aditya Birla Retail (ABRL), a Kumarmangalam Birla group company, which for some time was carrying out discussions with property owners of its stores, has been able to succeed in bringing down the same by 8 to 10 per cent on new properties.

“We have saved nearly 8-10 per cent on the total rent of several of our stores. Renegotiating rates on properties has become easier now given the prevailing environment in the real estate sector,” said Thomas Varghese, CEO, Aditya Birla Retail, to PTI.

Vishal Retail, another leading retailer, a few days ago had claimed reduction of 20-25 per cent rent for some of the store properties, which according to the company had resulted in a saving of around Rs 30 lakh per month.

In case of A B Birla Retail, while the owners of new properties have agreed to bring down their rents, the company has not found found the old property owners so enthusiastic in this regard.

“Three-four years ago, rentals were not that high and we rented lot of properties as the prices were attractive. However, renegotiating on those stores now has become difficult as their landlords are not agreeable to a reduction,” Varghese said.

ABRL currently operates about 670 supermarket stores and two hypermarket stores. The retailer is looking at adding 200 supermarket and 12 hypermarket stores by 2009-10. A large number of currently operating stores came as a part of acquisition deal in 2007 when ABRL took over the operations of the South-based Trinethra food & grocery retail chain.

The properties acquired by Trinethra despite slowdown and consequent reduction in rents, would still be at lower rates than the current rates.

“Private labels business now contributes around three per cent to our revenue. We plan to up it to 10-15 per cent in the next three years,” Aditya Birla Retail’s CEO, Thomas Varghese told PTI.

The retailer is considering to introduce new products under private labels in personal care products segment. The products to be introduced by March this year, will include hair oil, hair styling gel, shaving creams and gels and toothpaste, among others.

“The personal care products would be launched by March. This would be on a pilot basis and the products would initially be launched in Vishakapatnam. Depending on the market feedback we will then enter other markets,” Varghese added.

The company is already selling food products such as food products including ketchups, jams, honey, carbonated drinks, chips and cookies in private labels under the ‘Feasters’ brand.

The retailer is planning to add 250 supermarket stores by March 2010.

Aditya Birla Retail, which operates 670 supermarket and two hypermarket format food and grocery stores, across several states of the country, under the brand name of “More for you,” like most of its big ticket food and grocery counterparts, is looking at enriching its portfolio of private labels, in the coming months.

“We are focussing on private labels in a big way. We want to take the share of private labels to 30 to 40 per cent of our total business in the next 4-5 years,” said Thomas Varghese, the chief executive of Aditya Birla Retail.

The retail chain, as reported earlier, is expanding its retail network by setting up 12 more hypermaket and 200 more supermarket stores in the next financial year (2009-10).

To begin with, Aditya Birla Retail will be enhancing its existing portfolio of personal care products like shampoos and soaps under private label of ‘Enriche’ by adding new products like hair oil, hair styling gel, shaving creams, gels, and toothpaste, among others, says a BS report. These products are expected to be launched by March, this year.

Apart from personal care products under ‘Enriche’ brand, the company is also selling products in private labels in several other categories like processed foods (ketchups, jams, honey, carbonated drinks, chips, cookies, etc.) under ’Feasters’ brand; and washing products (detergents, dishwash bars, etc) under ‘110%’ brand. In fact, there are currently 320 products being sold by ’More for you’ retail chain under private labels.

ABRL is also looking at entering into the private labels business in consumer electronics and durables business after it has complted its proposed expansion in FY 2009-10.

The success or otherwise of private labels business depends largely on the chain’s pricing strategy and extent as well as reach of its retail network. In times of economic slowdown, it is easier to push private labels as consumers wanting to conserve resources are prepared to “downtrade.” Downtrading refers to a practice in which customers in order to save on money are prepared compromise either on the brand name, i e buy products of relatively unknown brands (in this case private label), or are ready to compromise on quality or quantity of features (specifications) in a product they are buying. For example, one may settle for a CRT TV instead of LCD TV or buy a 32″ TV instead of 37″ TV.