Company Profile (Arvind Mills & Lalbhai Group)

A Compilation on
Arvind Mills & Lalbhai Group
Source: Web links
www.arvindmills.com

by:
RetailingInfo
A Forum on Retail by FDDI Students

Objectives
Our main objective for compiling information on Arvind mills is to cover knowledge about those Denim brands which are unknowingly associated with foreign image or origin, but actually either they are created by Arvind Mills or their franchise has been taken by them. Beside these there are many more brands which are complimentary to apparel industry and produced by Lalbhai Groups in record quantity.
Lalbhai Group (Arvind Mills)
TEXTILES / YARNS / GARMENTS
1. The Arvind Mills Limited
2. The Arvind Products Limited

OTHERS
1. Atul Limited
2. Amol Dicalite Limited
3. Anup Engineering Limited

ARVIND MILLS LIMITED
The Arvind Mills was set up with the pioneering effort of the Lalbhai brothers in 1931. With the best of technology and business acumen, Arvind has become a true Indian multinational, having chosen to invest strategically, where demand has been high and quality required has been superlative. Today, the Arvind Mills Limited is the flagship company of Rs.20 billion (US$ 500 million) Lalbhai Group.
In the regular changing scenario of fashion, company has maintained its focus on its core product which gives an upper hand in the competition through the world. With its presence across the textile value chain, the company endeavors to be a one-stop shop for leading garment brands.
Forevision and Technology has brought Arvind to be one of the top three producers of Denim in the world, and on its way becoming the Global Textile Conglomerate, Arvind is already making its presence felt in Shirting’s, Knits and Khakis fabrics apart from being all set to create ripples in the ready to wear Garments world over.
ARVIND PRODUCTS LIMITED
The company is a subsidiary of The Arvind Mills Limited. The principal business segments of the company include manufacturing and marketing of Voiles fabrics, Bottomweight fabric (khakis) and Yarn. The company operates through its divisions viz: Arvind Intex (with both ring and open end yarn manufacturing under one roof), Arvind Cotspin (manufacturing 100% cotton yarn and double yarn in a wide range of counts and varieties) and Ankur Textiles (manufacturing of Voiles)
ATUL LIMITED
The Rs.600 crore Atul Products, set up in 1947, is one of the Asia's largest and greenest chemical complexes. The company has grown to become India's largest dyestuffs manufacturer, making and marketing over 250 varieties of chemical and intermediates, from basic commodity chemicals to specialty intermediate required for the agrochemical, defense, dyestuff, leather, paper, pharmaceutical and textile industries. Atul exports to more than 50 countries. For more details, visit atul.co.in
AMOL DICALITE LIMITED
A group company with the business ranging from Textile clothing to Filter Aids to Perlite Products.
ANUP ENGINEERING LIMITED
It is one of the leading Engineering companies engaged in manufacturing process equipment for Chemicals, Refineries, Petrochemicals, Pharmaceuticals, Fertilizers, Drugs and Allied Industries. The company is equipped with Laboratory to carry out various destructive and non-destructive tests apart from an independent quality control department. The company undertakes design and manufacture of equipment’s to meet the requirements of national and international codes such as ASME, BS-5500, TEMA, EJMA, IBR, IS2825 etc for design, manufacturing and testing apart from any other specific quality requirements specified by the customer. Equipment and components are manufactured out of carbon steel, stainless steel, monel, inconel, cupronickle, aluminum alloys, clad sheets, querched and tempered steels, etc.
History

The three creators of Lalbhai Group
Kasturbhai Lalbhai
Narottambhai Lalbhai
Chimanbhai Lalbhai
The Evolution
1930 was a year the world suffered a traumatic depression. Companies across the globe began closing down. In UK and in India the textile industry in particular was in trouble. At about this time, Mahatma Gandhi championed the Swadeshi Movement and at his call, people from all India began boycotting fine and superfine fabrics, which had so far been imported from England. In the midst of this depression one family saw opportunity. The Lalbhais reasoned that the demand for fine and superfine fabrics still existed. And any Indian company that met this demand would surely prosper. The three brothers, Kasturbhai, Narottambhai and Chimanbhai decided to put up a mill to produce this superfine fabric. Next they looked around for state-of-the-art machinery that could produce such high quality fabric. Their search ended in England. The best technology of that time was acquired at a most attractive price. And a company called Arvind Mills was born.
Arvind Mills started with a share capital of Rs 2,525,000 ($55,000) in the year 1931. With the aim of manufacturing the high-end superfine fabrics Arvind invested in very sophisticated technology. With 52,560 ring spindles, 2552 doubling spindles and 1122 looms it was one of the few companies in those days to start along with spinning and weaving facilities in addition to full-fledged facilities for dyeing, bleaching, finishing and mercerizing. The sales in the year 1934, three years after establishment were Rs 45.76 lakhs and profits were Rs 2.82 lakhs. Steadily producing high quality fabrics, year after year, Arvind took its place amongst the foremost textile units in the country.
In the mid 1980’s the textile industry faced another major crisis. With the power loom churning out vast quantities of inexpensive fabric, many large composite mills lost their markets, and were on the verge of closure. Yet that period saw Arvind at its highest level of profitability. There could be no better time, concluded the Management, for a rethink on strategy. The Arvind management coined a new word for it new strategy – Renovision. It simply meant a new way of looking at issues, of seeing more than the obvious and that became the corporate philosophy. The national focus paved way for international focus and Arvind’s markets shifted from domestic to global, a market that expected and accepted only quality goods. An in-depth analysis of the world textile market proved an eye opener. People the world over were shifting from synthetic to natural fabrics. Cottons were the largest growing segments. But where conventional wisdom pointed to popular priced segments, Renovision pointed to high quality premium niches. Thus in 1987-88 Arvind entered the export market for two sections. Denim for leisure and fashion wear. And high quality fabric for cotton shirtings and trousers. By 1991 Arvind reached 1600 million meters of Denim per year and it was the third largest producer of denim in the world.
In 1997 Arvind set up a state-of-the-art shirting, gabardine and knits facility, the largest of its kind in India, at Santej. With Arvind’s concern for environment a most modern affluent treatment facility with zero affluent discharge capability was also established.
Year 2005 is a watershed year for textiles. With the mulitifiber agreement getting phased out and the disbanding of quotas, international textile trade is poised for a quantum leap. In the domestic market too, the rationalizing of the cenvat chain and the growth of the organized retail industry is likely to make textiles and apparel see an explosive growth
Arvind has carved out an aggressive strategy to verticalize its current operations by setting up world-scale garmenting facilities and offering a one-stop shop service, of offering garment packages, to its international and domestic customers.
With the Indian economy poised for rapid growth, Arvind brands with its international licenses of
1. Lee
2. Wrangler
3. Arrow
4. Tommy Hilfiger
and its own domestic brands of
1. Flying Machine
2. Newport
3. Excalibur
4. Ruf & Tuf
is setting its vision on becoming the largest apparel brands company in India.

Company Profile (Globus & Rajan Raheja Group)

A Compilation on
GLOBUS
Source:Weblink
Rajan Raheja Group
Globus

by:
RetailingInfo
A Forum on Retail by FDDI Students

Globus
Globus is an Apparel Retailing arm of Rajan Raheja Group, a group which has a market experience of about 3 decades, turnover of Rs. 86 billion and about 19000 employees.

There are more interesting fact which can add your interest in the Group as you came to know that this is the same group which has its hand in few very famous brand name in different sector like Exide batteries, Outlook publishing House, Prism Cement, Asianet cable Channel and many more. Beside this they also have stake in many famous upcoming big retailing projects with Big Retailer like Dairy Farm Int. as their partner.
So to get more detailed knowledge about the group read the content below which is compiled by us with the help of matter on websites of Globus and Rajan Raheja Group.
Rajan Raheja Group
30 years of excellence
The Rajan Raheja Group is led by Mr. Rajan Raheja, a renowned businessman involved in the Real Estate Development business for over 3 decades. The company diversified into manufacturing and financial services over the last two decades.
The emphasis is on setting up focused companies, which aim to be profitable leaders in their respective fields with a long term outlook.
All Group Companies are professionally managed by independent CEOs.
Most of the Group Companies has a leading position in:
Market share, Technology, Brand, Distribution or Profitability
The Rajan Raheja Group is a Strategic/Financial partner in many of the businesses where it has management control. It is also an equal JV partner/strategic investor in quite a few ventures.

Highlights:
-Total Turnover: Over Rs. 86 billion ($ 2.1 billion)

- Total Capital Employed: Over Rs. 57 billion ($ 1.4 billion)
- Total Employees: 19,000

Group Companies

1. R. Raheja Properties (Property Development)
As understood by name this wing of Rajan Raheja Group is dealing in property. It is a Real Estate Development Group of the company and developing numerous prestigious residential and commercial complex in Mumbai.

2. H and R Johnson (india) Ltd. (Ceramic Tiles)
It deals in manufacturing of Ceramic Tiles. Started in collaboration with H & R Johnson UK and in 1993 they acquired H and R Johnson (India) Ltd.
3. Exide Industries Ltd. (Battery)
This is a common brand dealing in Automotive and Industrial battery segment.
4. Prism Cement Ltd. (Cement)
A cement production company commissioned in June 1997, and has a plant in Satna, Madhya Pradesh.
5. RMC Readymix (India) Pvt. Ltd. (Concrete)
RMC stands for Ready Mixed Concrete which was established by RR Group in India
6. Asianet Satellite Communications Ltd. (Cable TV)
A well Known Cable TV network in Southern state of Kerala since 1999, in which group owns 100%.
7. Outlook Publishing (Inida) Pvt. Ltd. (Publishing House)
Most famous brand in group kitty. Magazine published by this group comprises of
- “Outlook” since 1995
- Outlook Money
-Outlook Traveller
-“Outlook Saptahik” a Hindi Weekly News Magazine.
-“Outlook Business” a recently launched Business magazine.
-“Marie Claire” Indian Edition.
-5 travel books on overseas destinations co-branded with Insight.
8. Globus Stores Pvt. Ltd. (Retailing)
Apparel Retailing
The group has set up a chain of apparel stores under the name “Globus”.Fully owned by the group company, the focus of Globus is to build Globus and F21 as strong fashion led brands for apparel.
The company has a strong design and supply chain team. It is one of the few brands in India which has apparel products in all major categories for men, women and kids.
18 stores across India, 15 more stores to open shortly and plans to expand to 125 stores in 4-5 years makes Globus a formidable player in the retail business. It is well on track to become India’s largest own brand apparel chain.
The company has recently launched Globus Inter-Exchange which is India’s first retail youth portal - http://www.gix.in/
9. Hathway Cable and Datacom Pvt. Ltd. (Cable TV)
The company dealing in Cable Television in which group owns 63% with Star TV having 22%.



Joint Ventures

1. Foodworld Supermarkets Ltd. (Retailing)
Food Retailing
The group has an effective stake of over 25% in FSL.
Dairy Farm (part of Jardine Matheson group) that controls 49% stake is an Asian focused retailer operating supermarkets, hypermarkets, convenience stores, health & beauty stores, home, furnishing stores & restaurants. Dairy Farm operates 3300 outlets in 8 countries / territories with 62000 employees and has sales of $5.5 billion.
FSL has 58 stores in Bangalore, Hyderabad & Chennai. The company plans to expand to over 250 stores within 4 years, with a turnover of Rs. 15 billion ($320 million).

2. Health and Glow (Retailing)
Health and Beauty Retailing
The group has an effective stake of 25% in the company.
Dairy Farm controls a 50% stake. The company has 43 stores in Chennai, Mumbai, Hyderabad, Vizag and Bangalore with an annual turnover of Rs. 640 million ($16 million).
Expansion plans to cover 240 stores within 4 years, with a turnover of Rs. 1.9 billion ($ 40 million) are in the wings.

3. ING Vyasa Life Insurance Co. Pvt. Ltd. (Insurance)
A JV between following companies
- Exide with 50 %.
- ING Group N.V. Netherlands with 26 %
- Ambuja Cement and Enam with rest of holding.
4. ING Vyasa Mutual Fund (MF)
The Group has a 39% stake in the company; ING controls a 42.5% stake with Kirti Equities holding the balance.
5. Sonata Software Ltd. (Software)
The Rajan Raheja group is one of the co-promoters of the company, which is one of the leading software companies in India.
6. Supreme Petrochem Ltd. (PetroChem)
The Rajan Raheja Group are co-promoters of Supreme Petrochem Ltd. along with Supreme Industries Ltd., the largest processor of plastic materials in India.
7. Raj Vilas & Trident-Hilton (Hospitality)
This group is a co-promoter in Hospitality Industry with Oberoi Rajvilas Group.
8. J.W. Marriott (Hospitality)
The group is a co-promoter of the prestigious J. W. Marriott, Mumbai.

Globus Stores Pvt. Ltd.
History
Launched in January 1998, Globus is a part of the Rajan Raheja group. The company opened its first store in 1999 at Indore followed by the launch of its second store in Chennai (T-Nagar). Soon to follow was another in Chennai located in Adyar. The flagship store in Mumbai was opened on 1st November 2001 followed by a swanky new outlet in New Delhi in South Extension Part-2.
The sixth and seventh stores are in Bangalore in Koramangala and Richmond Road respectively. The Eighth store in Ghaziabad at Shipra Mall followed by the ninth, tenth and eleventh in Kalaghoda, Mumbai, Thane and Ghaziabad, twelfth store at Kanpur and thirteenth store in Ahmedabad and fourteenth store in Lucknow.As of May 2008, Globus has opened its 24th Store in Nagpur and the journey continues...

Mission
Achieve customer delight by offering quality products and services through a process of continuous innovation and adaptation.
Build a dynamic team of committed and passionate employees through sustained learning and grooming.
Develop mutually beneficial relationships with our business partners.
Employ cost-effective processes and thereby create a strong organization.

Globus Brands
Globus
Youth Fashion Brand
Globus aspires to be ‘the’ iconic youth fashion brand in the country. Globus is a complete fashion brand – it’s the apparel brand and the destination brand. Three words which capture the spirit of the youth – vibrant, maverick and expressive. Globus is exactly that…our vibrant and maverick designs are not just setting fashion trends but more importantly helping our customers express themselves.
The entire fashion range comprises of apparel for men, women, kids and accessories at amazing prices. The range spans across usage occasions – work wear, campus wear, club and lounge dressing and genres Western, Indian and mix-n-match. A well researched sizing ensures a good fit for the Indian silhouettes.

F21
Eye candy fashion
F21 is an accessible hi-fashion brand, offering high-quality apparel. F21 – the edgy fashion brand - is designed to appeal to the more experimentative and adventurous consumers who seek cutting edge fashion. Styling and fabric innovations help F21 offer high end fashion at prices which are affordable for the young consumers. From everyday casual occasions to clubwear, F21 promises consumers attention unlimited.

The Globus Design Hub:
The heart of our business lies in this creative workplace of our organization named Globus Design Hub. It has been recently launched in July’07 in Andheri-Mumbai and is at its early stages to becoming the leading design talent floor. It is the most well equipped design studio in India in current times.

Year 2007
Globus opens in Aurangabad, Noida/Delhi, Raipur, Ludhiana, Dahisar/Mumbai, Vashi/Navi Mumbai and Moradabad.

Year 2008
Soon to open in Vadodra, Nagpur and Kolkata.

Reliance Retail ties up with UK's Wincanton for back-end biz

After having signed up at least half-a-dozen partnerships for specialty formats, Reliance Retail is now entering into a joint venture with leading European supply chain specialist Wincanton for its food and grocery and hypermarket businesses.

The synergy would enable Reliance to efficiently run its critical back-end operations, which essentially include warehousing of goods and transporting them to stores on time.

The latest move by India’s largest corporate house, which jumped on the retail bandwagon two years ago by promising to do everything on its own, seems to suggest that it now needs a partner for almost every retail initiative.

Industry observers believe that the company has expanded very fast and has managed to set up over 600 stores across various retail formats in less than two years, but its supply chain is in a mess. “How to get the right merchandise to the stores on time has been its biggest problem. You’d often not find the goods you want in Reliance’s food and grocery outlets,” said a source.

Wincanton, the UK-based $4-billion supply chain solution provider, has been roped in precisely to tackle this problem. It is expected to completely take over the supply chain, find the right warehouses for goods and transport them in time and in the right quantity to Reliance Retail stores.

Supply chain solution providers, Wincanton, for example, have IT systems in place to update them with regular data on inventory level in stores.

So, even without a store manager calling up, the warehouse manager would know the stores’ requirements. Wincanton serves several companies across industries, from FMCG to retail, automotive and oil. Its client list includes retail giants Tesco and Woolworths, auto companies Ford and DaimlerChrysler, and consumer goods firms P&G, Nestle, SAB Miller and GSK.

For Reliance, an alliance such as this means a major shift in its strategy. The season of alliances has begun at Reliance with specialty stores and is now fast extending to almost everything. Two years ago, when India’s largest private telecom operator, the Bharti Group, announced a tie-up with the world’s largest retailer, Wal-Mart, many thought it had got a headstart over other Indian corporate biggies foraying into retail.

But unlike Bharti, Reliance had decided to go solo. It made the ambitious announcement, not unusual from the house of the Ambanis, that Reliance Industries had earmarked Rs 25,000 crore for its retail business. Reliance had evaluated the options of partnering with a foreign retailer as well as buying out an existing Indian retailer, but had not found it very exciting.

True to its form, Reliance built scale fairly rapidly, spreading from one city to another. The growth was achieved through a team of professionals poached from existing Indian retailers, but the pace of execution dwarfed rivals’ achievements.

Reliance, however, realised it needed to do a lot more on the back-end to continue the pace of expansion and return early profits, which its shareholders usually expect.

“It didn’t take Reliance long to realise that retail was a different ballgame altogether. It’s not just about some long-term government policy or certain business competency, which it’s known to manage well. The variables in retail business are far too many. There could be a number of factors such as general economic downturn, terror scare, shorter wedding season, cricket season like an IPL or a political protest, which can affect store sales. You need to be able to manage that,” said a source close to Reliance.

The company has entered into alliances with foreign companies for several specialty stores, including opticals (Pearle Europe), toys (Hamleys) and apparel (M&S).

In most cases, the foreign retailer has the majority stake. This model, however, can’t be extended to front-end retail in food and grocery or hypermarkets as Indian laws don’t allow FDI in multi-brand retail. But it could be done in the cash and carry segment or retail back-end, an area where Reliance is in urgent need of help.

August 15, 2008
Source: Economic Times

Shortened supply chain

The cash and carry business model brings together small, medium and large-sized producers, farmers, agricultural cooperatives and manufacturers, with the dispersed community of hotels, restaurants, caterers, traders, retailers and small to medium business enterprises, under one roof.

A cash and carry retailer buys directly from producers and manufacturers and sells to business customers from its no-frill approach wholesale centres.

In this way, cash and carry operators shorten the supply chain and eliminate the high costs associated with a fragmented supply chain (estimated as high as 25 per cent in India). It also cuts costs and wastages by building modern trade infrastructure and implementing modern IT-based systems, which improve efficiency.

By aggregating the demand of small and medium businesses, cash and carry formats are able to buy in bulk quantities for the advantage of its customers. Some of the savings made are passed on to the suppliers, some to the customers, while cash and carry retailers benefit from the supply chain efficiency that they are able to create.

August 13, 2008
Source: Hindu Business Line

Cash n’ carry business gets competitive

The cash and carry segment of the country’s Rs 14-lakh-crore retail sector is getting competitive.

Metro Cash and Carry India, a 100 per cent subsidiary of Metro Cash and Carry International GmbH, Germany, the first to foray into the country more than five years ago with a store in Bangalore, currently has four stores and is opening a fifth one in Kolkata soon.

With today’s announcement of a partnership with the Tata group’s Trent, UK retailer Tesco is the latest player to enter the business, after Wal-Mart declared an exclusive tie-up with Bharti Retail last year.

“The market potential for the cash and carry business is huge, in fact, as big as the retail sector in addition to the demand from hospitality players, traders and farmers,” said Mr Gibson Vedamani, CEO, Retailers Association of India.

The cash and carry model brings the small retailer into the organised channel by helping them buy in an organised manner, points out Mr Vedamani. In addition to this, entrepreneurs and retailers in Tier-II and Tier-III cities would have access to the entire range of products available in the market, he says. The cash and carry business intends to reduce several layers in the wholesale business.

“We believe that the cash and carry format brings significant benefits to small businesses such as retailers, traders, hospitality segment and farmers with its unique business-to-business format. The cash and carry segment was opened because the Indian Government recognised the benefits it brings to economies such as ours and is welcoming new players in the industry,” said an official spokesperson from Metro Cash and Carry, India.

Metro stocks approximately 19,000 SKUs (stock keeping units) in the food and non-food segment across various product categories.

August 13, 2008
Source: Hindu Business Line

Reliance Brands may propel Adidas retail

Adidas may bank on Reliance Brands, a subsidiary of Reliance Retail, for expanding its store network in the country. Reliance Brands is in discussions with Adidas to pick up store franchisee rights.

Sources said Reliance has pitched in to accelerate store development plans of Adidas. Reliance Brands and its parent, Reliance Retail, till now have stayed focused on striking equity joint venture or exclusive licensing deals to launch lifestyle brands in India.

But the move with Adidas is a pure distribution play, which is considered the single biggest challenge for the global lifestyle companies. There are just a few independent distribution companies focused on the lifestyle sector, with Aryan Lifestyle, part of Emaar MGF, and Primus being the prominent ones. These entities primarily pick up store franchisee rights for global brands operating in India, and the entry of Reliance into this space is significant, industry observers added.

“We are in discussions with several potential partners for franchisee operations and Reliance is one of them. We have very aggressive expansion plans and they can not be executed by one company alone,” Adidas India managing director Andreas Gellner told ET.

Mr Gellner said it will continue to operate with existing francisee partners like Primus in propelling the growth engine. “India’s fashion industry is singularly challenged by distribution (capabilities), and not by demand and supply challenges,” an industry source explained.

Adidas has around 330 stores at present and plans to open 100 more within a year, as it charts forays into smaller towns. The global giant saw its domestic business jump 30% in the first six months of the calender year.

August 12, 2008
Source: Economic Times

UK's Boots ties up with Reliance Retail

World’s leading pharma and beauty retailer, Boots Company, has signed a Bharti-Wal-Mart type agreement with Reliance Retail (RRL) to enter India’s health and wellness market. The two have decided to get into an equal joint venture for wholesale business and plan to operate front-end stores through a franchisee agreement.

The front-end stores may be launched under the Boots brand. The deal may also see Boots and Reliance launch pharmacies, high-street health & beauty destination stores and healthcare centres.

ET first reported the discussions between the two partners on December 5, 2007. Private equity giant KKR-controlled UK major Boots is now called Alliance Boots, following its merger with Alliance UniChem.

The deal with RRL marks Boots’ return to India after it exited a joint venture with Nicholas Piramal, following the worldwide sale of its OTC medicines business to Reckitt Benckiser in 2005.

RRL has gone for the dual model, joint venture in the back-end and franchisee in the front-end, as it was the only option wherein the foreign partner could have shown commitment through investments, sources added. Globally, Boots sells thousands of beauty and healthcare products under its own label. It also houses a host of brands owned by other companies.

However, in India, Boots could not have invested in the proposed front-end company which will sell directly to consumers, the way Marks & Spencer has done with RRL. The reason is that Boots sells multiple brands and Indian laws don’t allow foreign direct investment (FDI) in direct-to-consumer retail companies that sell more than one brand.

It, however, allows such foreign companies to invest in Indian companies that sell products under a single brand. Marks & Spencer sells products under its own label.

The other option for Boots was to get only into a franchisee agreement with RRL, but it seems the Indian company was not in favour of this model.

Being a new player in the tricky business of retail, it first wants to learn from the foreign partner the expertise and technical know-how of running a successful retail company. Further, Reliance felt that it required the backing of a strong brand and its experience in a specialised vertical like beauty and healthcare, sources added.

A joint venture in the wholesale business, supplying to the retail outlets, was thought to be necessary as Reliance, like most other new entrants in organised retail, faces maximum hurdles in procuring thousands of stock-keeping units (SKUs) for an expanding network of front-end stores.

Boots, UK’s biggest pharmacy chain, operates around 3,100 dispensing outlets world-wide. Its international operations are spread across Norway, Netherlands, Thailand and Switzerland. In the UK, it also runs health and beauty services across high streets and edge-of-the-city centres.

Interestingly, Boots also has a significant eye-care business, apart from manufacturing and marketing health and consumer products under Boots, No 7 and Soltan brands.

Reliance currently operates a few wellness stores offering pharma, beauty and healthcare products across allopathic, ayurvedic and homeopathic streams. The stores also have OTC health foods, self-help medical and fitness equipment in its portfolio. The wellness vertical at Reliance Retail is spearheaded by Ninu Khanna, who also looks after the company’s FMCG business.

Alliance Boots was formed through the merger of Boots Company with Alliance UniChem. However, a private equity consortium, led by KKR, acquired Alliance Boots earlier this year for around $22 billion. It was the first FTSE 100 Index company to be acquired by a private equity fund.

August 6, 2008
Source: Economic Times

Ferragamo, Piquadro set for an entry

The Netherlands-based Ferragamo International B V (FIBV) and Italian designer leather goods brand Piquadro are all set to make an entry into India to tap the country’s $3.5 billion premium lifestyle market. Both the international brands are expected to take the single-brand retailing route to expand their footprints in the country.

The two designer brands have received foreign direct investment (FDI) clearance from the Foreign Investment Promotion Board (FIPB).

Media reports had earlier said that Ferragamo was pursuing a joint venture (JV) with real estate major DLF Ltd’s subsidiary Nelia Retail Pvt Ltd. However, details about Piquadro’s Indian JV partner could not be ascertained as the company’s chairman and CEO Marco Palmieri could not be reached for comments. DLF officials were also not available for comments.

Ferragamo will be investing Rs 30 crore and Piquadro Rs 1.53 crore for buying a 51% stake each in their respective Indian JV companies.

Ferragamo will set up Salvatore Ferragamo stores in DLF’s luxury retail malls that are coming up across the country. These stores will retail Salvatore Ferragamo brand of premium clothing and accessories. The Gurgaon store will be launched at the DLF Emporio mall, which is under construction.

Ferragamo currently has one store in Mumbai. The company is said to be planning five new stores in Delhi, Bangalore and Mumbai.

Piquadro operates its retail chain in 50 countries. Its leather product range includes professional bags and briefcases for men and women, travel items, planners, portfolios, small sundry items and a wide array of accessories.

August 8, 2008
Source: DNA

Indian retail sector fails consumer-friendly test

Despite global brands flooding retail chains across India and domestic players going an extra mile to woo consumers, the Indian retail sector is yet to provide its clients the complete retail experience. In what may come as a revelation to store designers, the otherwise untiring women shoppers are possibly not spending enough time and money during their visit to these outlets.

Crammed outlets, unpleasant mannequins and even lack of seating arrangement to make their husbands comfortable as they go about apparel bingeing are hampering the great Indian retail story, thanks to the unpleasant retail experience, points out a survey by the apparel design and merchandising department of National Institute of Design (NID).

Well, when it comes to being consumer-friendly, retail stores in our country have still have a long way to go. Even some of the leading retail stores fail to take into account customers’ preferences, mainly as they are yet to get down to the concept of ‘retail designing’.

While this is true for almost all major retail stores in the country, some ethnic wear stores surveyed by the final year NID students of the apparel design and merchandising department in the three cities of Ahmedabad, Mumbai and Pune had this to reveal.

The survey concludes that retail stores face huge gaps in modern retail design approach, ranging from the selection of location to services offered to the customers.

Based on consumer feedback , the survey also highlights aspects that retail stores should consider in order to increase footfalls and enhance consumers’ shopping experience.

On parameters ranging from accessibility, location, window display, facade, staff, packaging, decorative & props, ambience and interiors, retail stores-and in this particular case, exclusive branded stores for ethnic wear-do not consider the likes and dislikes of their target consumers.

“Retail stores are yet to understand the value of retail design and are oblivious of the consumer-centric atmosphere. Retail design doesn’t only include interiors but factors like where the store is located, which very much determines consumers’ attraction to the store,” said NID faculty member Somesh Singh under whose supervision the research was carried out.

August 9, 2008
Source: Economic Times

Vornado Realty Trust and Reliance Industries Ltd, India’s largest public company, are teaming up to build and operate shopping centres in India, the US real estate investment trust said on Wednesday.

Each company has agreed to contribute up to $250 million to the 50-50 joint venture that will build large shopping centres, some surpassing 1 million square feet, and be anchored by hypermarkets that Reliance will own and operate

August 14, 2008

Source: Mint

Spencer to introduce Ladybird

Spencer’s, the Rs 800-crore retail arm of the RPG Group, is set to roll out the international Ladybird range of children’s wear, owned by the British high-street retail chain Woolworths in India in the next two weeks.

Spencer’s has entered into a tie-up with the $6-billion UK retailer Woolworths to exclusively sell its select products through its nation-wide chain in the country. The Indian retailer has a slew of private labels in the garment segment that include Island Monks and Mark Nicolas in the men’s and women casual/formal wear, Puddles for infants and Little Devils for kids below 14 years.

“We expect to have the Ladybird range of kids’ wear in our outlets in the next ten to 15 days,” Mr Harsh Goenka, Chairman of the RPG Group, told Business Line. This is part of Spencer’s move to increase focus on the apparel segment, which is domestically growing at a brisk pace.

Spencer’s has also tied up with Woolworths for exclusive distribution rights of the UK retailer’s international toy brand, Chad Valley. Initially, the company will be displaying Chad Valley toys in its hyper stores and in the next two months, the essential range would be available at the convenience stores.

Mr Goenka said the company has recently tied up with the US bakery café, Au Bon Pain, to unroll a chain of standalone outlets in the country. “This will be introduced by the end of this year,” he said.

Spencer’s has formed a joint venture called Novel Confectioners, which will be the master franchiser of Au Bon Pain (which means the place of good bread) in India. The Boston-based casual dining and bakery chain has more than 225 outlets fanned out across the US, South Korea, Taiwan and Thailand. The joint venture will set up 100 stores in the next 18-24 months with an outlay of Rs 50 crore, the first being planned in Bangalore over a 2,000- sq ft area by December this year. The stores will serve an assortment of breakfast and lunches such as soups, stews, sandwiches, sales, bread & bakery items, confectionaries and beverages.

Spencer’s currently has 400 stores across India with a total retail space of 14.27 lakh sq ft. It plans to increase the number of stores to 1,000 with a total retail space of 30- lakh sq ft by the end of the current fiscal, involving an investment of Rs 1,500 crore.

A company official said the focus would be more on large format stores. “Currently, we have 15 hyper stores and 12 supers, which are to go up to 45 and 30 respectively by the end of this fiscal. In terms of turnover, we are currently at Rs 800 crore and planning to touch the Rs 2,000-crore mark by this fiscal,” he said

Spencer’s will be sharpening its focus on private labels this year. In the private label programme, the retailer sources directly from the manufacturers and sells through its stores, which enables him to offer the products at lower price points. “We plan to increase the share of private label contribution from 25 per cent to 40 per cent in the next two years,” the official said.

August 5, 2008
Source: Hindu Business Line

Inflation a blessing in diguise for retailers

Everyone loves a good discount. And it comes in as an incentive especially during times of inflation. For apparel discount retailers, inflation has proved to be a blessing. Arvind's branded discount retail chain Megamart has seen an improvement in walk-ins of 15% in the past few weeks.

"During inflation, customers always prefer to shop in a value retail outlet," says KE Venkatachalapathy, business head of Megamart. The increased footfall is reflecting in the sales figure of Megamart as well. While he refuses to divulge exact numbers, Venkatachalapathy says there has been a 20% increase in sales compared to the corresponding period last year. Discounts here vary from 10% to 30%.

"Inflation and discount retailing are directly proportional. Customers normally tend to flock to value retail stores where they are assured of good quality at reasonable prices," says Raghunath Narayanan, MD of Chennai discount retailer Europa.

Discount retailing, a post World War II phenomenon, is an established market practice in countries like the US. This concept is now picking in India, which is a price sensitive market. Discounts have always worked well with apparel and factory outlets in the suburbs of many Indian cities and shopping hubs like Fashion Street in Mumbai and Marathalli in Bangalore which acquired sobriquets as an export market bear testimony to this. Now inflation has come to the aid of retail majors.

The Loot, a discount chain, has seen footfalls increase by at least 10% in the last few weeks across its 35 stores in 15 cities. "In Mumbai alone, our footfalls are up by 17% in the last three weeks. In the first quarter, we had sales of Rs 15 crore. In the next quarter , we expect this to climb upto Rs 25 crore," says Jay Gupta, MD of The Loot.

In apparel, children's wear seem to be the biggest beneficiary. "As children, especially toddlers, normally outgrow their clothes pretty fast, parents are flocking to discount stores such as ours more than ever before," says Narayanan. While the discount offered by the apparel and luggage chain is between 25 and 30%, in kids wear it's 30%- 40%.

The consumer base is also widening. "From a largely middle class audience, I now see people getting out of cars like Honda Accord and Mercedes Benz outside our stores," says Gupta.

The rush to such outlets is also due to the fact that regular apparel retailers and multi-brand outlets mostly offer off season sale only twice in a year. "But in times of inflation and continued price rise, the consumer is looking to cut spends across categories on a daily basis," says Venkatachalapathy.

Brand Factory too has seen a 5%-7 % increase in our sales over the past few months. "While we cannot say that entirely due to inflation, we cannot rule out that it has played a role," says Vishnu Prasad, CEO of Brand Factory.

July 31, 2008
Source: Economic Times

Subhiksha to appeal against FDA decision

Subhiksha Retail said on Wednesday it would appeal in the Bombay high court against the decision of the Maharashtra Food and Drug Administration (FDA) to suspend the company’s warehouse licence in the state. “The order is totally illegal and has been framed due to vested interests of our business rivals and we are in consultation with our lawyers for filing an appeal in the high court,” managing director R. Subrananium said.

Maharashtra FDA had earlier in the day suspended the retail chain’s licence in the state over hygiene issues at its warehouses.

source: Mint

14 Aug 2008

Supply of Space

A report by international property consultants Cushman & Wakefield points to a paradoxical situation. There is demand for retail space in malls across major cities but nearly a fifth of the space lies vacant. The rentals, though, are stable and holding in specific markets. Despite major mall projects, the supply of space is likely to be low over the next two years as projects are being delayed due to various reasons.

The second quarter of 2008 saw the launch of just about a third of the planned launches in major cities. There was a supply of over 2 million sq.ft of mall space in major urban centres against a planned launch of 6 million sq.ft.

Most of the space during the second quarter has been created in the NCR, Mumbai and Kolkata, with nothing happening in Chennai, Hyderabad and Pune. The second and third quarters could see the supply of over 12 million sq.ft, according to a report by Cushman & Wakefield. The report, quoting Mr Rajneesh Mahajan, Director, Retail Services, Cushman & Wakefield, says that despite the low supply, nearly a fifth of the 40 million sq.ft of mall space is vacant. This is primarily because the businesses are targeting the same catchments resulting in oversupply within local markets. The focus is essentially on premium high streets.

Increasing input costs and global cash crunch have resulted in developers rescheduling project completion. New projects are also being held back in most cities in this quarter.

While quite a few planned mall projects are not likely to hit the market during the next year or two, the pressure for space on existing and emerging high streets will support rentals in prime high streets and prominent mall developments, according to the report.

In the next quarter Bangalore could see the supply of over 5.45 lakh sq.ft of mall space.

There is a pressure for space on the existing and emerging high streets in the city, which will continue to support the rents. Mall rentals have largely been stable across the markets, though some the traditional areas such as Commercial Street and Brigade have witnessed a 10 per cent appreciation in rents.

Mall rentals in Chennai are likely to strengthen because of poor supply. Major malls like Ampa and Coramandal which were to enter the market this year are more likely to start operations next year. Some of the planned mall space is likely to start in 2010. There is a clear dearth of quality real-estate solution to cater to the retailers' needs. "The prime cause for most of these delays is the hold on approvals coupled with construction delays. Indi mall, with approximately 170,000 sq.ft on Nelson Manickam Road, is the only mall expected to be operational during Q3 this year," says the report.

Hyderabad has not seen fresh supply of mall space during the second quarter. Rentals in select established main streets stabilised at the first quarter levels due to near-saturation in retail real-estate activity and absence of significant transactions. Most of the addition to the mall space has happened in the West and the North with Ahmedabad witnessing the launch of 3.50 lakh sq.ft mall on SG Highway. Retail development is happening actively on the western part of the city.

In Kolkata there has been a 50 per cent escalation in mall rentals over the last quarter at Rajarhat because of the lower price points vis-a-vis other areas and the potential development in the residential and commercial space in the vicinity. More than three-fourths of the addition to mall space is anticipated in Rajarhat. Over 3.70 lakh sq.ft of mall space has been added during the second quarter, the report said.

Mumbai will see the addition of 1.7 million sq.ft of mall space over the next six months across central suburban markets and Navi Mumbai.

Over 5.6 lakh sq.ft of mall space was added during the second quarter, when rentals remained stable with no change over the first quarter. In the NCR, mall space was primarily added in Faridabad and Gurgaon during the quarter when over 6.25 lakh sq.ft space was added. Mall and main street rentals have increased by over 24 per cent compared to the first quarter.

Mall space
(sq.ft)
City	Estimated supply in 2008
Ahmedabad	570,000
Bangalore	813,000
Chennai	170,000
Hyderabad	700,000
Kolkata	2,975,000
Mumbai	3,870,000
NCR	7,375,000
Pune	300,000
(Source: Cushman & Wakefield)

August 3, 2008
Source: Hindu Business Line