chillibreeze writer — The Chillibreeze Business Research Team
The retail industry could see a sea change with the Government of India considering Foreign Direct Investment. With this in view, Chillibreeze plans to bring you periodical updates on the retail scene in India.
The Chillibreeze Business Research Team has writers with interest and experience in the Retail industry, will be populating this page with the updates.
Updates on the Latest Happenings in the Indian
Retail Sector
Weekly Retail News
1. Government likely to ease FDI regulations in real estate
The Indian government is likely to offer FDI sops in real estate in an effort to bring in high profile single brand retailers such as Banana Republic, Carrera, Valentino, Lalique, Barrats and Damas, who will be able to own their own properties instead of leasing or renting them.
According to an official in the commerce and industry ministry, “Organized retail is one of the priorities. Talks are on with the urban development ministry and a proposal for removing the minimum land area requirement for FDI is being considered.”
International retail firms are hesitant to take up a leasing option due to the complicated model of revenue percentage that most malls follow. A mall in Gurgaon, started at 4%, then increased to 5% and is currently at 6%, a system that foreign companies are not keen on getting entangled with.
Monday, September 04, 2006
Source: The Economic Times
2. Organized retailers following kirana strategies
Several organized retailers have started using the kirana store strategy to achieve greater sales by focusing on the local area for customers. Food retailers such as Trumart, Spencers Daily, Spinach, Vishal, D Mart are positioning themselves as upscale versions of local kirana stores but with modern supply chain efficiencies, and are taking orders on the phone for home deliveries.
Interestingly, most of these stores had earlier selected non-residential locations such as malls, but suffered due to low conversion rates. It was found that while most consumers willingly travel greater distances to malls to make furniture, apparel, toys or home furnishings purchases, for food and grocery items customers preferred neighborhood stores.
Monday, September 04, 2006
Source: The Economic Times
3. Landmark signs licensing deal with Springfield
The Landmark Group announced that its lifestyle apparel business LMG Brands has signed a licensing deal with Spanish menswear brand Springfield, a part of the Cortelfiel Group. According to Fasle Naqvi, President of LMG Brands, “Springfield is a big brand for young urban man seeking fashion at competitive price in Europe.” Other brands managed my LMG Brands are Bossini and Kappa, both of which were launched earlier in 2006.
The Cortelfiel Group has over 450 stores across the world and owns another brand called Women’s Secret that specializes in women’s lingerie and homewear. Another Spanish retailer that is looking to invest in India is Zara.
Monday, September 04, 2006
Source: The Economic Times
4. Anil Ambani also has retail plans
The Anil Dhirubhai Ambani Group (ADAG) is working on a pan-India retail plan. At present the company has a network of 241 Reliance WebWorld outlets in 105 cities that offer broadband surfing, video games, e-ticketing, web shopping and also have a gourmet café called Java Green.
The company invested in two retail companies last year, Gini & Jony and Vishal Retail. ADAG has also shown interest in investing in a chain of pharmacies as well as the consumer durables sector.
Monday, September 04, 2006
Source: Business Standard
5. Vanity Fair and Arvind Brands tie up, open to buying Indian brands
Vanity Fair Corporation, the world’s largest branded apparel manufacturer, and Arvind Brands have formed a joint venture to create VF Arvind Brands, a new company that is open to acquisition of Indian brands. Although the VF Corporation has grown due to several acquisitions, this is the company’s first joint venture.
Eric Wiseman, President and CEO of VF Corporation, described India as the perfect market for the company and is the fastest growing market for the VF Corporation along with China. At present, the company does not plan to start manufacturing through this new joint venture and its new JV partner, Arvind Brands has transferred all its business to the new venture, except for its manufacturing facility. Arvind has a wide range of brands including Lee, Wrangler, Jansport, Kipling, Arrow, Gant, Excalibur and Ruf & Tuf.
Tuesday, September 05, 2006
Source: The Hindu Business Line
6. Godrej Lifespace stores not to be a threat to distributors
With the constant and steady increase in the demand for lifestyle products, Godrej Lifespace stores will not take away any business from its network of retail distributors. There are 42 Lifespace stores in India and 6 more will open by year end. The company expects a turnover of Rs. 19 billion from its furniture and interiors through distributors, while sales from Lifespace stores is expected to be Rs. 1 billion.
Tuesday, September 05, 2006
Source: The Hindu Business Line
7. Subhiksha’s Mumbai plan
Chennai based discount retailer Subhiksha is soon launching its stores in Mumbai and Pune. According to industry sources, approximately 70 store locations have been fixed in the Mumbai, Thane and Navi Mumbai region. Most locations are 2,000-2,500 sq ft in space and are located in and around highly populated residential areas. Subhiksha is working on a model that will allow it to cater to the home-delivery segment too.
Tuesday, September 05, 2006
Source: Daily News & Analysis
8. FDI hassles derail South African company’s deal
The Foreign Investment Promotion Board (FIPB) has turned down AMC Cookware, a South African company, for its proposal to sell branded cookware through its 100% owned subsidiary. According to the board, “Since the applicant is for a 100% subsidiary, it is not eligible to enter retail trading as per Press Note 3 of 2006.” AMC Cookware planned to sell its products through a network of agents who would identify customers and earn commission for their sales.
Wednesday, September 06, 2006
Source: The Economic Times
9. Woodland expands to the north
Aeroclub, parent company of the Woodland brand, announced its decision to open 10 Woodland stores in the north by March 2007. The company has also launched denim trousers and plans to grow at 40% to reach its target of Rs. 3.5 billion by 2009. The company plans to focus on apparel to fuel this growth and 5 new factories have been set up in Baddi, Paonta Sahib and Dehradun.
Wednesday, September 06, 2006
Source: Business Standard
10. S Kumar’s bring in Stephen Brothers
S Kumar’s subsidiary, Brandhouse Retails Ltd will be bringing in UK company Stephens Brothers to India. According to an official at Brandhouse Retails, “The brands to be launched will be a mixture of our own brands as well international brands. Out of the 20 brands, three brands will be launched during second quarter of 2006-07, while 6 brands will be launched by fourth quarter.”
Wednesday, September 06, 2006
Source: Daily News & Analysis
11. Bharti to soon select foreign retail partner
Bharti Enterprises is said to be close to finalizing an international partner for its retail venture. According to Sunil Mittal, the company will be deciding on a partner by the end of September and operations for the new venture will begin in April 2007.
Wednesday, September 06, 2006
Source: Reuters
12. US chain Sbarro to open restaurants in India
US based Italian restaurant chain Sbarro announced its decision to open 100 eateries in India, making it the company’s largest international expansion. Sbarro will be partnering with RTC, an Indian company to open the restaurants in New Delhi in 2007 and then 10 new restaurants every year for the next ten years. Most restaurants will be in malls in the major metros.
Sbarro will be the first restaurant in India to sell pizza by the slice and will also have a full Italian menu on offer besides pizza. The company will also be creating a new vegetarian menu to cater to vegetarian customers that make up a large part of the population. At present, Sbarro which was formed more than 50 years ago has nearly 1,000 restaurants in 30 countries.
Wednesday, September 06, 2006
Source: Newsday
13. Hasbro Clothing keen on a nation-wide presence
Hasbro Clothing Pvt. Ltd is keen to make its menswear brands, Genesis and Basics available across the country. The company recently opened a store in Ahemadabad and is looking to expand to the north and the east. The company is planning to tie up with Shweta Trading, a Kolkata based company to take care of its West Bengal, Bihar, Jharkand, Assam and the other north-eastern states.
The company plans to open 19 additional stores by March 2007. At present the company earns 60% of its revenue from multi brand outlets (MBOs) and 40% from its exclusive outlets and Hasbro is trying to reverse this trend.
Thursday, September 07, 2006
Source: The Hindu Business Line
14. Good web sites increase sales
Well known author and speaker, Robert Spector, emphasized the direct correlation between a good website and higher sales. Highlighting the trends in the industry, he said that, "A new trend in the US is to `order online and pick up at the store'." Another new area was ‘Live Chat’, where a store salesperson chats with online customers as they enter the site.
He advised Indian retailers, especially those of larger format niche stores to really go all out to make the customer happy and build loyalty. He added, "Gaining a customer is not comparable to the money you spend on him."
Thursday, September 07, 2006
Source: The Hindu Business Line
15. Royal Classic considering 2 major acquisitions
The Royal Classic Group, a Rs. 2.25 billion textile and apparel company, is considering acquiring 2 major brands by April 2007, in an effort to double the company’s turnover to Rs. 5 billion before 2008, when they plan to enter the capital markets.
R Sivaram, Executive Director of The Royal Classic Group confirmed that the company was in talks with two firms both of which are family owned and although have performed well, have not grown beyond Rs. 200 million. The Royal Classic Group supplies garments to companies such as Gap, Fila, Kitaro, Kohl’s and Daniel Hechter in Europe and US.
Thursday, September 07, 2006
Source: Business Standard
16. Gitanjali Gems acquires US chain
Gitanjali Gems announced that it will be purchasing a US jewelry chain with 100 stores for $40 million. The company is at present in advance stages of negotiations with the company, which is one of the top 10 jewelry firms in the US and has an estimated turnover of $100 million.
Gitanjali Gems has made a significant dent in the Indian jewelry market with its brands, Asmi, Gili, Ginatti, D’damas and Nakshatra and plans to grow its chain from its current 620 outlets to 900 outlets.
Thursday, September 07, 2006
Source: The Economic Times
17. Oyzterbay plans to form a JV with German company
Jewelry company Oyzterbay plans to enter into a joint venture with a German company to retail its products at its 56 Oyzterbay stores across the country. The company’s has 30 company owned standalone stores that will undergo a name change and will soon be called Labh Jewelers. Oyzterbay was recently purchased by Rajesh Exports.
Thursday, September 07, 2006
Source: The Hindu Business Line
18. Wal-Mart reconfiguring strategy
Wal-Mart is changing its one-size fits all model of retailing in an effort to boost sales that have been slowing down. The retailer will now custom fit stores with merchandise that will appeal to local customers based on demographics. I has divided its customers into 6 demographic groups: African-Americans; the affluent; empty-nesters; Hispanics, suburbanites; and rural residents.
Friday, September 08, 2006
Source: The Economic Times
19. Godrej & Boyce launches a unified furniture brand
Godrej & Boyce Manufacturing launched its new brand of furniture called Godrej Interio, which will combine the company’s home and office furniture as well as its special project lines under one unified brand. According to Jamshyd Godrej, Chairman and Managing Director, “Godrej Interio is an amalgamation with a contemporary outlook towards business.” The company will be expanding to include products such as stadium seating and hospital and healthcare furniture by 2007 end.
Friday, September 08, 2006
Source: Business Standard
20. Costa Coffee breaks even
UK company Costa Coffee opened its first outlet in India in September 2005 in Delhi and has already broken even in one year of operations in the country. Costa Coffee is managed my Devyani International, the master franchisee for the company in India. Arjun Verma, Director and CFO of Devyani International, said that the company, “…reached cash break-even in July. In another 3-4 months, we will cover depreciation too and start making net profits.”
Friday, September 08, 2006
Source: The Economic Times
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