Retail Spaces:
Retailers hold back even as retail rentals dip
Linking road is India’s most expensive retail destination
Retailers and mall developers hold talks

Kishore Biyani is aiming to build a Rs 10,000-crore business of brands by 2012. The strategy revolves around creating in-house brands in various segments like electronics, fast-moving consumer goods, sports, household items and apparel. The aim is to be amongst the top three selling brands in the respective categories within Future Group. Collectively the brands will account for 30% of group revenues. Pantaloon Retail is already selling some of their own brands including John Miller and Bare in apparels, Koryo in electronics, Dreamline for kitchen items and furniture, and Tasty Bite for food items. Biyani is relying on cricketers like Sachin Tendulkar and Mahendra Singh Dhoni, and film star Hema Malini to promote some brands. To build these brands, Biyani has been hiring senior managers from the biggest marketing firms. From Hindustan Unilever , he’s pulled in S. Ravindranath, Sadashiv Nayak and Damodar Mall. He hired Santosh Desai, former honcho from advertising agency McCann Erickson, and Shashi Kalathi is a former head of marketing from PepsiCo. Future Group is hoping this move will improve the profitability of the group. Margins from in-house brands will be higher by 10% (on an average).

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CARREFOUR'S INDIA RETAIL PLAN DELAYED

Carrefour SA, the world’s second-largest retailer, will take at least a year to tie up with an Indian partner to start retail operations in the country as prospective partners grapple with the ongoing financial crunch and slowing sales. Carrefour is in talks with more than six Indian companies that include diversified business groups, retailers and mall owners to find a retail partner, the company had said earlier. A key reason for the delay in managing a tie up is the retailers’ tough bargaining stance. In the meantime the French retailer is preparing to launch its cash & carry (wholesale) operations next year. The company will be setting up cash & carry outlets under the brand ‘Carrefour’.

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Metro is being wooed by the Punjab Govt. In recent talks the company has asked that they be given license exemption for holding land over and above the land ceiling limit, exemption from the APMC Act so that their distribution centers can be treated as open stock yards (which enables them to get exemption from market taxes). They also demanded wholesale liquor licenses for imported liquor and wines; an early clearance of their project under the single- window clearance scheme; and, change in land use be expedited. The project will be coming up for final approval before the Empowered Committee next month. Metro Cash & Carry will be launching its operations in Punjab on January 15, when a ground-breaking ceremony will be held at Zirakpur. The company proposes to invest Rs 900 crore for setting up its operations across four districts in the state. The company proposes to set up two distribution centers at Ludhiana and one each at Mohali, Zirakpur, Jalandhar and Amritsar. Each of these centers will come up on an area of 8 acres and will become operational by 2010. The company has already purchased two sites in Ludhiana and one in Amritsar, for setting up these distribution centers. Metro is actively looking at Punjab not only to set up its retail business but also as a major sourcing hub for their centers across India. The Metro Group already has a sourcing company based in Delhi, Metro Group Buying, which does its export-based sourcing. Metro, which has over 600 centers in 29 countries, has already set up stores in Kolkata, Bangalore, Hyderabad and Mumbai.

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FUTURE BRANDS SEES OPPORTUNITY IN SLOWDOWN

Future Brands is making investments in brand building now because competitive activity is low and they believe that brands last longer than a business cycle. The company is entering new categories and launching brands in sportswear, lingerie, beauty and skincare products and also activating some of their older labels in FMCG and home categories. The logic is that in recessionary times, a new brand faces less competition in terms of money-spends than in boom time. Also during tough times, fundamentals sell more than the fluff. Brands which have a strong proposition therefore have a higher chance of success

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RETAIL SEEKS INDUSTRY STATUS

The Retailers Association of India (RAI) has demanded that the sector should be given industry status and attached to either the ministry of consumer affairs or ministry of commerce and industry. According to RAI, the industry status will provide better funding options, clear policy decisions and speedy and single window clearance for various licenses and permits. Presently retailers have to move from one department to another for issuance of various licenses and permits. The association has made recommendations to the Union government, demanding constitution of an ‘empowered committee’ with representation from the sector and the government to look into ways to meet the requirements of the sector. Further, RAI has asked to appoint a secretary-level official to monitor and guide the retailing activities of each state.

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FUTURE GROUP READY TO DROP PRICES

The Union Government has announced a 4 % cut in Cenvat (central value added tax) with the expectation of companies passing on the benefit to consumers in order to stimulate demand in the economy. In response to this move the Future Group has said it will cut prices of private labels across all product categories. This is counter to the stand taken by Hindustan Lever, Marico and other FMCG companies’ that are holding prices for the moment. Earlier the Future group had passed on reduction in prices of utensils, plasticware, and synthetic textiles after the sharp drop in prices of raw material inputs like metals, chemicals, and crude oil among others. Prices of metals such as steel and copper have gone down by 30-40 % and prices of crude oil-based plastics like Ethylenes and Polypropylenes have dropped by as much as 70 % in the last quarter.

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TITAN GOING AHEAD WITH ACCESSORIES BUSINESS

Shareholders of Titan Industries have given their nod through a postal ballot for the company’s proposed entry into personal accessories business as well as property development/real estate at Hosur. The nod will enable the company to amend its Memorandum of Association and Articles of Association to facilitate the new business streams. As a part of its decision to enter the personal accessory space, Titan Industries has proposed to manufacture retail and distribute a wide variety of accessories like apparel, bags, belts, caps, fragrances, wallets and the like. The company has also indicated that the decision to enter real estate development was needed post the merger of its arm-Titan Properties with the parent (Titan Industries). These projects would be incidental to Company’s main businesses and would be self-financing.

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The Taj Mahal Palace and Tower and the Oberoi Trident in Mumbai may have been devastated by the terrorists, but the international luxury brands which have their signature stores in the two hotels say they will stay put where they were before the attacks. Many of the stores suffered extensive damage in the almost three-day long assault on the hotels. Potential business would be lost while the rebuilding activity is on, but the stores are unfazed. Stores of brands such as Louis Vuitton, Fendi and Bvlgari closed before the attack began. But frequent explosions left their stores wrecked.

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RELIANCE RETAIL, PEARLE EUROPE OPENS FIRST OPTICAL OUTLET

Vision Express, the 50:50 joint venture between Reliance Retail and Pearle Europe has opened its first optical specialty format in Bangalore. In India, Vision Express would compete with other prominent organized eyewear retailers such as Titan Eye+ and GKB Opticals. Unlike these two retailers though, all the products offered will be only under the Vision Express brand. Besides free standing stores Vision Express will have a shop-in-shop presence in other retail formats of Reliance Retail, such as Reliance Mart, Reliance Wellness and Timeout. It could also look at having shop-in-shop presence in other multi-branded outlets. Globally, the Pearle Europe group operates 2,200 stores across 22 countries. In most countries they have entered through acquisition or franchisee route. However, in India, they have entered through a JV.

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FUTURE GROUP PLANS EXPANSION IN EAST

Undisturbed by the slowdown, Future Group is planning to add 6 lac square feet in East India over the next one year. The group will launch eight new stores of Big Bazaar and Pantaloons combined and one of Home Town. The proposed Big Bazaar stores will cover some 4 lac sq ft, the Pantaloons outlets over 50,000 sq ft and the Home Town outlet at Rajarhat over 1.5 lac sq ft. The company is planning to enter new markets like Tinsukia, Jamshedpur, Patna and Deogargh. Typically, the group enters a new market with the Big Bazaar format and then evaluates other options. Future Group is also in the process of converting some of its less profitable stores into newer ones. It has already done so with two outlets — a Fashion Station outlet in Kolkata and one Food Bazaar store in Salkia have been converted to Big Bazaar outlets. The group has also started re-negotiation with property developers for change in rent terms for existing stores and the newer ones. Future Group operates around 1.5 million sq ft in the East, of which Big Bazaar constitutes 10 lac sq ft and Pantaloons some 3.5 lac sq ft.

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Subway Systems India Pvt. Ltd.
Area Manager
Delhi
For more info. Click Here

Max (Landmark Gulf Group)
Senior Ladieswear Designer
Dubai
For more info. Click Here

Jawad Business Group
Store Manager
Dubai/Abu Dhabi/Bahrain
For more info. Click Here

Max (Landmark Gulf Group)
Senior Kidswear Designer
Dubai
For more info. Click Here

RA online retail dictionary can be viewed on our website www.retailangle.com. The RA dictionary is designed to be a dynamic document. Readers may send in both, contributions to the dictionary, and queries for words that have not been included yet.

Footfall
The number of people walking into a store

Conversion
The number of people who buy from among those who walk into a store e.g if a 100 people walk into a store and only 50 buy, the conversion is 50. The conversion percentage for the same will be 50%.

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Two more concepts relevant to your understanding of the customer are the ‘SHOPPING MISSION’ and ‘PURCHASE DRIVERS’. These are defined, as with everything else about the customer, using a mixture common sense and analysis and are the starting points for determining the hierarchical structure of performance data, for planning and buying ranges and for planning the layout of an outlet and. In addition the process of defining what the Shopping Missions and Purchase Drivers are will often reveal issues and opportunities with the current ranges as well as possible range developments.

5.2.4 THE SHOPPING MISSION

A shopping mission is the general or specific purchase objective a customer has in mind when they visit an outlet which can be very general, for instance, ‘I want to buy some clothes’ or very specific, for instance, ‘I want to buy the latest Madonna CD’. We aren’t including general browsing here – the intent of a Shopping Mission is to actually buy something.

The shopping mission influences which retailers a customer will visit since they will only go to those that are specific to their mission and which meet some other pre-determined criteria such as affordability, convenience or choice. They are not likely to visit a furniture retailer to buy clothing, for example, or to visit a high price designer store if they are on a tight budget.

Once they are in an outlet the shopping mission will determine how the customer will shop it. The more general the mission the more likely they are to browse before buying rather than heading straight to a specific department looking for a particular product.

A retailer’s job is to ensure that each shopping mission that a customer is likely to have when they visit one of their outlets can be successfully completed as quickly and as easily as possible. This means that the outlet should be easy to navigate with clear groupings of complimentary products. Each product range should be wide enough to give the customer a reasonable chance of buying the product they are looking for and should be displayed and should be organised in a way that makes selection simple and intuitive.

To read the complete article click here...

© Keith Dunn 2007 All Rights Reserved. Not to be reproduced without permission. The articles in this series are extracted from Keith Dunn’s The Principles of Merchandise Planning and Management, the definitive planning manual for buying and merchandising professionals and the basis for the Avatar training programs used by retailers including Tesco, the Cooperative Group, Bananama (Russia) and Faith Shoes. For earlier chapters visit our website www.retailangle.com

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1) Are high rents impacting the expansion plans of luxury brands?

Yes, luxury brands are feeling the tough times. High rents had in any case been the primary concern of luxury brands in India that had already been putting a spanner in the works for their expansion. Whilst luxury brands can typically afford to pay higher rents because of the pricing of their products and also business turnover, they are not achieving such results in India. India is still an immature luxury retail market that is more geared towards practical goods rather than a complete brand mix portfolio. Therefore, their performance in India is below the international benchmark.

Globally the cost of real estate is typically 8-10% or at the maximum 15% of the total cost incurred in running a store. However in India with the rates being quoted that go as high as $25 per sq.ft., the percentage of real estate cost turns out be as high as 40% in some cases. Luxury retail requires very high initial investment, due to factors such as standardised fit out procedures with all workers and construction material imported form the parent country, high import duties etc. Also the gestation period to break even in this business is very long as far as 5-7 years. Coupled with these factors high rent is gradually acting as a deterrent in expansion for many of these brands within the three major metros.

It is early years yet for luxury retail in India and international brands are willing to spend more time in stabilization. However, most have come in via the franchisee route, which does not have much sustaining power in terms of long periods. Many franchisees are not willing to invest in such waiting periods.

To read the complete article click here...

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ARVIND DEMERGES APPAREL AND RETAIL

Arvind Ltd has announced a demerger of its branded apparel business and the retail business (under the MegaMart banner) into wholly owned subsidiaries with effect from April 1, 2009. The branded apparel business which markets apparels and accessories under the brands Arrow, Flying Machine, Newport, Excalibur and yet to be launched brands like Izod, USPA, Pierre Cardin, Sansabelt, Hart Schnaffner Marx will be demerged into Arvind Lifestyle Brands. Retail business under the MegaMart banner operating about 150 stores across the country along with the license for world's largest value brand Cherokee will be demerged into Arvind Retail. The purpose of the demerger is to bring financial focus on these entities and look at possible alternatives for fund raising in these vehicles at an appropriate time in the future.

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RETAILERS HOLD BACK EVEN AS RETAIL RENTALS DIP

Rentals for retailers have dropped by as much as 40 % in key cities across the country. While the fall Tier-I and metropolitan cities is in the range of 15- 20%, in smaller towns it is higher at 30 – 40%. However, retailers are still holding back in anticipation of a further fall in rents. In the meantime they are aggressively re-negotiating the current lease arrangements. MedPlus, which has 600 pharmacy stores in Hyderabad, Bangalore, Chennai and few other cities is negotiating for a reduction in rent, as is Future Group, Madura Garments and Arvind Brands. Most retailers are negotiating with mall owners for a lower rent or shifting to a revenue-sharing model. Revenue-sharing gives mall owners the flexibility to earn more as the retailer’s turnover increases over time. Wherever mall owners or landlords have failed to negotiate, retailers have shut shop or moved to another location. Subhiksha for instance is reported to have closed around 90 grocery stores in the last one month or so, while ITC has is reported to have closed approx. 50 John Player exclusive outlets.

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LINKING ROAD IS INDIA’S MOST EXPENSIVE RETAIL DESTINATION

According to its '23rd annual Main Streets Across the World' report, Cushman & Wakefield has said that Linking Road is the most expensive retail high street location in India and the fifth most expensive location in Asia. Linking Road extends from Bandra to Santa Cruz, with the highest rents for the Bandra part of Linking Road. Though retail rentals on Linking Road had gone down almost 20 % in the third quarter, but are still much higher than Breach Candy and Colaba Causeway. Rentals at Linking Road stood at Rs 1,080 per sq ft, compared with Rs 760 per sq ft at Breach Candy and Rs 850 per sq ft at Colaba Causeway in the months of September-October. The substantial increase in main street rents was driven by demand from existing retailers upgrading and expanding their space to create ‘flagship’ stores’. Demand was further buoyed by the entry of new international and domestic retailers.

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RETAILERS AND MALL DEVELOPERS HOLD TALKS

Over 100 top officials of big mall developers, retail companies and multiplexes held a meeting in Mumbai to dialogue with a view to handling the current crisis. The closed-door meeting was attended by Kishore Biyani, chief executive officer of Future Group, Ajit Joshi, chief executive officer of Infiniti Retail, RA Shah of Trent, Cinemax director Hiral Kanakia, Oberoi Constructions managing director Vikas Oberoi, Nirmal Lifestyle chairman Dharmesh Jain, Ishanya president and chief executive officer I S Narula, and Entertainment World Developers managing director Manish Kalani amongst others. The main point of discussion was to have a lease rental system in place till retail chain stores achieve breakeven. Taking a cue from international practices, retail firms said they were ready to share a part of their revenues with mall developers in lieu of high lease rentals. Besides revenue sharing, the meeting also discussed collaborative efforts, common-area maintenance charges, mall management, ways to increase footfalls and bringing in transparency in real estate transactions. On the revenue sharing proposal, the retail companies offered to pay the mall owners a minimal rental along with a negotiable share of around 5 percent of the revenues in the initial years. Eventually, when the stores break even the developer and the retail company will negotiate a fixed rental. This, however, did not get a favorable response from the mall developers. Both sides agreed to meet frequently to raise issues and understand each other’s problems.

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EWDPL TO BUY OUT CASH STRAPPED MALL PROJECTS

Entertainment World Development (EWDPL), a real estate developer, has said that it plans to acquire malls from cash-strapped builders who are unlikely to finish their projects. As many as 60 % of the projects embarked upon by small developers are expected to be stuck as retailers cut back on their expansion plans, stock markets tumble and banks curb lending to real estate projects. As these developers go in for distress sale of assets, it provides a great opportunity for EWDPL which has recently raised Rs 1,300 crore from a German real estate fund, MPC Synergy, by selling equity in the range of 10 to 49 % in 21 projects. EWDPL has focused on the tier-II and tier-III cities and expects to open malls in Indore, Nanded, and Raipur by the end of this financial year. In February this year, Phoneix Mills, which is also in the business of retail space development, bought a 42 % stake in EWDPL for Rs 1250 crore.

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DABUR RETAIL CEO PUTS IN HIS PAPERS

Dabur India has deferred plans of setting up 350 health and beauty stores. Peter Baker, the CEO of Dabur’s retail arm H&B Stores, has quit as the company has scaled down its investment plan. In the absence of a CEO, the day-to-day operations of the retail venture are being overseen by H&B Stores’ management committee. This committee comprises six senior executives, who earlier reported to Mr. Baker. Dabur had roped in Mr. Baker, an expatriate, from the Lee Cooper group, where he helmed the retail business. As of now, about 7-8 NewU stores are operating in Delhi, Faridabad, Bangalore and Hyderabad. During financial year 2007-08, H&B Stores posted a loss of Rs 7.63 crore.

PETER BAKER JOINS FUTURE GROUP

Peter Baker, erstwhile CEO of the Health and Beauty vertical of the Dabur group, has joined the health and wellness business of Future Group. His portfolio as also his date of joining has not yet been finalized. Mr. Baker was reported to have put in his papers recently as Dabur put a freeze on its retail expansion plan.

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MOBILE RETAILERS CONTINUE TO HIRE

Mobile retailers say that the economic slowdown has not had any significant impact on demand for mobile services. While Future Axiom, a 50:50 joint venture between Future Group and the Axiom Telecom, plans to take on board over 4,000 people to support its expansion plans by December 2009, the Essar Group-owned The Mobile Store has hired 1,500 fresh graduates in three months as they have been on an expansion spree. Future Axion plans include tripling its number of outlets to 1,500 by December 2009, apart from getting into innovative value-added services like setting up authorized mobile service centers and providing content on mobiles. As retailers expand the demand for store level people is expected to sustain.

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RELIANCE RETAIL TO IMPLEMENT LAY OFF IN SELECT DEPARTMENTS

Unconfirmed reports about retrenchment at Reliance are again doing the rounds. This time it is being said that around 900 workers employed directly and indirectly with Reliance Retail are to get pink slips. The retrenchment will be restricted to employees working in its land acquisition and statutory clearance teams across the country. According to informed sources, around half the employees slated to lose their jobs are on the company rolls while the balance are with outsourced agencies providing support services. The disbanding of the teams appears to indicate that the company does not plan any major land acquisitions in the near future. Unlike its peers, which acquire land through external agencies, Reliance retail had set up a dedicated internal team for the purpose. However, most organized retail companies have begun downsizing to cut costs and pruning employee strengths across several verticals.

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VISHAL RETAIL OPENS 11 STORES IN 15 DAYS

Vishal Retail has opened 11 stores, mostly in tier-II cities, in the past fortnight. The chain has opened stores at various places in Indore, Lucknow, Maharashtra, Orissa, Himachal Pradesh and Delhi. Most of the newly opened stores operate on the franchise model. The properties were booked well in advance and stores were opened as soon as they were ready. The stores came up simultaneously because the properties were signed one after another.

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RELIANCE RETAIL LAUNCHES HOME FURNISHINGS

Reliance Retail opened its first 'Reliance Living Furnishings' store in Noida (Uttar Pradesh) and has plans to follow it up with stores in Delhi and in Hyderabad. The home furnishing format is the 14th specialized segment launched by Reliance Retail, which operates 800 stores across 60 cities. The company has started with 120 products under three private labels, including 'Home One' (basic), 'My Home' (mid-segment) and 'My Home Premium' (Lifestyle). The company's offering includes bed, bath, curtains, floor coverings, table and kitchen linen and décor. 80 % of this would be under the company's own labels.

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RURAL RETAIL CHAINS DOING WELL

A good crop and high support prices has put liquidity in the hands of rural India. As a result rural retail chains like Hariyali Kisaan Bazaar and Aadhar Retailing are registering a healthy growth. This is in sharp contrast to urban retail chains that are facing a decline in sales, as a result of the liquidity crisis and fears of job loss. The Rs 65,000-crore farm loan waiver has also improved the liquidity situation in rural areas. Rural retailers say they have had a good Diwali and that sales volumes are up at least 20-30 %. The kharif season has been good and the outlook for rabi season is positive as well.

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SPENCER’S CLOSES 56 STORES

Spencer’s Retail has closed 56 non performing stores in the last 3 months and has lowered its revenue target for this financial year to Rs 1,500 crore from the earlier Rs 1,800 crore. The company currently has 400 stores including 32 large format stores and plans to add another 300 stores in the next two year. However, in view of the high rental costs, the company has been trying to renegotiate agreements with various developers. It has also shelved its plans to go public in view of the prevailing depressed public mood.

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OFFICE1SUPERSTORE LAUNCH STALLED

Indo Rama Retail Holdings’, the master franchisee of the American firm Office1Superstore has stalled its plans to roll Stationary outlets across the country. In July this year the company had announced plans to open 50 stores by the end of the financial year as part of its bigger target to roll out 200 stores in three years – both company owned and franchisee operated. As per the plans, the stores were planned to occupy a retail space varying between 500 sq ft and 2,000 sq ft. and require an investment between Rs 15,00,000 and Rs 40,00,000. On account of the general economic slowdown, high property prices, and depreciation of the rupee (making imports more expensive), roll out plans have taken a hit.

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MALLS EXPERIENCE SECURITY FEARS

Post the incidents of terrorism in Mumbai on 26/11, there are fears that malls and other crowded places will be the next targets. Employees at Malls are being trained to tackle emergencies and the number of private security personnel has been stepped up. However, industry players are expressing concern over the ineffectiveness of security measures in the face of planned attacks by professional killers and terrorists. At present, most malls are dependent on private security agencies and have installed metal-detectors and video cameras.

SUBHIKSHA, VIVEK’S HOLD EXPANSION PLANS

Subhiksha, a leading South India based retailer, has decided to put off its entry into retail stores for consumer durables owing to the slowdown in demand and an expectation of a further fall in property prices. The company had earlier announced plans to acquire 2 million sq ft across the country on lease for its consumer durables business, with an expected investment of around Rs 800 crore over the next two years. The first of its consumer durables store was planned to open in January 2009. Another South based retailer Vivek’s, which has 54 stores across Tamil Nadu and Karnataka, has also deferred its expansion plans. The company, which runs retail format stores under two brands - Vivek’s and Jainsons - had proposed to add 100 more stores with an estimated investment of Rs 100 crore across four southern states in next two years, but is now adopting a wait and watch policy.

MR. BEAN IS REBRANDED

Mr. Bean Coffee Junctions, the cafe-cum-retail stores from Tata Coffee are being rebranded as Tata Coffee Plantation Fresh. Tata Coffee has handed over the marketing and distribution functions of its instant coffee brands to group company Tata Tea – this includes Mr. Bean and Coorg Pure. The Mr. Bean outlets are a modern, more youthful version of the company’s retail format Coorg Coffee World, where the company sells fresh ground coffee. The company has 35 Coorg Coffee World outlets in the southern states, which will eventually be shut down or converted to Tata Coffee Plantation Fresh, where the company will sell gourmet coffee to the discerning young customer. Tata Coffee cannot experiment with a full-fledged cafe model due to its non-compete clause with Lavazza, which took over Barista, another coffee cafe chain in which Tata Coffee had a 34% stake. The company will open its flagship store in Chennai later this month, after which it is looking at opening outlets in Pondicherry and Goa.

GFA TIES UP WITH SPENCER’S

Global Franchise Architects (GFA),owner and franchiser of speciality retail brands, is looking to increase the number of outlets of its premium ice-cream brand, The Cream & Fudge Factory and its donuts brand, The Donut Baker. GFA has recently tied up with Spencer’s for its brands Pizza Corner and Coffee World. The company currently has a total of 75 stores in India — 53 Pizza Corners, 9 Coffee Worlds, 12 The Donut Bakers and 2 The Cream & Fudge Factories.

RUMORS OF TROUBLE AT SUBHIKSHA DO THE ROUNDS

After reports of distributors and FMCG company stopping supplies to the retail chain on account of payment issues, it is being reported that employees have not been paid their salaries for the last couple of months. Media reports quoting employees and floor level sales force state that salaries have not been credited for the months of October and November across the board, including those at senior levels. Outlets are also said to be wearing a deserted look with only private labels on the shelves. However, the company has disputed the rumors on cash flow problems and have attributed the empty shelves to a SAP implementation. They expect business to be as normal starting January.

COLORPLUS TO LAUNCH MEN’S NIGHTWEAR, BEACHWEAR

ColorPlus will soon launch nightwear, beachwear and undergarments for men. The initial test launch plan is restricted to the key metros. Meanwhile, after a successful test launch, men’s and women’s fashion accessories such as wallets, belts and jewelry, the products will also soon appear in all ColorPlus exclusive showrooms, shop-in-shops and Raymond stores. At present, ColorPlus has 56 exclusive showrooms in the country, seven abroad, 33 shop-in-shops and nearly 50 Raymond stores, apart from a presence in over 200 MBO’s.

ALLEN SOLLY DROPS YOUTH LINE

Allen Solly has dropped its sub-brand Allen Solly-Youth, a year after it was launched. Youth as a branding tool was seen as narrowing the appeal in terms of demographics. Learning from the experience the brand will roll out a new casual line by increasing the offering and moving it from a niche to a broader appeal. The casual line, which will be launched in February 2009, will cater to a larger audience in the casual space. The brand re-jig is Madura Garments’ initial step towards catalyzing the movement of the brand towards a more casual direction. In the past one year, the company has taken several steps to give a more youthful identity to all its brands with the launch of other sub-brands like Louis Philippe’s sub-brand Lp Young, and Van Heusen’s V-Dot.

VF-ARVIND STALLS FURTHER ROLLOUT

VF-Arvind is re-arranging resources to support its key brands, Lee and Wrangler, and may put on hold new introductions and the earlier projected store expansion plans. Media reports say the company is stalling expansion plans of its fully imported brands like Nautica, Kipling and Jansport. Additionally the company is reported to have started handling out pink slips in an attempt at downsizing. The company has confirmed that the rate of growth has been lower than originally anticipated and some rationalization of activities has been initiated to align the business size and strategy with the current economic and retail environment. As part of these ongoing changes, the organization has vacated some warehousing locations and centralized these at a new modern facility, is reviewing some retail store locations for continuity and has released some roles in its current organization structure.

TITAN LAUNCHES BRAILLE WATCHES

Titan Industries, the country’s leading watch manufacturer has unveiled Braille watches, specially made for the visually impaired. These watches, crafted with a protective lift-able top cover and raised patterns on the dial make it easier for the visually impaired people to tell time. Titan undertook an extensive research with a group of visually impaired people from all walks of life to understand the various elements that makes the watch user-friendly. The watches come with a special instruction manual in Braille, which has been developed in consultation with the National Association for the Blind.

I think the economic environment will change for the better in
3 months	27% (231)
6 months	30% (255)
1 year	26% (223)
2 years	12% (102)
more than 2 years	5% (44)
All submissions : 855

Its good to see that the Retail Angle readers expect things to start changing soon. 57% feel it could happen in less than 6 months. Another 26% give it a year. My own feeling is that sales should start picking up in summer - however we may be looking at more conservative growth figures for the next year or so.

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TEXTILE COMMITTEE REPORT 2008 : RURAL VS URBAN

A yet-to-be-published report ‘Market for Textiles & Clothing 2008’ brought out by the textiles committee of the government of India indicates that while rural India contributed Rs 89,366 crore to the textile basket by its purchases in 2007 — a growth of 9.5 % over 2006 — urban India spent Rs 79,929 crore on textiles during 2007 compared to Rs 74,011 crore in 2006.

The data collected from a panel of 13,950 sample households across 116 metros, urban, semi-urban areas and 261 rural pockets of the country between January and December 2007 indicates that the per capita consumption of textiles during the year remained 22.41 meters against 21.49 meters in 2006, registering a 4.28 % growth. On an average, Indian consumer purchased and used 0.92 meters more textiles and clothing in 2007 than she did in 2006.

Interestingly, with ready-made trousers catching the fancy of the rustic Indian, demand for trousers went up by 7.53 % in 2007. The total market size of ready-made trousers stood at 314 million pieces in 2007 against 292 million pieces in 2006.

Rural India grabbed 55.73 % market share in the category while the urban male could manage 44.27 %. Trousers made out of man-made and blended fabrics remained more popular with demand share of 73.25 % while cotton had a mere 26.75 % share.

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REPORT: ORGANISED RETAIL GOOD FOR PROGRESS

A study by PricewaterhouseCoopers - ‘The benefits of modern trade to transitional economies’ - finds that the organized sector will pay Rs 400 billion as VAT revenue by 2010 when it becomes 22 % of the total retail industry. At present, the organized sector accounts for 5% of the total retail industry size and contributes Rs 70 billion. On the other hand, the unorganized sector that occupies 95 % of the industry size, contributes only Rs 17 billion and this is going to see only a minimal increase to Rs 18.4 billion by 2010. Since modern retail players are tax compliant and their sales figures outnumber those of the unorganized sector, revenue collections will increase as per the study. Collecting revenue from the unorganized sector is a challenge for authorities as 60 % of them are unregistered dealers. Further, 30 % are small dealers paying VAT under composition scheme at a rate of 1 %. Only the balance 10 % pays full rate.

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WAL-MART NOV. SALES BEAT FORECAST, TARGET FALTERS

Wal-Mart Stores has reported a bigger-than-expected rise in November sales, as price cuts led to record grocery sales and customer traffic improved as gas prices dropped. Fortunes were reversed at smaller discount rival Target Corp, which posted a 10.4 % drop in November same-store sales, as shoppers shunned purchases of clothing and home décor. Wal-Mart has been gaining market share during the U.S. recession as shoppers seek out its low prices on necessities, like food and toiletries and is expected to outperform competitors this holiday season. To ensure its lead the discount retailer is introducing new price cuts every week until Christmas to attract cash-strapped shoppers. Meanwhile, Target has stumbled as its reliance on clothing and home decor to drive strong sales falters. The economic downturn has curbed shoppers' appetite for splurging on its trendy wares. Wal-Mart's November U.S. same store sales rose 3.4 %, excluding fuel.

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USA : RETAIL INDUSTRY LOSES 91,300 JOBS IN NOVEMBER

The U.S. retail industry slashed 91,300 jobs in November, the biggest monthly loss in the sector since April 1956, as merchants close stores and reduce sales help as it faces what may be the weakest holiday season in decades. It also marked the 12th consecutive month of retail job reductions. The dismal job news came a day after retailers — with Wal-Mart a notable exception — reported the weakest month in at least 39 years. Overall, the nation's employers cut 533,000 jobs in November, the most in 34 years, pushing the unemployment rate to a 15-year high of 6.7 percent. The November report showed that motor vehicle and parts dealers suffered the biggest losses, cutting 27,100 jobs. Clothing and accessories stores lost 17,600 jobs, while sporting goods, hobby, book and music stores shed 10,700 jobs. Furniture and home furnishings stores eliminated 9,800 jobs. Electronics and appliance stores lost 6,700 jobs. Stores have dramatically scaled back their holiday hiring plans from a year ago, but the bigger job losses are coming from the series of store closings and liquidations, from Mervyns LLC to Linens 'N Things. Circuit City Stores Inc., the nation's second-largest consumer electronics chain, filed for Chapter 11 bankruptcy protection last month and is cutting thousands of workers but plans to keep operating with a reduced store base.

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USA : SALES START EARLY IN THE SEASON

American retailers, fearing that a shrinking economy and mounting job losses could cost them billions of dollars in the festive season that normally brings in up to 40 % of annual sales, started offering steep discounts on everything from clothes to electronics weeks in advance of Thanksgiving. Discounts in the US market traditionally start on "Black Friday", the day after Thanksgiving. Black Friday has been so named since it is seen as the day when retailers start to make their annual profits, having paid off their costs from sales earlier in the year. This year, retailers who has started discounting earlier in the season opened their doors at midnight on Black Friday, with ‘door buster’ deals as much as 70 % off.

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LUXURY BRANDS: FOCUS ON CORE CUSTOMERS

According to discussions by a panel at the recent Wharton Marketing Conference - 2009 which promises to the most challenging year in more than a generation for luxury items such as high-end apparel and fragrances, is changing marketers’ plans of targeting aspirational 16-year-olds and expanding rapidly into the new money hubs of Russia or the United Arab Emirates. What’s now “in” for marketing luxury in this difficult era is pampering the wealthiest and most loyal customers with everything from monogrammed shirts to personal in-home visits.

Addressing the topic “Targeting the New Luxury Consumer in a Flat World: Identifying Opportunities for Growth in a Global Luxury Market,” the panelists, including top marketers with experience at some of the most storied names in luxury items and apparel — from Gucci and Prada to Tom Ford and L’Oréal , agreed that on account of the economic crisis, Luxury brands were preparing to lose a certain amount of that aspirational customer. The person who would buy a couple pairs of shoes in a year is making other choices but the core for a luxury brand is a customer.

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My best wishes for Retail Angle to scale greater heights and greater waves across the Retail fraternity across the globe. I wish the team the very best on the celebration of the first anniversary … G Balakrishnan

Hi, it is always great to understand about retail market through your initiative. One news to share Mr. Ashok Kumar Ghai ( Ex-AVP-Operations Malls & Commercials ) has taken over new assignment as Director ( facilities ) with DHV India a fully owned subsidiary of DHV . BV Netherland… Naveen gupta

Is the impact of share market on retail proving that the suppliers are more organized and the retailers are not. IN FMCG category all the suppliers are profitable , but most of the retailers ( except the Kirana) have not been profitable . The suppliers manufacturing price is one tenth of the retail price , whereas the retailer margin are hardly 10% to 15%. Shouldn’t all retailers join together and negotiate for better margins for RETAIL. To be successful the profit has to be shared and not just taken by suppliers … Ruby Sury

Hi, Good & useful information. We should have some forum wherein retail ideas can be exchanged They might relate to Property Search, Manpower hiring & training, Good HR practices etc How can we do that? … Bharat Ketkar

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SIMRAN SAYS: A GOOD RECESSION ...

I was taught in management school that every threat is a disguised opportunity . Well, it would seem that chain store retailers have found their pot of gold in the form of private label. In the last two weeks Future Group has announced plans to extend private label in the consumer goods category, Chroma has decided to launch private label in the white goods category and Vishal has decided to take its private label to other retailers. The logic is that product brands are losing strength and value is dominating the purchase decision. Retailer brands – Big Bazaar, Chroma therefore offer the security (quality, consistency) of a branded offer but at prices which are 20 – 25% cheaper (and what’s more they manage this at margins which are almost double of that offered by the brands). That’s a double whammy for brands which are already reeling under the market meltdown. As retail private label nibbles away at their heels, brands are going to have to innovate doubly hard to retain consumer interest. In the whole process the consumer is likely to come out the winner.

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