Just heard - Bharti Wal-mart cash & carry debut in India is scheduled for 29th June 2009.

Another one for Pantaloon India (Kishor Biyani's Future Group's flagship company) - 20% stake in menwear brand Turtle. Future Group is expected to announce taking 20% stake in menswear brand Turtle.

Turtle currently has 32 exclusive stores, 60 shop in shops (Central, Globus, and lifestyle stores like Shoppers Stop, Pantaloon and Lifestyle.)and more than 1,200 MBO's. The company plans to add 12 exclusive stores and 28 MBO's this fiscal. 80% revenue is generated through the MBO's and rest by the exclusive outlets and SIS's.

Bharti Wal-mart's cash & carry format's opening scheduled for later this week has been postponed. Post fighting between two Sikh groups in Vienna, Austria, riots broke out in Punjab. Bharti Wal-mart combine decided against opening the store amidst so much on tension in the state. Wal-mart faced a lot of opposition earlier and seems to be taking no chances and is maintaining a very low profile.

Just heard, future group and Carrefour are back in talks for a tie-up. It seems Carrefour officials had a meeting with the top team at Pantaloon Retail India Ltd (future group's flagship company). Carrefour has been looking to enter the Indian Retail space for more than 2 years now, however with little success as no one seems to be buying their value proposition!

Eveready Industries is the third largest player in CFL's (Compact Fluorescent Lamps) after Philips and Wipro in the organized retail segment with a 4% market share. 200 million units of CFL sold in India, out of which 50 lakh units were sold by Eveready. The company aims at using its distribution network with 8.1 lakh outlets to strengthen its position in the CFL segment. They aim to reach even small towns with a ~20,000 population.

Compact Fluorescent Lamps reduce electricity consumption by 75% and are known to last 10 times longer than normal Fluorescent bulbs.

Part of the US $ 29 bn., Aditya Birla Group, ABRL is looking to raise funds for expansion. It is reported to be in talks with PE players such as Warburg Pincus, KKR and Goldman Sachs. Chairman of the group Mr Kumar Mangalam Birla said the group was open to the idea of partnering with financial investors, however was not looking at partnership with foreign retailers. It has been reported that the group turned down players as Wal-mart, Carrefour and Tesco in the past. ABRL operates 660 supermarkets and 2 Hypermarkets. It has reported plans to scale up the supermarkets to 2200 by year 2015. Further it plans to open 6-10 hypermarkets in this financial year. ABRL has reported a net loss of Rs 534 cr on a sales turnover of Rs. 1,030 cr in 2008-09. Watch this space for more…

Named Best Price Modern Wholesale, Bharti Wal-mart, after going thru its share of start-up problems, is scheduled to open its first cash & carry store in India. The JV had earlier announced to open 10-15 cash & carry stores with sizes ranging between 50,000 to 100,000 sq.ft, by the year 2015. The first store will open in Amritsar next week. The store will sell to traders, shop keepers, businesses and HoReCa customers. It will not cater directly to customers.

Metro cash & carry is already present in India with a similar business proposition.

Tata Steel on Sunday said it has taken major retail initiatives, including doubling its outlets to 1,000 in the next 2-3 years for its branded products, to promote sale of its steel products in the country.

The second step would be to increase the number of steel junction outlets in the eastern region through franchises to sell all kinds of steel items like furniture, jewellery, cutlery and home building items and branded products of the company, a Tata Steel official said.

The Jamshedpur-based steel major started its retail initiative in 1999 to reach out to the buyers. It has around 10,000 distributor-owned exclusive shops, including 3,000 in rural India, to sell its branded products.

Read More

Wal-Mart, the world's largest retailer, has stepped up hiring of retail executives as it prepares to launch its cash & carry operations in India over the next three to four weeks.

Bharti-Walmart Private, the joint venture formed for the cash & carry operations, has recently hired 150 retail executives as it plans to open its first store in Amritsar.

"We have hired over 150 people to work at our Best Price Modern Wholesale store. We will continue to create jobs and employment as our operations grow," said Arti Singh, Wal-Mart's spokesperson. "Around 100 people came on board during the last four months," said an official close to Wal-Mart, who did not want to be named. Faced with declining footfalls and sales, Indian retail majors have been cutting down on employees, especially those who manage the outlets.

Wal-Mart has hired executives to manage stores after putting in place the top management team. The Bentonville-based giant has already roped in Craig Wimsatt, who had been with the retail giant's global operations, to head the cash & carry operations.

While Wimsatt is the chief operating officer, Arvind Mediratta is the head of business. "It has been internally communicated that the launch will happen by month-end. We are now putting the merchandise in place," said the official close to developments at Wal-Mart.

Bharti-Walmart had announced that its self-service wholesale stores would be called "Best Price Modern Wholesale." They will sell food and non-food products mainly to institutional clients such as hotels and restaurants.

Wal-Mart has also trained 600 people at its training center — Bharti Wal-Mart training center — in Punjab. At a later date, some of them could be deployed in stores.

"The Bharti Wal-Mart Training Centre in Amritsar has had over 1,500 walk–in candidates, and more than 900 have enrolled so far. Of these more than 60 have been employed for our Best Price Modern Wholesale store," said Singh.

With the Left off its back, the devil will no longer be in the retail. A new UPA government may open the gates for foreign

direct investments (FDI) in the retail sector in its second term, a boon for the cash-strapped sector desperately looking for fresh funding and partnerships with foreign retailers.

Prime Minister Manmohan Singh, who is keen on opening up the sector, may make an announcement in the first few months of his new tenure and has been reported by the foreign media as indicating this.

"The signal (from the government) on FDI is clear. It (the policy) will bring in much-needed competency and encourage big developments in various retail segments," says Kishore Biyani, CEO of India's largest retailer Future group that runs Big Bazaar, Pantaloon, Hometown superstores.

Despite opposition from the Left, the government had in 2006 allowed 51% FDI in single-brand retail. Now, it is almost ready with its policy on allowing 100% FDI in single-brand and partial FDI in multi-brand retail, according to government officials familiar with the development.

Intense lobbying by the industry, including some big names in the domestic retail sector, made the UPA government, in the last year of its term, change the norms for computing foreign investment.

Read more

Well...following up to my earlier post, just read an interesting article in business line (link) which basically discusses and makes a case for opening up the FDI. Excerpts are

"Only a small proportion of general trade, which is in close proximity to modern trade, would be partially affected by FDI in retail. It is not a zero-sum game. Our belief is that the share of organized retail will go down but the volumes certainly will not be impacted by opening up of the retail sector,"

I believe it is time to open up.

Almost all news channels are showing flashes saying "Organized retail to benefit" etc.

We all know organized retail has the biggest potential as Indian retail is only about 6% organized at this time. The UPA government now needs to start thinking and formulating strategies for the following -

We are in a slump now, but will start seeing positive changes soon.

Bhuvanesh Khanna, the India Durables Business Head at Reliance Retail corporate office in Mumbai for their Reliance Digital business, is moving on. He is now headed back to Delhi after three years at Reliance. His impending move has been doing the rounds.

A veteran of the durables, media and retail industry, prior to Reliance, Khanna had done stints in India and the overseas at Hindustan Times, Whirlpool, Sanyo, Casio and Usha.

A Vice-President, Sales, with Hindustan Times at their corporate office in Delhi, Khanna was also the Project Manager for their Mumbai launch and was part of the core team that drove strategy.

After a long stint overseas, Khanna returned to India in 1995 and joined Whirlpool in India, where he spent over eight years. He was Director - Sales and was part of the original core team that took over Kelvinator and launched Whirlpool in India.

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Pantaloon Retail, a part of the Future Group, operates retail chains including –

Pantaloon, a chain of Fashion outlets

Big Bazaar, a hypermarket chain

Food Bazaar, a supermarket chain

Central, a chain of malls

Its business lines also include

Depot

Shoe Factory

Brand Factory

Blue Sky

Fashion Station

aLL

Top 10

mBazaar and “

Star and Sitara”.

The company operates an online portal named futurebazaar.com.

The company is headquartered in Mumbai, India and employs about 25,000 people. The company recorded revenues of INR 34,685.6 million (approximately US$ 787 million) in the financial year (FY) ended June 2007, an increase of 79.4% over 2006. The operating profit of the company was INR 1,798.9 million (approximately US$ 41 million) in FY2007, an increase of 49.6% over 2006. The net profit was INR 355.4 million (approximately US$ 8 million) in FY2007, a decrease of 33.8% over 2006.

Source: companiesandmarkets

Tags: Pantaloon, Fashion, Bazaar, Food, supermarket, Central, Depot, Shoe, Factory, Brand, Blue, Station, Star, Sitara, portal, Mumbai, India, June, outlets, million

Canon India on Thursday said it would invest Rs. 100 crore towards enhancing its rental business and sales infrastructure to support its business-to-business (B2B) initiatives. The company also launched eight models of business imaging products.

"The strategy is to combat the current economic downturn as well as create a growth driver for its business imaging solutions division," Canon India President and CEO Kensaku Konishi said addressing a press conference here.

Mr. Konishi said the company had developed that competitive leasing plan to assist the corporates across categories to adopt the latest technologies in document management without having to invest upfront.

Stating that Canon India aims a 25 per cent growth rate in sales to clock a turnover of Rs. 1,000 crore by next year, Mr. Konishi said the business imaging division was expected to contribute 10 per cent of total sales in the next two-three years.

According to Canon India Senior Vice-President Alok Bharadwaj, "The rental proposition is a strong and compelling anchor as it offers scalability in line with growing demands. We believe that the document printing cost should be managed using specialised solutions than to cut down on deployments. The need for business machines is actually a growth-driver for the Indian companies."

Among the new products introduced include its flagship model image1135 priced at Rs. 44 lakh.

With the new product launches, the company will now have 180 products in its portfolio, of which 80 are in the business imaging segment.

The Hindu

From Economic Times

DHL Express has signed a Memorandum of Understanding (MoU) with Bharat Petroleum for a retail alliance with its In&Out convenience stores across the country.

This tie-up will essentially progress in three phases giving access to almost 300-plus stores to DHL, a release issued here on Thursday said. With over 350 DHL-Blue Dart exclusive retail outlets in India, DHL has the largest retail network providing greater accessibility, reach and convenience to customers across India.

"This tie-up is very important to us as we plan to explore all retail approaches through the shop-in-shop and real estate tie-ups," DHL Express India's Country Manager, Craig Grossgart, said.

"Our extensive reach has ensured that customers can avail of both international and domestic shipment needs from one DHL-Blue Dart Express centre. Our tie-up with BPCL will only add to that customer convenience," he said.

In the first phase, DHL, in collaboration with BPCL, plans to roll-out across 25 locations in India which will further be extended to cover Tier 2 and 3 cities.

BPCL's General Manager-Brand & Allied Retail Businesses, George Paul, said that "today, it is increasingly important to differentiate and constantly focus on the customer's requirement."

"It is with this view that we have taken a decision to be associated with a well-known international brand like DHL and provide our customers with convenience of added services at our select retail outlets."

ET

3i India, the Indian arm of private equity fund 3i, is planning to invest $50-60 million (about Rs 300 crore) in various sectors this year.

"We would ideally like to put in $100-150 million (up to Rs 750 crore) this year but $50-60 million should materialize," said Mahesh Chhabria, Partner at 3i India.

The investment would be made across sectors like retail and distribution companies, logistics, back-end retail, education, water and waste management. The average deal size would be in the range of $30-35 million. The private equity fund would invest the money out of its growth fund.

It has an infrastructure fund, India Infrastructure Fund, with a corpus of $1.2 billion (about Rs 6,000 crore) in association with India Infrastructure Finance Company. The fund has already deployed $500 million across road and port projects.

3i's India portfolio is valued at $920 million. Its portfolio includes companies such as OOH Media, Vijai Electricals, Nimbus Communications, International Tractors, UFO Moviez and International Cars & Motors. The fund looks to acquire minority stakes in companies out of its growth capital fund.

It recently offloaded 80 per cent of its stake in Mundra Port and Special Economic Zone for Rs165.33 crore through the open market. It continues to hold 0.36 per cent stake in the firm.

According to sources, 3i India would look at exiting some of its investments in companies such as Nimbus Communications and ITL through IPO route in 2010.

"The deal pipeline has revived. I see lot of deals getting completed and announced in the later part of this year -- post the July- August period. More money will be put in to work next year. There is still a gap between valuations in public and private markets," added Chhabria.

The 3i group in March announced its results wherein its net asset value more than halved and the company reported a record £2.2 billion loss. The UK-based firm is coming up with an underwritten rights issue to raise £700 million ($1.05 billion) and reduce the company's debt.

3i's total assets under management have slipped to £8.02 billion from £9.79 billion in the previous year.

It has recently set up a buyout team in India under Saurabh Shah, which will focus on large scale acquisitions. The investment would come from its global buyout fund Euro fund V, which has a corpus of $5 billion (about Rs 25,000 crore).

"India is emerging as a market for buyouts and that's why we have shown seriousness in that space. The recession has triggered chances of more buyout deals as people would exit non-core assets. One will see a wave of transactions beginning to happen," added Chhabria.

"The Indian Modern Trade scene is getting increasingly complex and competitive by the day, according to the latest Nielsen Shopper Trends India report released today..."

Nielsen found the number of customers frequenting Supermarkets and Hypermarkets has grown by 11 percent in India's eight key metros compared to the last round of Shopper Trends conducted in November '07. Nielsen Shopper Trends also found that one-fifth of Indian shoppers are now spending most of their grocery rupees at Supermarkets/ Hypermarkets.

However, while the Indian shopper continues to embrace the Modern Trade Format, the rate of adoption has slowed in 2008 compared to 2007. Traditional grocery stores continue to dominate the Indian retail scene and are frequented more often by Indian shoppers. While 39 percent of grocery buyers visited a Supermarket/Hypermarket at least once in four weeks, 97 percent of them visited a Traditional store over the same period.

"The exponential growth in the Modern Trade Format's customer base that we have observed in recent years now appears to be stabilizing. Given this scenario, awareness and presence will continue to drive the equity a retail banner enjoys in shoppers' minds," said Asitava Sen, Director, Retail Consulting, The Nielsen Company, India.

Ever-elusive store loyalty

The expanding Modern Trade has given consumers more options to experiment, resulting in shoppers flirting across store banners. The repertoire of stores visited has increased amongst Supermarket/ Hypermarket shoppers, with over one fifth of them visiting four or more stores in a month.

Convenience a strong driver of store choice

Convenience is the key word for India's modern day shopper, and the location of a store is a priority for them. The Nielsen Shopper Trends survey reveals that ease of accessing a store tops the list of attributes driving store choice among Supermarket/ Hypermarket shoppers. While more than half the shoppers are accustomed to visiting their regular store, almost an equal proportion of shoppers claim to have shopped at a store because of its sheer proximity.

A wide array of products is another factor driving store selection, addressing a basic need of 'everything I need in one shop'. The Nielsen survey also found it important to avoid stock-out situations and carry an assortment of product categories and brands.

"Keeping regular customers happy by stocking categories and brands that are important to them is a key mantra to avoid banner switching. Food and grocery is a low involvement category, so convenient and easy access to product categories is particularly important to today's grocery buyer," continued Sen.

While both value for money and low price are rated as important drivers of store choice, Shopper Trends found that value for money had a slight edge over low prices.

The survey also found that shoppers do not explicitly state promotions as a factor that influences their store choice. However, when we consider their actual behavior, then it is observed that attractive and interesting promotions play a vital role in store selection. Shoppers claiming to have checked the newspaper or flyers for coupons and then having gone to the store with attractive deals increased three-fold compared to last year.

What's in the shopping basket?

While spending on total grocery has remained the same, the survey found the proportion spent on Fresh Food Meats or Vegetables to have declined. Shampoos, Detergents, Biscuits, Personal Toiletries, Hair Oils, and Cooking Medium were popular categories purchased in the Modern Trade, while the Traditional Trade remains the most preferred outlet type for all categories according to the Nielsen Shopper Trends report.

Shopper profile

The middle class consumer is increasingly shopping at Supermarket/Hypermarket, according to Nielsen Shopper Trends. The shopper base spreads across socio economic groups, with more than a quarter of customers today belonging to SEC C category. Supermarkets/Hypermarkets are also the preferred destination for younger males' shopping needs.

"In future, the successful retailers will be those who use this shopper information to target their growth via advertising, merchandising and promotional activities, and offer a product range that offers the best demographic fit with the shoppers who visit their stores,' continued Sen.

HSIL Ltd., the manufacturer of Hindware sanitary ware and kitchen products, is pumping in Rs 300 crore to fuel retail expansion in the country with focus on south India where the company is aiming at leadership position.

As part of this exercise, the company is launching exclusive brand mega stores called Hindware Lacasa in select cities starting from Kochi. Mr Sandip Somany , joint managing director of HSIL Ltd. told ET that company would come up with five stores in the first year with an investment of Rs 5 crore for each store.

The stores each having 6000 sq ft would showcase Hindware's elite product range across all categories which the dealers may not have space to stock. The next concept store will come up in Mumbai, Mr Somany said.

Apart from the concept stores, HSIL will help dealers to improve their showrooms and set up more Evok stores specializing in home interior solutions as part of the retail expansion strategy. Currently the company has 1000 direct dealers and 12,000 sub dealers.

``We are at present the market leaders in north and east India but hold the second position in south India. Our market share in the country is 40 % in sanitary ware products. The company's growth rate exceeded the sanitary ware industry growth rate of 10 to 12 % last year,'' Mr Somany said. With the launch of 200 new products this year, the company is also planning to make its presence felt in smaller towns.

Its turnover touched Rs 700 crore in 2008-09 and in the current year HSIL is hoping to touch the Rs 1000 crore mark. Its existing production capacity will be expanded next year to 3.6 million pieces per year from the current level of 3.2 million pieces per year. Around 12 % of the production is being exported to Australia, Nw Zealand, some European and African countries.

 

Promoters have got a go ahead from shareholders to pump in Rs 293 Cr through equity and convertible warrants.

 

Promoters of India’s largest retail firm Pantaloon Retail India have got a go ahead from shareholders to pump in Rs 293 crore ($60 million) into the company. The transaction involving sale of equity and convertible warrants will also help Kishore Biyani and family to raise holding in the company upto 53%.

At present promoters hold 46% in Pantaloon of which around 16% is pledged. As per the transaction they will be issued 11 million equity shares at Rs 183 a share, raising Rs 201.3 crore and a further 5 million warrants at Rs 183 each, to raise Rs 91.5 crore. The promoter holding will increase to 51% through the equity issue and if warrants are converted into equity it would go up further to 53%.

BCCL TO AVERAGE OUT

In addition private equity investor Bennett Coleman & Co Ltd (media firm which invests through ad for equity deals) will be issued 4.1 million shares at the same price to raise Rs 75.03 crore. BCCL is an existing investor and the allotment would help it bring down the original cost of investment.

As per VCCircle calculations BCCL’s average cost of acquisition of Pantaloon shares is pegged at Rs 264. This is excluding the bonus Class B shares that it received few months back for free (and partly sold in March 2009 for Rs 6.2 crore). It currently holds 5.9 million common shares of Pantaloon which will become 10 million shares after the new allotment. Its cost of purchasing the shares would come down from Rs 264/share to around Rs 230/share. Pantaloon scrip was at Rs 225 at BSE in early morning trade.

In the meanwhile, it appears BCCL had sold some shares of Pantaloon at a loss in the previous two quarters. Its holding came down by around 1 million shares between October-December 2008 when the shares traded between Rs 200-275 and further came down by 1.7 million shares in the January-March quarter when the price ranged Rs 100-250. This means BCCL indeed made a loss

over its actual investment cost. It would have partly made up for this loss by the sale of class B shares in March 2009.

Pantaloon is one of the biggest investment (besides Videocon — another notional loss making investment--) for BCCL which strikes ad for equity deals through its private treaty group. The media group is estimated to have put in as much as Rs 230 crore till date and with the new transaction its investment would cross Rs 300 crore in Pantaloon.

The current value of its investment is Rs 135 crore (including Rs 2.25 odd crore through ownership of class B shares). The cost of purchasing the shares is estimated at Rs 155 crore.

PANTALOON RESTRUCTURING

Last month Pantaloon received permission for restructuring, involving the transfer of the ownership of retail and fashion divisions. According to this Pantaloon Retail (India) Ltd will now be renamed Future Markets and Consumer Group, a new holding company for businesses such as financial services, insurance, logistics, knowledge services and media. It will have a wholly owned subsidiary, called Future Fashion Merchandising Ltd. This was viewed by analysts to get private equity investment at the subsidiary level.

The fund-raising is also aimed at bringing the down the debt to equity ratio, which has been steadily rising. The ratio has gone up from 1.17:1 in fiscal year 2007 to 1.21:1 in FY 2008 and is expected to be around 1.4:1 in the current financial year which ends on June 30 (the company follows the June reporting cycle).

According to managing director Kishore Biyani, the restructuring will create three distinct business segments of fashion, retailing, and FMCG and consumer durables.

Blogger Labels: BCCL,Pump,Into,Pantaloon,Retail,India,transaction,sale,Biyani,promoter,AVERAGE,addition,investor,Bennett,Coleman,allotment,cost,investment,VCCircle,acquisition,bonus,Class,March,October,December,January,Videocon,ownership,Last,permission,Future,Consumer,Group,services,insurance,knowledge,Fashion,debt,ratio,ends,June,cycle,director,FMCG,Promoters,calculations,analysts,segments,million,shareholders

An article that appeared in NY times today, says hospitals have started entering the retail business. As walk-in clinics at stores like CVS and Wal-Mart offer convenient alternatives to doctors’ offices and hospital emergency rooms, some hospitals are fighting back — with walk-in clinics at some of those same retailers.Around the country, hospitals are now affiliated with more than 25 Wal-Mart clinics. The Cleveland Clinic has lent its name and backup services to a string of CVS drugstore clinics in northeastern Ohio. And the Mayo Clinic is in the game, operating one Express Care clinic at a supermarket in Rochester, Minn., and a second one across town at a shopping mall. Read more - Hospital Retail Business. In India, we have pharmacy tie up’s largely and some medical camps organized. A clinic inside a supermarket or a hyper market could be a good initiative, both in terms of additional income to the retailer and adding value to the community.

Blogger Labels: article,times,stores,Mart,doctors,hospital,emergency,rooms,Around,Cleveland,Clinic,backup,services,Ohio,Mayo,Care,supermarket,Rochester,Minn,mall,Read,Retail,India,initiative,income,retailer,Hospitals,clinics,offices,retailers

World renowned Swiss watch maker Rolex has sought government approval to set up exclusive retail outlets in India in a joint venture with a domestic partner.

Mahen Boutiques, a wholly-owned subsidiary of KKDL, would be the Indian partner for setting up the stores for selling wrist watches to the high-end consumers in major cities.

Mahen Boutiques has submitted its proposal to the Department of Industrial Policy and Promotion (DIPP) seeking permission for the retail venture, an official said.

While India does not allow foreign direct investment in multi-brand retail stores like those of Wal-Mart, 51 per cent FDI in single brand retail stores like those for Nike shoes, Nokia cell phones, Louis Vuitton and Rolex watches is permitted.

Contact with Rolex firm could not be established.

Golfer Jeev Milkha Singh is the brand ambassador for Rolex watches in India.

These watches are priced upward of Rs 5,000 a piece.

Blogger Labels: Rolex,plans,stores,India,World,Swiss,maker,government,approval,Mahen,Boutiques,KKDL,Indian,consumers,proposal,Department,Industrial,Policy,Promotion,DIPP,permission,investment,Mart,Nike,Nokia,cell,Louis,Vuitton,Contact,Golfer,Jeev,Milkha,Singh,ambassador,piece,outlets

As I see it, the initial brouhaha about the retail industry has quickly faded, the silken robes have now begun to give way to tattered rags, with most of the retail companies in India sitting on piles of stock and mounting debt situations.

Most of the large retail companies that scaled up massively in the last two years – the likes of Reliance Retail, Aditya Birla Retail had the same consultants who sold them similar business plans with inflated returns and profitability. SPSF for supermarkets were estimated between INR 750 – 1,200. The reality is hurting at closer to INR 500.

To aggressively scale up, no one bothered about rentals till yesterday. Business Development teams had targets not in terms of number of stores at x-rentals, but only in terms of number of stores at whatever rentals.

The order of the day was scale up and do it fast. Get a valuation and go public. This scaling up also meant hiring people in droves and hiring double that what were needed as companies fattened their benches, “to scale up fast”.

That dream is now bust.

Reality has set in and order of the day seems “austerity”. Companies are closing non-performing stores, reducing bench strengths, in some cases closing almost all stores and showing almost all their employees the door (as in India bulls). Others as Subhiksha are looking for financing and facing legal battles with FMCG companies, who have taken them to court for payment issues. What is surprising is one of their bankers has done that too, who had presence on their board!

No one said retailing is easy, but what takes the Mickey out of me and everybody else is – why the heck were Indian companies emulating established retailers in developed countries and modelling businesses at their returns. Not learning from their mistakes and learning's that they have had in the last 30 years. Not taking best practice lessons from them. Basically not doing their homework right in each and every way possible, and only modelling businesses at consultant opinions!

So where are we headed now – Re-evaluations. Which means back to the drawing board for most, bust for many and sell out for others.

Coupled with recession, it may take a year or more to come out of the current situation. For those of you reading this blog who have been laid off, take heart in the knowledge that things should start improving in the next 3-6 months once markets start stabilizing and some form of buoyancy returns and customers start shopping again.

Till then, focus needs to be on optimizing costs and getting the most out of a single paisa.

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Cotton Council International (CCI), a global non-profit organisation working towards the promotion of cotton fabric, is looking at tying up with India’s organised apparel retailers.

CCI is planning to allow such retailers, who showcase 80 per cent cotton apparels in their stores, to use its mark of quality.

“In 2003, we launched a similar scheme. However, we later found that some small retailers had started misusing our mark. Now, India’s retail sector is quite matured and the number of organised retailers is also on the rise,” CCI representative for India, Pakistan and Sri Lanka Sachit Bhatia told Business Standard.

CCI has launched its ‘Cool with Cotton’ campaign to help generate awareness about the benefits and versatility of cotton as a fabric, especially for India.

The organisation undertakes activities to promote cotton as the best suited fabric, including fashion shows, road shows and TV reality shows. “We also aim to position cotton as a fashionable fabric for today’s youth and have roped in several Bollywood stars to endorse cotton,” he added.

India is the second largest cotton producer in the world after China and produced about 5.3 million tonnes of cotton in 2008.

“About 5 million farmers are associated with cotton farming in India and almost 85 million people are related with its trade,” Bhatia said, adding the genetically modified cotton variety was the need of the hour to cater to rising demand.

“If India forgoes the genetically modified variety, the cotton production would be reduced to 10 per cent. The cotton yield has risen to Rs 567 kg/hectare due to the genetically modified variety,” he added

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IPC Media’s International department, part of the licensing and syndication division IPC+, has announced the launch of an Indian edition of Livingetc – Britain’s best-selling modern homes magazine.

The deal has been brokered under a license agreement with Images Group, which publishes business and consumer magazines that tap into niche markets.

The Indian edition of Livingetc is the third international venture of a fast growing international magazine title, with editions also in Thailand and Cyprus.

IPC Media’s international publisher Siriliya Nawalkar says:"We are really excited about launching Livingetc in India with Images Group. Livingetc is proving itself as an International brand and this, combined with the expertise of our partner, will, I am sure, make the magazine a great success"

Suzanne Imre, editor of Livingetc UK says:"I’m thrilled about the launch of Livingetc in India. The magazine is already a must-have, cult brand for modern interiors enthusiasts in the UK and I believe there is a huge opportunity for the same thing to happen in India"

IMAGES Group editor-in-chief Amitabh Taneja says:"Considering the recent trend of home and fashion getting closer and given the core strengths of both companies, it creates just the right synergy that the Indian market has been waiting for. Images Group is excited about charting this new territory in the country. We are delighted to partner with IPC Media, one of the largest magazine publishers and the leader in the home interest market in the UK.”

Images Group president and publisher R Rajmohan says:"The last few years have seen a huge change in the way the Indian urban population perceives its immediate physical environment. Easier availability of home products and increased travel have made peoples’ aspirations within reach. We see a huge opportunity and promise in this segment of home fashion and decor. Images Group is upbeat about bringing Livingetc to India; a magazine that has been a phenomenal success in the UK.”

The first edition of Livingetc hits Indian newsstands today, priced 100 Rupees.

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Turning happy doesn’t seem to have worked for the retail business of the India-bulls Group, which also has interests in financial services, real estate and power.

The retail unit of Indiabulls recently repositioned its outlets as Happy Store with a new logo that comprised a smiley transposed on a cheerful yellow shopping bag, but according to a senior manager who recently quit the company and two senior company executives, Indiabulls Retail Services Ltd, the company that houses the retail business, has closed all but four of its 42 outlets.

These outlets had been inherited from Piramyd Retail Ltd, the firm that the group acquired in 2007 for Rs208 crore. In the process, Indiabulls has completely exited some cities such as Ludhiana and Jaipur.

The company, however, opened a new store in March in Destination Mall, situated in Faridabad in the National Capital Region. It also runs a multiplex and a food court in this mall.

Indiabull’s website, however, still says the group is “one of the fastest growing retailers having broad national brand presence with 47 stores located in seven cities”.

“Instead of opening five stores and firefighting on loss-making stores where the business deal is not making sense, it is better to do what we are doing,” said Anil Lepps, chief executive of Indiabulls Retail, in response to why the company has shut most of the stores.

An executive, who recently quit, said the company has also retrenched employees from the stores that have been closed and laid off at least 60 more people in the buying and merchandising team in existing stores in the past three-four months. He did not want to be identified. One of the two company executives mentioned in the first instance confirmed that dozens of people across stores and divisions have either quit or been fired in the past three months. “We are working on a very limited team. We are short-staffed,” he said, asking not to be named.

Lepps, however, said the company has only laid off around 10 people in the merchandising and buying team and is currently trying to rebuild the team with new hires.

Meanwhile, the landlord of one of the closed stores in Jaipur has moved a winding up petition against Indiabulls Retail in the Delhi high court. According to Sanjay Jhanwar, the lawyer representing the landlord in the case, the landlord has sought recovery of Rs1.5 crore against unpaid rent for several months.

In recent months, several retail firms here have either gone bust or have been closing down some stores, scaling back expansion plans, even laying off employees in an attempt to cut costs and to beat the acute downturn in the business that began with the slowdown in the economy.

Subhiksha Trading Services Ltd, the country’s largest discount retail chain, for in stance, has completely halted its operations amid mounting debt and a severe cash crunch.

Other retailers such as Pantaloon Retail (India) Ltd, Reliance Retail Ltd, Aditya Birla Retail Ltd and Spencer’s Retail Ltd have also closed stores and shelved expansion plans in the past year or so.

Indiabulls Retail’s Lepps, however, said the firm was still in a better condition than many of its rivals. “While others are bleeding hundreds of crores, our bleed is over because we have shut down all unprofitable stores,” he said, adding that he is currently focusing on the revival strategy.

“My idea is to get perfect with one store and once we get our model right...then we will plan to open a flagship property in Mumbai in one year and that’s when the new beginning of Indiabulls Retail happens,” Lepps said. “We are trying to figure out a differentiator...”

A March report by audit and consulting firm KPMG International said the slowdown in the retail business is expected to last for another 12-18 months. The firm said the sales growth in modern retail stores in December slowed to 11%, from 35% a year ago.

Indiabulls Retail has been plagued by problems, mainly financial, ever since it entered the business by acquiring Pyramid Retail from the Mumbai-based Ashok Piramal Group. Indiabulls officials privately say they inherited a “mess” from Piramal.

Piramyd was making losses at the time of its acquisition. Many investors expected cash-rich Indiabulls to turn around the company, but it has not happened thus far. On the contrary, the company has had to close down a majority of the inherited stores.

Indiabulls Retail’s stock sank nearly 90% to Rs14 on Thursday, from a peak of at least Rs200 in December 2007. It, however, rose 10% to end at Rs16.30 on the Bombay Stock Exchange on Friday. The firm has also been under fire from vendors in various cities who have accused it of not paying their dues for months together.

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For Kumar Mangalam Birla, ‘More’ means more even in a downturn that has made many a retail venture stop on its tracks.

His Aditya Vikram Birla Group, which runs ‘More’ chain of supermarkets and ‘More Mega’ hypermarkets in the Indian retail market is in the process of relaunching its 640 stores, starting this month. The plan is to take it to 2,200 by 2015.

“The exercise will involve revamping of the stores based on a best practices study that the company has carried out”, said Thomas Varghese, CEO, Aditya Birla Retail Limited.

“We will have 720 supermarket stores by end of 2010. The hypermarket count will go up to 8 to 10 by end of March 2010 and 70 to 80 by end of 2015”, said Varghese.

After acquiring the 167 stores from Trinethra in 2006 and aggressively expanding to about 710 stores, the group had shut down 70 stores across the country after carrying out an evaluation exercise based on scorecards that saw poor performers out.

Its private label brands are present across 350 stock keeping units in processed foods (Feasters, Kitchen’s Promise and Best of India) and home and personal care products (110 %, Enriche, A U 79, Fresh-o-dent, Prarthana, Paradise, Pestex, Germex). “Our private label business contributes to about 4 to 5 per cent of the total turnover”, said Varghese.

Private labels are a good bet for retailers as it offers them good margins without having to spend a lot on mass advertising.

Varghese said that the retail business of the Aditya Birla Group will turn profitable at the end of five to six years. Varghese has been with the Aditya Birla Group for the past 10 years and was given the mandate to turn around the group’s pulp and fibre business before taking charge of the retail operations.

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State-run BSNL is looking for tie- ups with big retail chains in the country to sell its products and services under an aggressive

marketing strategy. The company is inviting proposals from interested retail chains directly or through consortium to sell BSNL's products and services from their outlets, a senior official of the PSU said. The initial agreements will be entered into with the successful retail chain or with the lead partner of a consortium for two years, which can be extended further as per performance. BSNL has operations across India except Delhi and Mumbai.
The retail chains will get upfront payment for basic commission and discounts ranging from Rs 150 to Rs 1,500. The chains need to have a minimum 50 outlets and pan-Indian operations with annual turnover of minimum Rs 50 crore for the past two years. The outlets will sell SIMs, instruments and other telecom products and will have to verify customer identity as per the government norms.
All blank Customer application forms supplied by BSNL will have to be collected by the retail company after being filled by customers along with requisite payment and identity proofs and verified by authorised signatory.

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How about enjoying evening coffee at mobile Alto Cafe mini-van parked in your neighbourhood or trying out the newest flavour of fruit

juice at Revive Juice outlet — the coffee and juice retail brands from France and the UK — in your very own city? Well, this may soon be possible.

Several American and European retail brands in segments as varied as fashion, cosmetics, lingerie, food & beverages, among others, are preparing to make their presence felt in the Indian market through franchise route, as a result of sharp drop in sales in these markets following economic slowdown. Certain brands from countries like the UAE, Brazil and Thailand are also eyeing Indian market.

“Drop in retail sales in Europe and the US markets are leading to this phenomenon. Retail brands that built great amount of manufacturing capacities are under pressure to offload excess inventories and are therefore entering into alternative sales practices by setting up their franchise in large-sized markets like India,” Gaurav Marya, franchising expert and president, Franchise India Holding, told ET.

Following the collapse of the international retail markets, several brands like Beverley Hills Polo (USA), Spa Siam (Thailand), Taman Gang Restaurants (UK) and others entered Indian market through franchise route.

Others like Revive Juice Bars (UK), Mrs Fields Cookies (USA), Jamba Juice (USA), fashion brand Jules (France), cosmetics brand Mikyajy (UAE), lingerie brand Nayomi (UAE), car-wash service brand Moly Company (Thailand), food & beverages brands Habibs (Brazil) and Herfy, BBQ Chicken (Singapore), Pizza Company and Spicchio Pizza (both Thailand), Marina Furniture (UAE), and Alto Cafe (France) are learnt to be at various levels of negotiation to start their services in India.

Companies that have long nurtured ambition to enter retail-friendly markets like India and China are finding this a convenient time as sales in their own countries have tapered. They are trying to convert this as an opportunity to taste Indian waters, which they plan to do for 2-3 years before they decide on their future plans in these countries, says business strategy specialist Harish Bijoor.

“Several brands are looking for green pastures, and India having a decent GDP growth of 4.3% holds lots of potential for them. They are taking up franchise route as they cannot risk coming on their own at this juncture. This also means a big chunk of business coming in for entrepreneurs,” Mr Bijoor said.

Several brands are targeting grade B and C cities rather than expanding in metros, as smaller cities are more brand hungry and retail is not much hit here, say experts.

“With the presence of limited brands in India markets, the country holds big opportunity for these brands as this would also help them re-route inventories and orders to new markets and keep their sagging sales volume intact. At the same time, their Indian counterparts are finding this a right opportunity to strike negotiations to their advantage,” added Mr Marya.

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The Walt Disney Company today announced a direct-to-retail model for its home entertainment business in India.

The business will be supported by a newly formed home entertainment team which will handle the sales and marketing for DVD business in the country.

'Tinkerbell' from Disney's Fairies franchise will be the first DVD released under this new model, a company release said.

"The identification of effective distribution strategies will help us best to meet customer needs and continue to build our brand in India," said Mahesh Samat, senior Vice President and MD, Walt Disney (India).

"Disney has a firm stake in developing the family entertainment sector in this country and we continue to strengthen our market presence by extending our franchises across multiple lines of businesses," he said.

Disney's home entertainment team will focus on providing content, stories and characters from across Disney's extensive content library. The team will also look for local content development opportunities while making sure international content is made available in local languages, he added.

Source: PTI

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