Updates on the Latest News About the Indian Retail Sector

Weekly Retail News

The categories covered in this report are: (Click to view)
General Plans and Information
Big players – plans and investments
International
Government Policy
Real Estate
Sector specific:

General Plans and Information

1. Who will win the kirana vs. supermarket battle?
A new study by Technopak Advisors suggests that kirana’s will not be beaten down by fancy supermarkets just yet. As Indian’s are becoming addicted to shopping and the retail environment, both traditional and modern outlets will benefit and are expected to grow by 42% in the next five years. Modern retail outlets will account for 15% of that growth and grow by 75% by 2011.

While local stores located close to hypermarkets and supermarkets will be more affected than others, but there are several options for them to convert their stores into before going out of business. Chairman of KSA Technopak, Arvind Singhal says that "Telecom retailing outlets can be put in mom and pop stores and some current retailers could become food service retailers and others could become cyber cafe owners."
Monday, October 16, 2006
Source: CNN-IBN

2. Indian retail market will attract investments worth $412 billion
PricewaterhouseCoopers (PwC) has estimated that $412 billion in investments will come into India by 2011. Hypermarkets and supermarkets will receive the maximum investment, with more than half of it going to food related retail. The figure is substantially higher than the estimated amount of $320 billion that was suggested by Prime Minister Manmohan Singh.
Monday, October 16, 2006
Source: Deccan Herald

3. Everyone wants to get into the booming retail sector
With the entry of several industry big wigs, the retail sector is attracting lots of smaller regional players who are also getting into the game. Some of the new entrants are Guardian and 98.4, Ritu Wears, Bombay Selection, Big Jo’s, V-Mart, Gokul Mart, Viveks and SRS, who are all involved in talks with banks, high net worth individuals (HNIs) and private equity funds to raise funds for expansion plans.

Guardian Life Care is consulting a few private equity firms to raise $20 million to open 600-700 outlets as part of a total of 2,000-3,000 outlets in the next five years. Consumer durables chain Viveks is looking to raise Rs. 1.5 billion to expand in the south, after which it will go for an IPO to raise money for its expansion across the country.
Thursday, October 19, 2006
Source: The Economic Times

Big players – plans and investments

1. Reliance Retail not prepared for launch
If sources are to be believed, all is not ready for the Reliance Retail launch and the company is having problems with training its staff and real estate problems, as realtors increased prices when they learnt that Reliance was looking for properties. Other systems such as IT or its supply chain are not in place either.

The launch date of October 18th is said to be just a rumor started by the media. There is no official word on when the stores will be opening, by sources speculate that December is more likely.
Tuesday, October 17, 2006
Source: Daily News & Analysis

2. Reliance Retail to expand across Asia and Africa
Reliance Retail will be making an entry to retail markets in countries such as Sri Lanka, Nepal, China, Vietnam, Cambodia, Philippines, Maldives, Kenya, Myanmar, Nigeria, Ghana and Tanzania. The company will be retailing specific products such as fresh fruits and vegetables, consumer electronics, household goods and garments that are sourced from India and China. Each location will have country specific retail operations that will open only once at least half of its India stores have been opened.
Wednesday, October 18, 2006
Source: The Economic Times

3. Pantaloon expects revenue of Rs. 50 billion from joint ventures
The Future Group’s subsidiary, Pantaloon Retail India Ltd (PRIL) is targeting revenues of Rs. 50 billion from its joint ventures by 2010. The company will be investing Rs. 5 billion in these joint ventures and hopes for a ten fold return. Joint ventures are being looked at in seven key segments such as footwear, lifestyle, kidswear, food, entertainment and health.

It has already formed some of these agreements such as a 51% stake JV with Liberty India for footwear under the name Shoe Factory, a tie up with kidswear brand Gini & Jony, for the food segment it has tied up with Pan India Food Solutions and Galaxy Entertainment for the entertainment segment.

The company has tied up with Talwalkars for fitness and Indus Clothing for yoga clothing and fitness wear. For the lifestyle segment, the company has tied up with Planet Retail India Ltd, with the Etam brand for lingerie and inner wear and Goldiam International Ltd for its jewelry brand Ola.
Wednesday, October 18, 2006
Source: Business Standard

4. Reliance Retail selects space in Bangalore
Reliance has selected approximately 105,000 sq ft of space in Bangalore’s Central Business District (CBD) on Cunningham Road at Prestige-Feroz. CB Richard Ellis reports that several high profile companies have properties in the CBD such as Swiss Re on Millers Road, Trianz on Infantry Road and Tata Motors and Pivotal on Vittal Mallya Road. Besides the CBD, the Outer Ring Road (ORR) area is also seeing high property prices due to its proximity to Indiranagar and Koramangala.
Wednesday, October 18, 2006
Source: Business Standard

5. Reliance Retail plans pharmacy chain
Reliance Retail’s plan includes opening a network of 4,000 pharmacies in India in the next 3-4 years, starting from January 2007. A large percentage of these pharmacies will be located in rural areas, and will cover the entire range of activities from blood tests, medical insurance, consultancy and of course the retail of medicines. The company has already started hiring pathologists, doctors and managers to run these outlets. Most of the pharma outlets would be set up next to Reliance stores.
Friday, October 20, 2006
Source: The Economic Times

6. Raymond and NIFT sign pact
Raymond and the National Institute of Fashion Technology (NIFT) have signed a memorandum of understanding (MoU) for tailoring services and research and development, in an effort to recognize and give a push to talent from the fashion industry while also improving Raymond’s own tailoring services.

According to this agreement, the Raymond Scholarship will sponsor a top student each semester. Both organizations will also work together on R&D issues such as standardization of sizes and forecasting color and fashion trends.
Friday, October 20, 2006
Source: Business Standard

International

1. Ten Nautica stores to be opened
At the opening of its third outlet in Chandigarh after outlets in Bangalore and Delhi, VF Arvind Brands Pvt. Ltd announced that it will be opening 10 exclusive Nautica stores in the next two years. Nautica products will cover a range of men’s, women’s and children’s apparel and fashion accessories. It will also be bringing in a rage of sportswear for women and home furnishings.
Tuesday, October 17, 2006
Source: Business Standard

2. Wal-Mart looking to source products worth $600 million
Wal-Mart said that it would be sourcing products worth over $600 million from India this year, an increase of around 50% since 2005. The major categories that the company has been sourcing are home textiles, apparel, fine jewelry and household items. The Indian sourcing office of Wal-Mart opened in 2001 and is located in Bangalore.
Wednesday, October 18, 2006
Source: The Economic Times

Government Policy

1. Government clears 3 new FDI proposals
The government has approved three new companies to enter the Indian market in single brand retailing via joint ventures. Spanish company Lladro Commercials will be investing Rs. 58.5 million in Spa Agencies (India) to increase its equity from 26% to 49%. Sri Lanka based Damro Exports Private Ltd will be taking a 51% stake in Damro Furniture Private Ltd, a Chennai based company, to sell furniture under the Damro brand. Italian company Rino Greggio has also been permitted to set up a joint venture to sell silverware and other products. So far, a total of 22 FDI projects worth Rs. 8.96 billion have been cleared.
Tuesday, October 17, 2006
Source: The Hindu Business Line

2. Taking care of the consumer
FICCI and the Indian government have jointly launched FICCI Alliance for Consumer Care (FACC), an interface to address grievances between consumers and businesses. The alliance was launched by L Mansingh, Secretary in the Department of Consumer Affairs and S K Poddar, President of FICCI.
Wednesday, October 18, 2006
Source: The Hindu Business Line

Real Estate

1. Provogue and Liberty International form JV
Provogue India and UK based Liberty International have formed a joint venture to develop and manage shopping centers in India. With the agreement, Liberty International will be taking 25% shares in Provogue’s Prozone Enterprises. Liberty International is expected to invest GBP25 million in 6 centers.
Monday, October 16, 2006
Source: Nasdaq.com

2. Provogue division to invest Rs. 10 billion in shopping centers
Apparel brand Provogue India Ltd’s development subsidiary Prozone Enterprises Pvt. Ltd. announced that it will be investing Rs. 10 billion to develop 6 shopping centers in tier II cities. Most shopping centers to be developed by the company will be in the one million sq ft range. Four of the six cities where shopping centers will come up are Mysore, Aurangabad, Surat and Indore. The remaining two cities will be announced within a month.
Monday, October 16, 2006
Source: The Economic Times

3. Reliance and Ansal tie up for anchor space
Reliance has formed an agreement with Ansal Properties and Infrastructure (APIL) to take anchor spaces in malls developed by the company. Sources indicate that the first of these deals has already been signed for malls in Greater Noida, Palam Vihar and Gurgaon. So far, Shoppers’ Stop has always been the anchor tenants of most Ansal malls.

APIL had recently announced its plans to build 18 new malls, mostly located in tier II and tier III cities and with Reliance Retail focusing on smaller towns too, it’s a perfect arrangement.
Thursday, October 19, 2006
Source: The Economic Times

Sector specific:

Apparel & Footwear

1. Siyaram’s to launch new Ready-to-wear brand
Textile company Siyaram’s will be bringing out a new ready-to-wear (RTW)brand under the name Siyaram’s MSD, the initials stand for Monday to Sunday Dressing but also are the same as the new brand ambassador cricketer Mahendra Singh Dhoni, whose initials also match the brand’s name.

Ramesh Poddar, managing director of Siyaram’s said the target audience of the brand would be 20-35 years old. The brand will consist of formals, semi-formals, casuals as well as club and party wear. The company has decided to launch these products as the fabric market is growing at only 2-3%, while the RTW market is growing at 10-12%.
Monday, October 16, 2006
Source: The Economic Times

2. Fabindia plans to open 51 new outlets
Apparel and home furnishing company Fabindia will be opening 51 stores across the country to reach a total of 100 stores. The expansion is estimated to cost Rs. 800 million. In this endeavor, the company has already opened outlets in Amritsar and Dehradun.

In the north, the company will be focusing on Jammu, Ludhiana and Jalandhar. Besides clothing and home textiles, the company is also targeting the organic food segment and is introducing organic snack food in the market.

The company had a turnover of Rs. 1.35 billion last year and is now planning to reach Rs. 2 billion. Fabindia was founded in 1960 by John Bissell as a showcase of India’s craft and handloom traditions.
Tuesday, October 17, 2006
Source: Business Standard

3. Lingerie brand Triumph plans expansion
International brand of lingerie, Triumph which is currently available in 500 multi-brand outlets (MBOs), exclusive retail stores and franchisees, has now planned a major expansion to connect with consumers in the metro cities. The brand is currently available in only 51 cities, with metro cities such as Mumbai, Delhi and Bangalore driving the growth.

Thorsten Allenstein spoke to Business Standard and said that “The brand consciousness for Triumph is high among Indians. Much before we entered India in 2002, Triumph lingerie was available in the grey market. Our experience in the last four years has been good. By the end of this year, Triumph will be available in 20 more stores. Next year, 50 more stores will sell Triumph lingerie."
Wednesday, October 18, 2006
Source: Business Standard

Home Furnishings

1. Carmichael House to set up 24 stores by October 2006 end
S Kumars home furnishings brand Carmichael House will have 24 stores by the end of the month. So far, the company has 8 stores in India. While 30% of the stores will be company owned, the balance would be franchises. The Carmichael House brand was launched in August 2006 and has registered Rs. 300 million in sales and is targeting Rs. 1 billion by March 2007. The company has 27% of the organized home textiles segment, which is estimated to be worth Rs. 3.5 billion.
Tuesday, October 17, 2006
Source: Business Standard

2. S Kumars acquiring US home furnishings manufacturer and distributor
S Kumars will be purchasing American Pacific a US home furnishings manufacturer and distributor for an estimated $90 million. While company sources have not confirmed the report, an official announcement is expected at month end. American Pacific is a major supplier of bed, bath and window products to several major US brands such as Nautica, Dockers and Liz Clairborne and also produces home linen under its own brand name.

Once through, this deal will be the third largest overseas acquisition in the home furnishings segment in the past year. The other deals so far have been GHCL’s acquisition of Rosebys, a UK based chain and Dan River, a US based textile company.
Wednesday, October 18, 2006
Source: The Economic Times

3. Mudra Lifestyles plans Rs. 2.2 billion expansion
Textile company Mudra Lifestyle has made plans to expand its weaving, processing and apparel manufacturing facilities to cater to the current retail boom. The expansion cost is estimated to be Rs. 2.2 billion. The company wants to be able to meet orders from both domestic and international customers, once the expansion is complete.

Mudra is one of the biggest manufacturers of shirts and supplies to major companies such as Wal-Mart, JCPenney, Rip Zone, Primetex, Albacco, Allen Flusser, American Models, American Julliet, Reliance, Raymonds, Killer, Lee and its own brand Madura Garments.
Wednesday, October 18, 2006
Source: Business Standard

Bookstores

1. Future Group bets on publishing
The Future Group is betting big on publishing and is negotiating to acquire copyrights of best sellers from several foreign and Indian publishers. So far, the company has acquired Indian publishing rights for 18-20 foreign titles. These are in children’s and health book segments and will be sold under the company’s Depot brand, the Future Group’s private label for books.

Future Group CEO stated to The Economic Times that “The group is in an advanced stage of negotiations with foreign publishers, including those from countries like the UK and Canada.” Preeti Vyas, business head for Depot, added, “Since we will have exclusive copyrights for selling these titles in the Indian market, the price will be customized.” Depot also plans to bring in Indian authors to produce independent titles.
Monday, October 16, 2006
Source: The Economic Times

Consumer Durables

1. Pre-Diwali sales subdued
Consumer durable sales in the pre Diwali season are not up to par this year. Most retailers and manufacturers rely heavily on the sales during this period to carry them through the year and with only 4 days left; there is no coherent picture of upward sales as yet as sales in different product categories have varied sales.

LG saw almost a 100% spike in sales in June due to the World Cup and a modest 20% increase during Onam-Durga Puja celebrations. Onida on the other hand, did not see higher sales in the festival period. Samsung reports that LCD TVs have seen a 930% growth over last year and other categories such as plasma TVs and frost free refrigerators are also doing well.
Tuesday, October 17, 2006
Source: The Economic Times

Food & Grocery

1. TGIF makes expansion plan
US based TGIFriday’s will be expanding its operations to set up 35 stores in the metros as well as other cities in the next five years. The total investment required for the expansion will be Rs. 1.4 billion. Sanjoy Roy, executive vice-president (operations) for TGIFriday’s said that the company will be opening 5-6 stores each year to reach 40 stores after five years.

At present there are TGIFriday’s in Bangalore, Delhi, Mumbai and Gurgaon and new stores are being planned for Chandigarh, Chennai, Hyderabad, Jaipur, Kolkata and Noida.
Monday, October 16, 2006
Source: Business Standard

2. Vishal Retail to invest Rs. 600 million in stores and manufacturing facility
At the launch of the company’s second hypermarket in Ludhiana, Surinder Kumar Aggarwal, director of Vishal Retail Ltd, parent company of Vishal Mega Mart, announced that it will be investing Rs. 7 billion to establish 60 hypermarkets and also set up a manufacturing facility in Dehradun. The new store was the company’s fifth opening in the state of Punjab, after Ludhiana, Patiala, Jalandhar and Amritsar.

The company will be opening stores in Chandigarh, Mohali and Panchkula where they are in the final stages of selecting locations. Once the company is well established in the northern states, it will focus on south India.
Tuesday, October 17, 2006
Source: Business Standard

Jewellery & Watches

1. Liberty Group and Egana sign agreement
Indian footwear maker Liberty Group has signed an agreement with Egana Goldpfeil to bring out a line of watches, jewelry, leather and eyewear. Based on the agreement, the company will jointly open outlets in Delhi, Mumbai and Bangalore next year. Egana’s portfolio includes brands such as Carrera, Pierre Cardin, Esprit, Cerruti, 1881, Junghans, Sioux, PUMA, Comtesse and Salamander.
Tuesday, October 17, 2006
Source: The Hindu Business Line

2. Rajesh Exports to open 2 more stores
Jewelry manufacturer and exporter Rajesh Exports will be opening 2 more stores under the Laabh Jewelers brand in Bhubaneshwar and Secunderabad. Including these two stores, the total will reach 10 stores for the company. These will be the company’s first stores in both Orissa and Andhra Pradesh.
Wednesday, October 18, 2006
Source: The Economic Times

3. Timex plans to double its turnover
Timex Watches Ltd plans to double its turnover by the year 2008 and increase its stores to 120 across India. According to Salil Sadanandan, Senior Vice President of Sales and Marketing, "We closed the previous fiscal with a turnover of about Rs. 1 billion. The 120 new exclusive brands stores, based on a franchise model, would help us clock revenues to the tune of Rs. 2 billion by 2008."

Currently, Timex sells its products through 3,000 multi brand outlets (MBOs) and with this expansion; the company is focusing on creating a chain of exclusive company owned Time Factory showrooms. Apart from metro cities, these Time Factory outlets will be opened in Agra, Ranchi, Chandigarh and Kochi.
Wednesday, October 18, 2006
Source: The Economic Times

Luxury and Lifestyle

1. India becoming a destination for luxury shopping
Luxury brands are realizing the potential for selling to Indian customers. The number of potential households is estimated to be 1.6 million currently and along with increasing buying power and awareness of luxury brands, the Indian consumer is very concerned about the exclusive factor associated with buying high priced products.

While a few years ago, India’s rich spent their money outside the country, now they are shopping here in India. The Indian luxury market is still very small at $455 million, as compared to $2 billion in China but the Indian market is growing at a faster rate.

Besides Delhi and Mumbai, the rich are located in 8-10 other cities in India and despite higher prices for luxury goods in India, consumers are lapping them up faster than even the Europeans.
Tuesday, October 17, 2006
Source: CNN-IBN

2. Bose looks to tier II towns
Bose Corporation India Private Limited (BPCIPL) will be opening 12 new stores in the next 18 months, focusing on tier II towns, with some of stores in cities where the company already has exclusive stores. Currently there are stores in Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad. New stores will be opening in towns such as Ahmedabad, Pune, Jaipur and Chandigarh. Sales in India are showing the highest growth rate in the Asia Pacific region.
Wednesday, October 18, 2006
Source: Business Standard