THE fast growing retail space could see another acquisition soon. After snapping up Trinethra Retail, the Aditya Birla group is learnt to have set its sights on Mumbai-based Piramyd Retail. If successful, this would be the AVB group’s second acquisition in five months (it had bought the South-based Trinethra in January) in organised retail, one of India’s fastest growing industries, estimated to be worth $300 billion.
Piramyd Retail, part of the Piramal Group, posted a loss of Rs 7 crore in the year ended March 2006. Its revenues stood at Rs 104.86 crore. The company has seven Piramyd lifestyle outlets and around 14 Trumart grocery shops across the country. The AV Birla group, according to sources, is expected to route the acquisition through its unlisted retail arm Aditya Birla Retail. When contacted, an Aditya Birla group spokesperson declined to comment, saying the issue was speculative in nature. However, group sources said executives from Piramyd Retail had met with senior Birla group officials last month. Piramyd executives made a presentation to the Birla group. “Negotiations are at a very close stage,” a group source told ET. Piramyd executive vice-chairman Nandan Piramal denied the possibility of an acquisition by the Birlas. “We are on our own and are looking at expanding our presence,” he told ET. The Indian retail sector has been active with talk of a likely acquisition of Piramyd. It was learnt that the company has been talking to large players for a strategic equity partnership and had even approached the Tatas for participation.
A few years back, Piramyd was seen as a strong competitor to players like Shopper’s Stop and Pantaloon. However, lack of strong management focus and an unclear growth vision saw the Piramyd brand slipping over the last two years when competition picked up steam. The situation prompted talk that the company may seek foreign equity partnership. Recently, Mr Piramal told ET that the company was keen to revamping business operations and had initiated joint venture talks with foreign retailers to set up new formats like speciality stores or hypermarkets. The revamp included handling the company’s core brands—Piramyd and Trumart—as separate business units. “We have realised that there is a lot of catching up to do and are in a hurry to do that. We have tied up additional space in the last one year. There is a complete change across functions in the way we look at business and a lot of dynamism is being brought in. Our team is in place and the growth focus is clear,” said Mr Piramal, adding that expansion may be funded either through internal accruals or private equity.
Piramyd is planning to boost its presence by setting up shops in smaller cities. Recently, it launched a lifestyle store in Jaipur. It is already present in Pune, Ahmedabad, Nagpur, Delhi, and Ludhiana. Pyramyd stores sell branded-merchandise in the lifestyle and fashion segments in men’s wear, women’s wear, kid’s wear, home fashion and lifestyle accessories. Trumart is being positioned as an upscale kirana outlet with a focus on local catchment areas. “Instead of setting up single stores across cities, we are planning to progressively exhaust each city by ramping up Trumart outlets in residential areas and building up scale in each market,” said Trumart CEO Upamanyu Bhattacharya. “Grocery, home and personal care products are high-volume-lowmargin-business and it makes better business sense to focus on scales to be competitive,” he added.
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