In this article, we take a look at major retail players. Earlier, India's top retailers largely catered to lifestyle, clothing and apparel needs of the consumers. However currently, grocery stores, speciality stores like Titan and stores to cater to the needs of music and book lovers etc have also started mushrooming at various locations.
Trent Ltd: Trent Limited commenced operations in 1998 with a single store under the brand name 'Westside', which specialized in apparels. Over the years, the company has increased its product offerings and has moved into products like footwear, cosmetics, perfumes, household accessories and gifts, all in the non-food segment. In the food segment, the company, in October 2004, launched its first store – 'Star India Bazaar' – in Ahmedabad. The 50,000 sq ft store provides staple foods, beverages, health and beauty products, vegetables, fruits, dairy products, consumer electronics and household items. In 2005, it acquired Landmark, India's largest book and music retailer. In a recently signed deal, Trent has agreed to anchor 12 malls set up by DLF Universal Ltd across the country, at its Westside, Landmark and Star India Bazaar outlets. This amounts to about 27 locations, totalling to about a million square feet of space.
The company recently came up with a rights issue of 1: 5 to fund its expansion plans (plans to set up 30 new stores), upgradation and expansion of some of the existing stores over the next three years.
Shoppers Stop: Shoppers' Stop is the pioneer of pan-nation one-stop retail outlets. Starting in 1991 with a single store in Mumbai, it has now developed more than 20 stores (total retail space crossed the 1 m mark in the second quarter of FY07). The company has added 1,568,479 sq ft of area during the year taking its total store area to 1,170,548 as on March 2007. The contribution of private labels to sales was 21% in FY07 as against 19% in FY06 and the management is confident of increasing the same to 25% by FY08. The company is a major player in lifestyle retailing segment.
Recently, the company forayed into value retailing business by acquiring 19% shareholding of M/s. HyperCity Retail (India) Ltd., out of the total 51% of the option available to it.
The company has a wholly owned subsidiary – Crossword – a specialty retail chain with over 32 stores spread across the country. This store specialises in books, gift articles and stationery. During the quarter, Crossword opened its first store and 2 'Stop & Go' stores at the Mumbai domestic airport. Further, it forayed into airport retailing through a joint venture with The Nuance Group AG of Switzerland. The company has also made an entry into the entertainment sector by acquiring 45% stake in Timezone Entertainment Pvt. Ltd. The recent moves by the company will widen the offering and de-risk its dependence on the flagship Shoppers' Stop stores.
Pantaloon: Incorporated in 1987, Pantaloon Retail is among the pioneers in chain retailing. It is the largest retailer in the country operating 350 stores across segments in over 40 cities across the country and constituting 5 m square feet of retail space. Starting out with dedicated apparel stores (Pantaloon), the company has stores across the cross-section of the society. The company's business is broadly divided into 2 segments, Lifestyle and Value retailing. On the apparels front it has Pantaloon (31 departmental stores), Central Malls (4 seamless malls as well as its other concepts). These stores can be classified under 'Lifestyle Retailing'. On the general merchandise front it has Big Bazaar (51hypermarkets), Food Bazaar (77 supermarkets) and Fashion Station (5 fashion stores) and other delivery formats. These fall under 'Value Retailing'.
The company's subsidiary Home Solutions Retail (India) Limited, operates Home Town, a large-format home solutions store, 'Collection I', selling home furniture products and 'E-Zone' focused on catering to the consumer electronics segment.
The board has approved setting up of two subsidiaries with an investment of up to Rs 50 m each. One will sell branded consumer goods (associated with cricketer Sachin Tendulkar) and the other for mobile communication equipment. It also plans to increase its retail space to 17 m sq. ft. by FY09 with key thrust on home solutions segment. The management has aggressive growth plans to invest about Rs 40 bn in the next one year to expand its different retail chains as a part of its strategy to touch revenues of Rs 300 bn by FY11.
Titan: Titan is the market leader in the organised watch (37% of FY07 sales) and jewellery (60% of FY07 sales) segments. Watches account for 73% of overall PBIT with the rest being accounted for by the jewellery division. The company also has a presence in the precision engineering segment where it plans to leverage on its engineering expertise (revenues are a part of the watches division). After expanding rapidly in the international markets, Titan has scaled down its presence there and is now focusing on building the export business in a gradual manner (particularly in the Middle East).
Provogue: Provogue (India) Ltd., (PIL) formerly Acme Clothing Pvt. Ltd was incorporated in November 1997, converted in to a public limited company in March 2005. It deals with fabrics, dyestuffs, chemicals and textile machinery. PIL operates in two core industry segments. The first being designing, manufacturing and selling branded ready-made garments and other accessories under the brand 'Provogue'. The second business is export of finished fabrics, dyestuffs, chemicals and textile machinery to several markets in African continent.
Provogue has recently entered branded value retailing through ProMart. The company's subsidiary -Prozone (the retail development and mall management business), have roped in Liberty International, UK (infused Rs2bn for a 25% stake in Prozone) – a global retail developer and mall manager. To capitalise on the current retail boom being witnessed in the economy, Provogue is ramping up its retail presence from 100 stores to 150 by FY08 through Provogue Studios (1,200-1,500sq. ft) and Provogue Mega Stores (6,000-10,000 sq. ft).
RPG Group: RPG Enterprises is one of India's largest business conglomerates, with a turnover of US$ 2.55 bn and assets worth US$ 1.8 billion. Since its inception in1979, RPG Enterprises has been one of the fastest growing groups in India with more than 20 companies operating successfully in 7 business sectors: Retail, IT & Communications, Entertainment, Power, Transmission, Tyres and Life Sciences. In 2001, it established 'Giant' Hypermarket.
Within the retail sector RPG operates supermarket, a hypermarket, a music store and provides travel services. 'Spencer's' retail 125 stores across 25 cities covering a retail trading area of half a m sq ft and an astonishing 3 m customers a month is one of the largest supermarket chain in India. It plans to launch private label in apparels in order to de-risk margins on account of increasing competition. Private labels fetch higher margins compared to branded labels. Music World started its operations in November 1997 with its first store in Chennai. By 2006, the company had grown to 279 outlets pan India, with a presence in 45 cities and commanding a market share of almost 25% in most markets where it is present.
To sum up:
A healthy economic growth, increasing disposable incomes among the middle class, changing consumer tastes and preferences and a young population with a propensity to spend are some of the key factors are driving and will continue to drive growth in the organised retail market in India. Besides this, as the retail services improve, easy financing options and changing consumers' mindset regarding credit will give further fillip to organised retail going forward.