AVB’s ‘More’ to set foot on Gujarat retail market

THE Aditya Birla group’s retail venture, Aditya Birla Retail, is now set to bring ‘More’ brand of stores to Gujarat. Industry sources say that the company has already grabbed around 80,000-1,00,000 square feet of leased space for the proposed foray. While most of the locations are under construction and ready for possession in two-four months, a few more are ready. Birla retail is believed to have signed around 20 properties in Ahmedabad, almost all of them on ground floor. “The company plans to launch its ‘More’ brand supermarkets in Gujarat with an average area of 2,600-7,800 square feet,” said a source. Some ten locations have already been finalised, with few more yet to be finalised. While it will start rolling out its stores in the next three-four months in Ahmedabad, the company also plans to reach out to Vadodara, Rajkot, Surat and Jamnagar. The company announced its national launch in Mumbai in May and has come up with stores in Pune. The company is increasing its presence in South through retail network of Trinethra Super Retail.

It had acquired the south-based chain to further expand in the southern region. Aditya Birla Retail has already faced strong opposition from the vegetarian community in Maharashtra for selling non-vegetarian products and is fearing further opposition in Gujarat, a strong vegetarian market. However, sources say that at present the company does not intend to sell non-vegetarian products in Gujarat market. The company plans to increase its presence across the country. “The stores will be set up in every 3-5 km radius as they are positioned as convenient stores.” The supermarkets would be neighbourhood stores serving daily needs of the customers, including fruits, vegetables and groceries at competitive rates. The company plans to bank on store brands to improve margins. With the APMC act in Gujarat to be amended, the company is looking at tie-ups with farmers.

Piramyd to focus on food business

Piramyd Retail Ltd, which is fast expanding both its retail format stores Piramyd and Tru Mart, intends to increase its focus on food business in coming years. The company plans to flood the food segment with its inhouse brand of butter and sauces, among others. “The food and grocery segment is a major revenue earner. In all other segments except personal, brand loyalty is much low. We have already launched our grocery and spices brand in select markets and later plan to introduce dairy products as well,” said Upamanyu Bhattacharya, chief executive officer of Tru Mart. “We will be coming up with 75-90 stores across the country. Each store will cater to 2,500-3,000 people,” he said. Piramyd is also fast changing the model of Tru Mart stores from neighbourhood stores to supermarkets.

Wadias may help Hamleys enter India

M Rochan BANGALORE

UK’S LARGEST toys retailer could be the latest to set up shop on India’s high streets. Hamleys, the London-based destination toy store, which has been eyeing an Indian foray, is understood to be in talks with country’s retail biggies for a joint venture. Sources said Hamleys is mulling an investment of Rs 500 crore. Hamleys is scouting for a partner who will invest a similar sum. According to an industry source, Hamleys is understood to have identified a property for lease in Delhi as well as a retail partner. Industry sources said Hamleys has initiated talks with business groups such as Wadias and is expected to close the deal shortly. If negotiations do fall in place, the toy maker could start retailing in India as early as next year.

The Wadia Group could not be contacted for immediate comments. “India’s fast growing economy has seen it become an increasingly attractive market for UK retailers with brands such as Kingfisher Plc and New Look looking to enter the market while other’s like Argos and Mothercare are to enhance their growth opportunities. UK retailers are making a beeline to India for they have understood the true potential of the retail sector,” says retail analyst Susil Dungarwal. Hamleys, which has its flagship store on Regent Street, in London, turned into a private company in 2003 following a 69-million euro buy-out by Icelandic investment company, Baugur Group. Baugur has been looking to expand the chain and earlier this year announced plans to open sites in House of Fraser stores in major UK cities. The toy brand was one of the first retail purchases Baugur made in the UK, which owns a host of retail brands like Nine West, Coast, Karen Millen, Pied a Terre and House of Fraser.

Hamleys has a small presence overseas after Baugur introduced Hamleys concessions into three of its Magasin du Nord department stores in Denmark, the success of which led Baugur to roll out the brand across the UK.

ET

Christian Dior arms itself to invest in retail

FRENCH luxury label Christian Dior Couture is converting its franchisee into a subsidiary, which will allow it to invest in retail space, manpower, training and store operations. Until now, it was the Indian franchisee, the Khotes, who were investing money behind the brand. Christian Dior Couture’s (CDC) renewed interest in India comes after the government partially lifted the ban on foreign investment in retail and allowed foreign companies to own up to 51% in single brand companies.

CDC has told the government that it would stick to the rules and sell accessories, garments for men and women, shoes, bags and perfumes under the Dior brand. CDS has given an indicative price for its goods; Rs 58,000 for leather accessories, Rs 17,400 for shoes and Rs 46,400 for watches. CDC’s plans comes a year after its parent company Louis Vuitton Malletier (LVM), also the world’s largest fashion house, converted its trading arm into its own company to retail Louis Vuitton range of goods.

While LVM did it by picking 51% in Mumbai’s LV Trading, CDC is doing so by converting Christian Dior Trading India Private Limited (CDTIPL), owned by two resident Indians, into its own company. Further, it plans to invest Rs 20 crore in five years and create opportunities for exports to its worldwide network of stores. LVMH Moet Hennessy Louis Vuitton, the luxury consumer goods group, is the maker of TAG Heuer and Dior watches, Guerlain perfumes and Moet & Chandon champagne. Following the Indian government’s new law a host of brands - Lee Cooper, Etam and others have got into joint ventures with Indian partners. However the chairman of Technopak (a retail consultancy) Arvind Singhal feels, “It’s no big deal. In India, the ambit of luxury brands is limited . With just 2-3 stores, they don’t make much difference to the economy.’’

At the same time the cap on FDI in single-brand retail has prompted many like GAP, Zara and H&M to stay away from India. Analysts attribute many reasons for this. “Some companies don’t want to share their intellectual properties with a partner while some are unsure if a minority Indian partner would take interest in the company’s growth plans, especially when real estate prices have peaked in all major Indian cities,’’ said Akil Hirani, managing partner of corporate law firm Majmudar & Co. The industry’s common view is that the real growth story would emerge only when foreign investment is allowed in food and grocery retailing which will not only change the retail landscape of the country but also create thousands of job opportunities. At the moment, the law permits foreign companies to own fully-owned subsidiaries in wholesale trade which is accessible only to retailers and institutions.

GREAT INTEREST

Renewed interest in India comes after the government partially lifted the ban on foreign investment in retail and allowed foreign companies to own up to 51% in single brand companies.

PARENT’S FOOTSTEPS

Parent Louis Vuitton Malletier (LVM), also the world’s largest fashion house, converted its trading arm into its own company to retail Louis Vuitton range of goods

GLOBAL PLANS

French luxury label also plans to invest Rs 20 crore in five years and create opportunities for exports to its worldwide network of stores