While, there was a rise of 31 per cent in consolidated net income (from Rs 58,405.4 million in 2007-08 to 76690.4 million in 2008-09), the growth in standalone net income was a bit lower at 25.60 per cent (from Rs 50,489.1 million in 2007-08 to Rs 63,417.0 million in 2008-09).

Thanks to efforts of the company to contain costs, standalone operating profit of the company went up by 140 basis points (1.4 per cent) as margins grew up from 9.1 per cent in the previous year to 10.5 per cent, during the reporting year (2008-09). This resulted in operating profit leap frogging 46 per cent (2008-09) over the previous year (2007-08). The impact of growin operating margin was greeted by stock exchanges as the company’s share price registered an increase of 2.69% on NSE (Rs 347.55) during the day.

Incidentally, Pantaloon Retail takes July-June period as its financial year, compared to most other Indian companies, who follow April-March period as their financial year.

The stark difference between consolidated and standalone numbers of a company for the same period arise because while the consolidate numbers incorporate pro-rata impact of performances of other group companies in which the reporting company has equity stake, standalone numbers relate specifically to individual performance of the reporting company. As such, standalone results of a company are more important than consolidated results for the purpose of analysing its performance during the reporting period.

Thus, the announced consolidated net sale/income of Rs 76.69 billion (7,669.04 crore) for the year 2008-09 include Rs 1.327 billion (132.7 crore) in net sales of other Kishore Biyani-led Future group companies in which Pantaloon Retail holds financial interst.

The consolidated net profit took a severe hit ) as there was a sharp rise of 87 per cent in interest charges and 70 per cent in depreciation charges during the year (2008-09) under reference. Employee cost also rose by 30 per cent during the year.

Net sales of the retailing company, which operates several multi-format retail chains across segments, for the year (2008-09) reached Rs 7,669 crore compared to Rs 5,841 crore of net sales during the previous year (2007-08).

Thanks, however, to steep increases of 30 per cent in employee cost, 75 per cent in depreciation and 87 per cent in interest charges, net profit of the company nose dived by 54 per cent during the year. According to numbers posted by the company, the net profit declined sharply from Rs 21.93 crore in the previous year (2007-08) to Rs 10.07 crore in this year (2008-09).

According to an earlier announcement, Pantaloon Retail is expecting to achieve a sales growth of 35 to 40 per cent during the current financial year (2009-10). The growth will be achieved through a combination of factors, major among which are, creation of new space, improvement in productivity, and efficient sourcing of products.

Spencer’s Retail, a retail arm of the diversified RPG (R P Goenka) group, is a wholly owned subsidiary of Kolkata-based CEC (Calcutta Electtric Supply Company).

Spencer’s Retail, according to a top company official, has witnessed a 15 to 16 per cent growth in revenues during the first quarter (ended June 30) of this financial year.

‘Sales per square feet are actually going up. We have seen a revenue growth of 15-16 percent in the 2009-10 first quarter as compared to the like period last year,’ said Sanjeev Goenka vice-chairman RPG Enterprises, while inaugurating a new format gourmet store in Kolkata.

According to Goenka, ‘The closing down part is now over.’

Spencer’s Retail is presently operating a retail network of 246 stores occupying a trading space of around 1 million sq ft. across the country. Spencer’s is planning to create an additional space of 225,000 sq ft during this fiscal.

The company has earmarked Rs 300 crore for investment to open 8 new large format stores this fiscal (up to 31st March, 2010).

“Unbridled expansion coupled with the economic recession created a mess resulting in this huge loss,” said Ambeek Khemka, Group President, Vishal Retail.

As such, apart from taking other measures to bring operations back on track, the retailer has decided to consolidate its operations by closing down up to 10 non-performing stores out of 170 stores being currently operated by the company. These stores are expected to be closed down in the coming months.

“We are looking to consolidate our business and close down unviable stores,” said Ambeek Khemka. “Now we are identifying unviable stores and within months we will close down up to 10 of them,” he added.

Vishal, which reported a net negative (loss) EPS (earning per share) of Rs 51.22 for Q4 (2008-09), compared to nett EPS of Rs 4.61 for Q4 (2007-08), was once during the year operating over 180 hypermarket (megastore) format stores and occupying nearly 3 million sq ft of space, across the country. 20 of the presently operated stores in the retail chain are franchisee managed.

Apart from closing down non-performing stores, the company has also taken measures to save money on payroll expenses. It has already reduced manpower strength from 14,500 employees during the peak boom time to around 8,800 employees at present.

Vishal Retail, according to Khemka, is also busy restructuring its ballooning debt of Rs 740 crore.

“We are talking with our lenders to reschedule our debts, which are worth around Rs 740 crore,” added Khemka.

The debt for the Vishal Retail during the year has increased by nearly 40 per cent, which has resulted in the company becoming one of the most leveraged companies in retail business.

The company, which was operating through a network of Distribution Centres (cental godowns) across the country, has also closed down all of them except the one being operated from Gurgaon near Delhi in Haryana.

“We have already centralised our warehousing operations,” said Khemka.

Vishal Retail also took several initiatives like reducing real estate expenses by renegotiating lease rents with property owners, renting out space for shop-in-shop counters to local/regional brands, and creating display space for national brands, for improving its cash flows during the year.

The retailer, according to financial results, has incurred a consolidated net loss of Rs 94.49 crore for the 2008-09 financial year ending 31st March, 2009. The loss is significant in the backdrop of net profit of Rs 40.64 crore during the financial 2007-08. Against income of Rs Rs 952.97 crore in 2007-08, the income in 2008-09 at Rs 1323.23 crore was higher by 38.85 per cent.

The last quarter (Q4) performance (2008-09) was quite bad for the company as it incurred a net loss of Rs 114.72 crore between January- March 2008, compared to standalone net profit of Rs 10.40 crore in the same quarter last year (2007-08).

Standalone total income during Q4 2009 was lower at Rs 232.89 crore compared total income of Rs 318.41 crore during Q4 2008.

Post economic slowdown, Vishal has been facing pressure of falling footfalls (same store), declining average purchase per customer, and mounting interest cost, particularly during later part of the financial year under review.

The retailer was busy restructuring debt of around Rs 730 crore during June, 2009. The retailer was interestingly carrying a debt of Rs 532 crore in 2008.

Vishal Retail, which was a darling of equity investors only a year or so ago, in the last one year saw its share price plummeting from a high of Rs 455 to Rs 25.20. The price, though has now recovered to Rs 59.40 on stock exchanges yesterday.

While, value (62 per cent) and lifestyle (23 per cent) segments account for nearly 85 per cent of overall sales, home retail segment contributes the balance of 15 per cent sales for the company.

According to latest sales figures released by the retailer for June, 2009 (last month of fiscal 2008-09), while the monthly same-store-sales (sss) for value (Big Bazaar, Food Bazaar, KB’s Fair Price, etc) and lifestyle (Pantaloons, Central, etc) segments increased by 8.07 per cent and 8.19 per cent respectively, the home retail segment (Home Town, e-Zone, etc) monthly sales declined by a whopping 34.36 per cent, over the same monthly period of the previous year.

While, the overall annual sss for value and lifestyle segments for the 12 months of 2008-09 show increases over the same period last year of 7.37 per cent and 5.98 per cent respectively, the decline in home retail segment sales for the same period was 10.99 per cent.

While the official announcement of annual numbers is expected in due course, the company based on preliminary figures has ended the financial year with nett sales of Rs 7,179 crore for 2008-09 (July 2008- June 2009)compared to the previous year nett sales of Rs 5,547 crore (July 2007- June 2008).

This is a commendable performance as despite the challenges of global economic slowdown, the retailer has been able clock an overall growth of 29.43 per cent in annual sales, over the previous year.

This has also resulted in investor community’s confidence returning back on the company’s future. The current price of Pantaloon’s equity on the BSE at Rs 277/share is 156 per cent higher than its yearly lowest price of Rs 105.70 in March, 2009.

The company, which markets its products, among others, under Koutons, Charlie Outlaw, Les Femme, Koutons Junior, K2ONE, FeeMe brands is looking at increasing the number of its stores from over 1,420 to 2,000, by the end of this financial year (31st March, 2010).

The company, which unlike many of its counterparts, operates with comfortable leverage is looking at expanding the network through additional debt. Since, Koutons prefers franchise model for expansion, it does not require much capital to expand its network. As such, it will raise capital through equity dilution only when it becomes necessary to do so.

Koutons is also trying to restrict expansion of its outlets as it wants to focus on converting existing stores into ‘family’ stores where all product categories (apparel, accessories, and footwear) are available under one roof. It will, therefore, consider increasing the size of some of its stores than to open new stores.

Koutons has also put its overseas expansion plans on hold until it is able to consolidate its position in the local market.

Koutons has in the past won several awards, including “Best Retailer Leadership Award 2008,” “Most Admired Fashion group,” “Value Retailer of the Year,” “Chain Store of the Year,” among others, while its Chairman DPS Kohli has won the “Most Admired Fashion Face of the year,” and “Brand Entrepreneur of the Year” awards.

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.

Pantaloon Retail India Ltd, India’s largest multi-product, multi-segment,  multi-format retailer, which has been re-christened as Future Market & Consumer Group Ltd, appears to have firmly reversed the trend of same-store declining sales.

The trend has now become visible in the past few months both in ‘value’ and ‘lifestyle’ segments. However, home retail segment comprising home improvement products like furniture and furnishings as well as consumer durable products continue to defy the reversal for six months straight as the same store sales for this segment are still displaying negative sales growth.

In the month of April, 2009, Pantaloon launched its latest “Fashion@Big Bazaar Summer Collection.’ The new collection was launched showcasing gorgeous film actress Asin, who is now partenering with the legendary cricketer M S Dhoni, to promote the company’s ‘value’ fashion line (price range of Rs 99 to Rs 999) under the tagline of ‘Des Badla. Bhes Badlo.’ During the month, Big Bazaar also launched another ad-campaign called ‘Kum Daam Har Qeemat Par’ that tries to explain the rational of how the retailer is able to fulfill the promise of delivering best quality at best price to its customers.

In a sure sign of revival of consumer interest, while, the same stores sale in April, 2009, for Value and lifestyle segments grew by 7 per cent and 6 per cent respectively, they declined by 28 per cent in the home retail segment indicating that consumers are still avoiding to spend money on soft and hard furnishings as well as durables. In this segment, Home Town and e-zone are two large retail format chains that, among others, are being operated by Pantaloon across India.

Total revenues in April, 2009, both for same stores as well as new stores, at Rs 560.89 crore displayed a healthy growth of 21.4 per cent over Rs 462.02 crore worth of merchandise sold during the same month (April, 2008) last year.

The growth was driven by YOY increases of 23.44 per cent in ‘value’ retail, 18.10 per cent in ‘lifestyle’ retail, and 10.61 per cent registered in ‘home’ retail segments during the month. However, overall growth in revenues for the first 10 months period of this fiscal (July 2008- April 2009) was even better at 32.28 per cent, over the same period in the previous year. Pantaloon registered overall sales revenue of Rs 5,924.42 crore in the first 10 months compared to Rs 4,478.78 crore during the same period in the previous year.

Pantaloon is also active in launching new stores. While, on the 1st May 2009, it opened several new stores including the 2nd ‘ethnicity’ lifestyle store at Ghatkopar in Mumbai as well as 154th Food Bazaar store and 113th Big Bazaar store in Satara in Maharashtra, it also earler launched its 36th eZone store at K-Star Mall in Chembur Mumbai on 17th April, 2009.

Pantaloon Retail is planning to also add 17 new stores across formats during the months of May and June, 2009. These stores will comprise, one flagship store of Pantaloons, 5 stores of Big Bazaar, 7 stores of Food Bazaar, and 2 stores each of eZone and HomeTown brands.

Pantaloon Retail, the largest listed retailer of the country, despite a healthy 21.24 per cent growth in sales (Rs 1354.34 crore) during the quarter ended 31st March, 2009, has posted less than expected rise in the nett profit for the third quarter (Pantaloon unlike most others closes its year on 30th June). The company was, however, able to increase its operating profit margin by 208 basis points to 10.63 per cent during the quarter as compared to 8.55 per cent during the third quarter of the previous year.

The net profit for the quarter at Rs 34.37 crore was a mere 7.07 per cent higher than the nett profit of Rs 32.10 Cr, earned during the same period last year. Financial analysts were expecting a growth of around 30 per cent for the quarter under consideration.

The lower than expected growth in the nett profit was mainly on account of the steep rise in interest costs during the quarter. The payout on interest increased by a whopping 98 percent from Rs 42.87 crore in the same period of the last year to Rs 84.73 crore this year. The company, as a part of its ongoing economy drive, was able to bring down inventory costs by 47.40 per cent and employee costs by 4.1 per cent, during the period. Provisioning for depreciation, though, increased by 16 per cent.

With the expected infusion of fresh capital from promoters to the tune of Rs 368 crore against the proposed issue of rights shares and warrants, as well as around Rs 1,250 crore through issue of equity shares in the subsidiary companies to private equity (PE) investors, the country’s largest multi-product, multi-format, retailer, which operates over 1,000 stores across more than 60 cities, would over the time be able to bring down the financial costs. This will also result in lowering down of the leverage (debt/equity ratio) of the company currently hovering at 1.19.

In a decision taken at the meeting called to consider quarterly results, the company’s Board of Directors has also approved the transfer of fashion division of the company to Future Merchandising Ltd and retail division of the company to Future Consumer Enterprises, wholly-owned subsidiaries of the company.

Pantaloon Retail India Ltd, the largest multi-product, multi-format listed retailer of the country, will be holding a meeting of the Board of Directors of the Company on April 25, 2009, to consider and take on record the unaudited financial results for the Third quarter ended March 31, 2009 (Q3). Pantaloon Retail, which is soon to be rechristened as Future FMCG Limited, follows a different financial year than most other companies in India. Its financial year begins from 1st July of a calendar year and ends on 30th June of of the next calendar year.

Another large ‘value’ retailer Vishal Retail has decided to publish its audited financial results for the financial year ending 31st March, 2009 (2008-09) on or before 30th June, 2009. The retailer is facing the situation of a severe cash crunch on account of falling footfalls and declining customer conversion as a consequence of global economic slowdown. The company has already frozen all expansion and is approaching its lenders to rollover loans falling due in short term as well as to provide relief on interest rates. The highly leveraged company is looking at the interest liability of a staggering amount Rs 100 crore during the financial year.

After disastrous decline in ’same-store-sales’ across all segments (value, lifestyle, home retail) during December, 2008, Kishore Biyani-led Future group’s consumer retail arm Pantaloon Retail– soon to be rechristened as Future FMCG Limited– has begun to display signs of revival.

While, the same store sales decline in December 2008 was at 3.56 per cent for ‘value’ segment, 13.97 per cent for ‘lifestyle’ segment, and 10.00 per cent for ‘home retail’ (including durables) segment,  In March, 2009, the situation in the last month appears to have changed for the better. Barring ‘home retail’ segment, which continues to remain a cause for concern (-10.29 per cent), the situation is much better as far as value (+5.32 per cent) and lifestyle (+4.28 per cent) are concerned.

What is more exciting, however, is the overall growth in sales as of 31st March, 2009. Pantaloon is back to ‘growing’ at 30-35 per cent range. While, overall Sales across all segments for all new and old stores for  the month of March grew at 32.40 per cent (from Rs 419.73 crore in March 2008 to Rs 555.74 crore in March, 2009), the cumulative sales for 9 months ending 31st March, 2009 at Rs 5,363.52 crore against Rs 4.016.76 crore were 33.53 per cent higher than in the corresponding period last year.

“India’s consumption story is intact,” said Kishore Biyani, Chairman of the group, while commenting on the group’s consumer retail performance. According to him, slowdown or no slowdown, consumers can not stop buying basic necessities of food and other items of consumption. Although, much of the growth during the 9 months of current fiscal can be attributed to opening of new stores, Kishore Biyani says, “The worst should be behind us.”

On March 27, 2009, Pantaloon opened three stores of different retail formats on a single day. The doors of Big Bazaar & Food Bazaar, Pantaloons, and Celio stores were opened to customers on this day in the R City Mall located at Ghatkopar (West) in Mumbai. The same location will also see the opening of ‘Ethnicity,’ ‘Staples,’ and ’Planet Sports’ soon.

Pantaloon Retail now boasts of 112 Big Bazaar and 153 Food Bazaar stores in the ‘value’ segments, while Pantaloons has 44 stores in the ‘lifestyle’ segment.

The aggregate sales of Rs 535.40 crore during February, 2009 was 31.25 per cent higher than the sales of Rs 407.93 crore  achieved during February, 2008.

Among individual segments, sales during February, 2009 compared to same month in the previous year, at Rs 299.53 cr were 30.09 per cent higher in the value segment, at Rs 171.43 cr were 20.92 per cent higher in the lifestyle segment, and at Rs 87.87 crore were 26.14 per cent higher in the home retailing segment.

Even, on a cumulative basis, sales (net of inter company transfers) for the first 8 months of fiscal 2009 (during July 2008-February 2009) at Rs 4,807.78 crore were 33.66 per cent higher than the sales of Rs 3,597.04 crore recorded during corresponding period of 8 months in the previous year.

However, if same store sales (SSS) — a true barometer of health of retail business– is taken as reference, while value and lifestyle segments have recovered the ground in February 2009 (as against all-round dismal performance of December, 2008) by recording respective growth of 5.32 per cent and 4.44 per cent, the home retail segment is yet to recover as it continued to show a decline (10.17 per cent) over the month of February, 2008. Even on a cumulative basis, this segment is still 0.15 per cent lower than the previous year.

Future group, a multi format, multi product retailer, operates several retail chains in different retail segments, including, Big Bazaar and Food Bazaar in the value segment, Pantaloons, Central, and Ethnicity in the lifestyle segment, and Home Town, e-zone, Furniture Bazaar in the home retail segment.

Delhi-based value retailer Vishal Retail, which recently successfully renegotiated rentals, to the extent of 20-25 percent, for about five lakh sq ft (or, over 15 per cent) of the space occupied by the chain, has landed in a tight financial spot following default in repayment of an outstanding loan on due date.

The highly leveraged retailer, among the fastest growing in the past two years, according to an NDTV Profit report has defaulted on repayment of its obligations against a Rs 50 crore loan extended to the company by Deutsche Bank.

The default, reflecting a serious breach of commitments to its lenders, comes in the wake of falling footfalls and declining ’same store sales’ (SSS), in the current financial year.

The heavily debt ridden (around Rs 750 crore) company with debt/equity ratio of around 3:1, according to media reports, though denied by the company, has for some time been facing break-down in the supply of fast moving consumer goods to some of its 183 stores by leading FMCG brands. Currently, Vishal is operating a total of 183 stores in 24 states across 110 cities of India, occupying a total space of 2.99 million sq ft.

Despite achieving a respectable y-o-y sales growth of 58 per cent in the first thre quarters of the current fiscal (1,090 crore vs 687 crore), most of which is attributed to sales from opening of new stores during the current year. The company has already pared its annual sales target from Rs 1,800 crore to Rs 1,500 crore this fiscal, however, it may fall short of achieving even that in the light of prevailing market conditions.

As a consequence of increasing inventories and declining (less than targeted) sales, the retailer quite some time is going through the spectacle of increasing inventory and interest costs.

Vishal, once the darling of bourses, has seen its shares plummeting from a peak of Rs 1,001 per share in January, 2008, to the rock bottom price of around Rs 38 per share in the past few months, though it must be said that most retailing companies have lost the sheen they once enjoyed in the capital markets.

The earlier reports of talks of Reliance Retail with Vishal Retail to acquire a part of the beleaguered retailer’s equity appear to have come to a halt.

Vishal Retail has also initiated a study to find viability of its stores. Apart from relocating a few of the under-performing stores, the company is believed to be considering closure of 12 stores, though media reports about a month ago suggested closure of as many as one third of its currently operating stores. The company had earlier confirmed closure of a couple of stores it was operating in Jodhpur and Mumbai.

When almost every retailer, be it in the value, lifestyle, or luxury segment, is reeling under pressure of global financial meltdown, there is one product, or a category of products, that is bucking the trend.

It is none other, but the luxury cars segment!

Mercedes Benz, among the well known luxury cars in the world, which sold 3,625 cars in India in 2008 has recorded a growth of over 45 per cent over the previous year of 2007.

Punjab market, comprising Punjab, Chandigarh, and some parts of neighbouring Haryana, according to a BS report, which sold 275 cars against 175 in the previous year (2007), grew even higher at 48 per cent. In fact, Northern region that among others includes Delhi is ahead of other regions with 38 per cent of total sales.

“Punjab is a very important market for us and we are aggressively looking at the region with new product line. Specially Ludhiana has responded well to the Mercedes sales,” said Suhas Kadlaskar, Director of Corporate Affairs, Mercedes-Benz India.

Kadlaskar, though is not so bullish about sales prospects of the iconic brand for 2009 in India, particularly the first half of 2009.

In a related development another luxury car maker Rolls Royce previewed its Phantom Coupe model (priced for Rs 4 crore in India). Even this model, which sold 1,212 cars in 2008 against 1,010 cars in 2007, has recorded a growth of 20 per cent in sales globally.