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Mumbai Retailers More Conscious About Security

July 14, 2011 By 1 Comment

Mumbai Retailers More Conscious About Security Arrangements

Mumbai Retailers, In the aftermath of Wednesday’s terror attack in Mumbai,  across the city have become more conscious about the security arrangements in shopping malls which attract thousands of footfalls, particularly during the weekends. While most Mumbai Retailers believe that necessary preventive security measures were already in place, Mumbai police seems to have stationed extra force near several malls.

Nirzar Jain, general manager at Oberoi Mall, Goregoan which houses many Mumbai Retailers, said that despite a strong security systems in efforts are always on to strengthen security at the vicinity of the mall. “All the shops are open and staff attendance is normal. We have been doing evacuation drill almost every month since a long time and now we have a few more policemen as a part of their own security check,” said Jain.

Mumbai Retailers feel secure with elaborate security arrangements

On the security measures at Oberoi Mall, which attracts an average of around 20,000 footfalls on weekdays that reaches around 35,000 during weekends, they have elaborate security personnel who lookout for any suspicious bags and packages.

But the bomb blasts come close on the heels of a discount season planned by leading Mumbai Retailers where they would offer price-offs to offset slowing demand.

Mumbai Retailers

India’s largest retailer and one of Mumbai Retailers Future Group doesn’t sense any impact on sales. “Consumers find malls more secured than most other places including crowded high streets. So I don’t see any immediate impact on Mumbai Retailers than what has already happened on Wednesday,” said Damodar Mall, director for food strategy at Future Group.

Mumbai Retailers don’t see affect on footfalls

However, some Mumbai Retailers feel that footfalls could get impacted temporarily without affecting sales. “We could see serious shoppers coming in the mall for the next few days and window shoppers will avoid it. But at the end of the day, malls are about leisure and consumers would come back sooner than later,” said a senior official of one of large Mumbai Retailers.

Security aspects including electronic surveillance, baggage searches along with a comprehensive disaster management team has been in place in most malls especially after the terrorist attack that shook Mumbai in 2008.

“While security will surely be beefed up, footfalls won’t be impacted as consumer resilience will surely show up in the city. It’s the commercial capital of the country and from stock exchanges to offices, all businesses are running normally,” said Kumar Rajagopalan, CEO, Retailers Association of India (rai). RAI, which represents companies such as Future group, Aditya Birla More, Reliance Retail and Shoppers Stop among other Mumbai Retailers.

But given the high number of footfalls, mall developers such as Nirmal Lifesyle are not taking any chances and have decided to upgrade existing security measures across multiple entries at its mall in Mulund. “It is sad and unfortunate that our city once again came under attack. But we are known for being resilient. And we believe this won’t have an impact on the footfalls,” said Dharmesh Jain, CMD, Nirmal Lifestyle, where a week’s average footfalls is 25,000 which goes up to 40,000 to 45,000 during weekends.

Mumbai Retailers

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Retailers Who Are Cash Strapped Face Collapse

July 12, 2011 By 1 Comment

Retailers Who Are Cash Strapped Face Collapse

The cost of stocking the shelves for Christmas may force the collapse of several more high street retailers, a leading accountancy firm has warned.

Ernst & Young said retailers who had been “hanging on in there” since the 2008-09 recession might not be able to build up enough cash to pay for extra stock for the crucial festive season as well as the rent due at the next quarter-day in September.

“We will continue to see a shakeout of those struggling with rising costs, wage inflation and falling consumer spending,” said Adam Hudson, Ernst & Young’s head of restructuring. “Retailers will find it very hard to make enough cash to invest in Christmas. If retailers can’t get the inventory, they won’t make money,” he said. “Some of them only really make money at Christmas.” “Some of them only really make money at Christmas.”

 

Cash Strapped Retailers

Suppliers might cut back credit to retailers

Hudson added that suppliers, spooked by the recent spate of retail failures, might cut back their lines of credit to struggling retailers.

Research published last week showed retail chains were closing stores at a rate of about 20 a day. Discount clothing chain TJ Hughes, Focus DIY, Habitat and fashion chain Jane Norman are among the chains to have failed over the past two months. Habitat and fashion chain Jane Norman are among the chains to have failed over the past two months.

Ernst & Young research shows retailers have issued 26 profits warnings so far this year, more than the number issued over the whole of 2010.

Retailers About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 141,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

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Retailers To Charge For Shopping Bags From Friday

July 1, 2011 By 5 Comments

Retailers To Charge For Shopping Bags From Friday

Retailers will start charging for shopping bags anywhere between Rs 1-7 from Friday in line with the Government notification to retailers to charge customers for the plastic carry bags from 1st July 2011. This initiative will be first piloted in Mumbai before being rolled out across the country.

“Charging consumers the cost of plastic carry bags would lead to a substantial drop in consumption of plastic bags whilst at the same time allow flexibility to service consumers who are ready to pay, said Kumar Rajagopalan , CEO, Retailers Association of India (rai).

RAI, which represents retailers such as Future group, Aditya Birla More, Reliance Retail and Shoppers Stop among others has coordinated the initiative amongst them to charge customers for the plastic carry bags from ranging from Rs 1 to 7 depending on the store format. While, customers will be charged only the material cost of bags, they will also be given the option of bringing their own bags.

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Retailers to follow new rules for plastic waste management

In February this year, the Union environment ministry had notified new rules for plastic waste management that require municipal authorities to fix a minimum price for carry bags as well as ban the use of plastic sachets for storing, packing, or selling chewable tobacco.

The ministry’s notifications had said that no carry bags shall be made available free of cost by retailers to consumers and state governments/Union Territories will determine a minimum price for carry bags which covers their material and waste management In addition, it also acts as a deterrent to their excessive use, said the notification.

However with millions of bags used everyday, retailers could actually benefit from the new norm in terms of improving their margins. “We generally factor carry bags costs in our prices so even a nominal price would add up directly in our operating profit.” said a senior official of a large department chain.

Retailers use 8 million bags a day!

While there are no official figures on bag use, environmentalists say more than 8 million are used in Mumbai every day. “Most retailers are anyways passing on the price of plastic bags to consumers especially in department stores, where you can’t carry your own bags,” said an activist, who specializes in waste management.

While this may be new to India, several countries have implemented similar norms. Bangladesh was the first country to ban plastic bags in 2002 amid worries that they were blocking drains during the monsoon. Other countries have since moved to ban, discourage or promote the reuse of plastic bags, hundreds of billions of which are handed out free by retailers each year. Denmark and Ireland have both experimented with taxing plastic bags. Dublin said the tax, imposed in 2002, had reduced usage by more than 95%.

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Global Retail Majors May Come To India In ’11

December 28, 2010 By Leave a Comment

If consolidation was the buzzword for the retail sector in 2010, the coming year is expected to see some big-bang entries of global retail majors as the sector looks forward to a positive outcome on the relaxation of FDI norms in retail.

Even while India added around 5 million sq ft of retail space in 2010, some stores were relocated and some unviable ones faced closure. Once-lucrative businesses were bought out. While Vishal Retail was acquired partly by Shriram Group and partly by private equity fund Texas Pacific Group, Indiabulls, which had acquired Piramal’s Piramyd Retail in 2007, put its retail expansion plans on hold to focus on its main businesses of financial services and real estate .

Yet, with the lessons learnt from the past few years, prudent modern retailers managed to clock double-digit growth rates. Same store growth was well above 15%.

According to Thomas Varghese, CEO, Aditya Birla Retail, 2010 can rightly be called a revival year as “starting from the budget announcements to modifying income tax slabs, good salary increase across sectors and a fairly good monsoon—all aided in driving consumption across categories”.

carrefour

The revival though, had to overcome hurdles such as high rentals, attrition, higher cost of compliance and low investments flowing into the sector.

According to Varghese, the recession was a blessing in disguise for the retail industry. Though it slowed down the pace of growth, it helped retailers to introspect and revisit their business models. As a result, strong business fundamentals took over ambitious expansion plans, which warranted restructuring exercises, relocation of stores and renegotiating rentals.

These initiatives helped improve the profitability and viability of different retail formats and also enabled retailers to innovate, adopt best practices and bring in efficiencies in their operations. “I am confident that rich learning from the last couple of years will enable them to expand and build a sustainable business,” said Varghese.

What’s in store for ’11

In 2011, consulting major PwC expects more focus on the issue of FDI. This should facilitate the much-awaited entry of French retail giant Carrefour, possibly in a tie-up with Kishore Biyani’s Future Group.

According to N V Sivakumar, leader retail and consumer practice, PwC India, “It is only a matter of time before the retail sector is fully liberalized.” FDI will ensure necessary capital inflows to steer the retail industry ahead.

Shopping experience the key

APwC thought leadership report entitled ‘The Benefits of Modern Trade to Transitional Economies’ indicates that modern trade positively benefits consumers , producers/farmers as well as the exchequer.

Since growth is the result of high footfalls in stores, enhancing the consumer’s shopping experience will continue to be an important factor. “It is interesting to note that most of our population is young and have high aspirations. To understand the psyche of this evolving Indian consumer and ensuring his needs are taken care of will be key driver for growth,” said Thomas.

Till now, Indian consumers had access to private label products in food and beverage, apparel, footwear and FMCG products. An enhanced focus on workforce management would also be critical.

 

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Retailers Breathe Sigh Of Relief As Crowds Turn Out For Boxing Day Sales

December 27, 2010 By Leave a Comment

Dressed as a tiger, standing on the corner of Regent Street in London’s West End and wearing tartan trousers and a day-glo bib advertising a nearby golf sale, Mohummad was in prime position today to survey the momentum of the Boxing Day sales.

Peering out from the gurning mouth of his enormous, hairy mask, the 22-year-old admitted he had been hoping for a quiet day. “The fewer people come to the sales, the fewer children there are to prod me,” he said. “I’d been hoping, what with the tube strike and all, that the sales would be a washout but while they’re not exactly what you’d call frenzied, you’d definitely call this a crowd.”

Despite the one-day tube strike which saw almost all London Underground tubelines disrupted, enough shoppers had found their way to London’s West End by early afternoon today for retailers to say a silent prayer of thanks that their worst fears had proved unfounded.

“Businesses has been really bad,” said Sayaka Iversen, at Hoss Intropia on Regent Street. “We’ve lost loads of customers because of the weather, then the pre-Christmas rush didn’t really happen. I was so cross when I heard the unions were holding a tube strike today: it’s not fair of them to jeopardise the businesses of everyone in the West End when we’ve already had it so bad and need the boost so badly, but fortunately, I think today is going to be OK after all.”

Judging by yesterday’s crowds, while the sales were not quite the bonanza day predicted, business was still brisk: there were still long-suffering husbands and boyfriends slumped in shop corners, dully waiting for their partners to make their choices.

There were still the gimlet-eyed bargain hunters elbowing fellow customers out of their path; and as the day wore on, a pushing mass of shoppers did spread and spill from the pavements to the roads of the main shopping streets, causing much tooting and hooting of traffic.

“But it’s still not like the old days,” grumbled Janet Withenshaw, as she stamped her feet against the cold in the slow but steadily moving queue into Selfridges. “I once queued almost overnight outside this very shop to buy a Vivienne Westwood dress in the first day of the sale.” She wryly nods towards a group of teenagers ahead of her, loudly complaining about how slowly the queue is moving. “Kids today don’t know they’ve been born.”

The queues might not compare to those sale-days of yore, but the bargains on offer certainly held their own. Shops which had launched pre-Christmas sales to lure a public made shy by icy weather and the economy, had slashed prices even further, and on more lines. The promise of the rise in VAT on 4 January – from 17.5% to 20% – gave all reductions an added value.

Shopping centres issued a blizzard of statistics suggesting the public was out in force. Brent Cross in north London opened its doors two hours early, and a spokesman reported up to 10,000 shoppers in the first hour of the sales. At lunchtime yesterday the Trafford Centre in Greater Manchester said there were 45,000 shoppers and that more were still pouring in.

Gordon McKinnon, director of operations, described the atmosphere as “buzzing,” but complained about the “archaic” Sunday trading laws, which meant that large stores were only allowed to open for six hours. Despite the restrictions there were 5,000 people queuing to get in at 9.30am, he said, and a further 1,000 gathered outside Selfridges.

But not all shoppers pounding the streets were there for fun. “I lost my job six months ago and don’t expect to find a new one any time soon,” said Bonny Natt. “My finances are not in a good way, VAT is going up and if the government does start cutting benefits, I’m really going to be in trouble.

I’m here to buy some absolutely vital basics at absolutely rock-bottom prices. Gone are the days when the sales were a chance to indulge for me. I don’t know what next year holds for me but I’m assuming the worst.”

 

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High Street Sales Plummet With The Temperature

December 21, 2010 By Leave a Comment

The arctic weather is estimated to have cost retailers up to £750m in lost sales as new figures show the number of shoppers who ventured out at the weekend was down 20% on last year, with Wales and London hardest hit. “The snow has really put the boot in to retailers,” said Tim Denison, director of retail intelligence at Synovate, which counts shoppers on the high street and as they enter retail malls. “Without shoppers the tills simply don’t ring.”

The snowy conditions put a huge dent in what was supposed to be retailers’ biggest sales weekend of the year. In Wales shopper numbers slumped by nearly a third, while the south-east and West Midlands recorded declines of more than 25%.

With fewer shoppers, retailers will now be facing the prospect of having more stock left than they had anticipated. Some are likely to slash prices in a bid to clear it, while others will be pushing far more stock into the January sales – hitting their profit margins.

The grim tidings from the high street have started to worry stock market investors. Some of the UK’s best known chains, including HMV, Dixons and Game – which all make the lion’s share of their profits at Christmas – were among yesterday’s biggest stock exchange fallers.

Concerns about the health of the retail sector also hit Tesco, Marks & Spencer and Next, but Altium analyst Philip Dorgan said they were well equipped to ride out the storm. The situation was worse for chains such as HMV, which is already struggling amid plummeting sales of CDs and DVDs.

“For companies like Game and HMV, Christmas is critical to their survival,” said Dorgan. He said retailers would be hoping that shoppers take time off work this week to finish their shopping. The biting start to the winter has resulted in almost a month of chaos, and Synovate said shopper numbers for the first three weeks of December were 10% lower than during the equivalent three weeks of 2009.

Shoppers usually splash out £37bn during December but in recent weeks snow has made it difficult to get to shops. London’s 120-store Brent Cross shopping centre shut early on Saturday. Richard Hyman, strategic retail adviser at Deloitte, said a “massive amount of shopping could be crammed into the next few days”, but he put the sales shortfall to date at between £500m and £750m.

The big freeze has forced many consumers online, but many multichannel retailers have not been able to offset poor shop sales with increased internet orders as they have had to bring forward order cut-off dates as they try to clear the backlog created by earlier snowfalls.

Amazon is only promising that orders placed before 18 December will be delivered by Christmas Eve and John Lewis’s website has stopped taking new orders for home delivery. In a message to customers John Lewis, which despite the big freeze has enjoyed two weeks of record sales exceeding £120m, said it had taken the decision “to enable us to do all we can to deliver existing orders to our customers in time for Christmas“.

Its retail director, Andrew Murphy, said: “When the snow hit a couple of weeks ago we saw a lot of store sales transfer to online. However, we haven’t seen that during this current bout of bad weather as Christmas is five days away.” The behind-the-scenes difficulties faced by retailers have led to fears of empty shelves by end of this week as many retail distribution centres are located in the Midlands, where more snow is set to fall.

Sainsbury’s said the adverse weather was “challenging” but that its supply chain and delivery services were performing well. “Deliveries are getting through and our stores remain open and well stocked,” said a spokesman. External contractors with snowploughs had cleared its car parks.

Simon Lloyd, head of logistics at property firm DTZ, said retailers were encountering delays but still moving goods around the country. Delivery problems arose in the “last mile” to stores and houses due to uncleared roads in residential areas. “With more snow forecast this week, there are real concerns over whether last minute online shoppers will receive their goods in time for Christmas,” he said.

 

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Shops Feel The Chill As Buyers Stay At Home

December 19, 2010 By Leave a Comment

It should have been the busiest shopping day of the year. But as blizzard conditions caused massive disruption, Britain’s beleaguered retailers were left forlornly offering deep discounts on clothes, gifts and household goods in an attempt to attract reluctant customers.

Crowds thronged pavements in London’s West End and many shopping centres reported solid trading but experts say that dismal weather is likely to have taken an edge off business on an economically crucial weekend as retailers struggle to match last Christmas’s takings.

“The return of the snow and ice is a serious body blow for retailers who must have been desperately hoping the latest snow blast would not arrive until after the last Saturday before Christmas,” said Howard Archer, chief UK economist at IHS Global Insight, who said supply chains had been hit, too, as shipments of Christmas goods got stuck at ports.

The New West End Company, which represents 600 retailers on Oxford Street, Bond Street and Regent Street in the heart of the capital, said that prior to the weather closing in, it was expecting 1.2 million shoppers to spend as much as £130m this weekend. “It’s a critical weekend for retailers,” said Sarah Cordey, a spokeswoman for the British Retail Consortium (BRC).

“Today is some people’s last chance to go out and shop. People who haven’t bought gifts will be pretty determined to go out and get them.” For many major retailers, the weeks running up to Christmas can account for as much as 60% of the year’s turnover. But prospects are cloudy as consumers tighten their belts in advance of government spending cuts, which will begin to take effect next year.

A BRC survey found that only 35% of stores expect a better Christmas than last year – while 36% anticipate a worse one, and 29% see little change. Anxious to reap rewards ahead of a VAT rise in early January, stores are offering discounts as deep as 50% or even 70%. French Connection, Gap and Warehouse are among those offering half-price stock – usually a rarity until sales begin on Boxing Day.

At Bluewater shopping centre in Kent, some 160 staff worked to keep car parks free of snow, driving snowploughs and gritting trucks. General manager Andrew Parkinson said the centre, expecting 700,000 shoppers this week, was holding up surprisingly well: “For many people, this will be their last chance to shop. For others, it will be the beginning of their Christmas shopping,” he said.

Freezing temperatures may encourage some shoppers to turn to the internet. But in Scotland, conditions were so poor that several major firms, including Amazon and Marks & Spencer, stopped taking orders as they struggled with a backlog of deliveries.

Andrew Bracey from the online supermarket Ocado, said his firm’s trucks had been equipped with winter tyres: “The problem can be other road users who haven’t taken proper precautions. When they get stuck, the roads get gridlocked,” he said.

 

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It’s Going To Be A Cut-Price Christmas As Retailers Woo Shoppers Kept Away By Snow

December 15, 2010 By Leave a Comment

Last-minute shoppers are set to bag a cut-price Christmas this year as retailers offer hefty discounts to boost spending before the looming government austerity drive. With just 12 shopping days left before Christmas nervous store bosses are trying to claw back millions of pounds of sales lost to the recent blast of arctic weather that forced shoppers to stay at home.

To get the tills ringing Tesco and Argos are offering half-price deals on toys like Buzz Lightyear dolls while fashion chains French Connection, Hobbs and LK Bennett have slashed the price of party frocks and high heels to get hard-up fashionistas to spend. “The snow in the week before last murdered a lot of us,” said the chief executive of one fashion group, who added that discounts were bigger than in previous years.

Last week’s milder temperatures brought some respite ahead of what is potentially the biggest sales week of the year for retailers with well over £1bn expected to be rung up at the tills every day. Department store chain John Lewis said it had set a new sales record last week as takings surged to £121m on the back of “pent-up demand”.

David Barford, director of selling operations, said customers pulled out all the stops to get their hands on iPads, coffee machines and handbags: “Even in areas where snow has persisted we saw the determination of our customers to deliver a perfect Christmas for their friends and family.”

John Lewis’s “never knowingly undersold” pledge meant the retailer had to match special offers available at rivals such as Debenhams and Dixons. Barford conceded that discounting “had undoubtedly played a part” in pulling in sales and he suspected it would be the group’s high water mark this year. But he could not rule out another sales bonanza this week.

The intense competition among retailers is also delivering festive cheer for hard-up parents as one of the major battle grounds is toys. Caution from shoppers as well as the intensity of rivals’ promotions has forced The Entertainer, which is the UK’s biggest independent toy chain, to bring forward its January sale and it is already offering 75% off some toys.

“We have already cut the prices of a lot of the stuff that we would normally put in the January sale,” said managing director Gary Grant, who complained that fewer shoppers had been visiting its stores. “Shoppers are being more cautious and there is very competitive pricing about.”

Argos is offering 50% off some toys while Tesco is offering “three for two” across its range, including favourites such as Lego, Barbie and Monopoly. “It all depends on the last few weeks but there is a possibility we could be down on last year,” added Grant.

The latest data from analysts at Synovate, which counts shopper numbers, highlights the tough conditions faced by retailers. Tim Denison, director of retail intelligence, said UK shopper numbers were down 4% on Saturday, compared with the same day last year.

The trend is more serious if the fortnight affected by the snow is examined with UK numbers down 14.3% year on year and 21.5% in Scotland. “Retailers are acutely aware of the lack of consumer confidence,” said Denison, who highlighted the trend for “spot” promotions online, which are posted on websites but designed to encourage store trips.

Howard Archer, chief economist at IHS Global Insight, said that a big concern for retailers is that more cold weather is forecast. “With Christmas falling on a Saturday, next weekend’s trading is going to be of major importance. The problem for retailers stems not just from the bad weather stopping people getting to the shops but in the disruption it causes to supply chains.

Supply chains have been massively hit by the snow and ice this month, with many products being stuck at container ports for an extended period. More bad weather would increase the likelihood that some people may end up buying less Christmas presents due to time constraints.”

Retailers are also devoting more firepower to Christmas this year as they are worried sales will dry up in the new year as the VAT rise kicks in and public sector cuts come to fruition. The combination is particularly deadly for retailers such as B&Q and Homebase selling big-ticket items such as bathrooms and kitchens.

B&Q is launching its “biggest and earliest” January sale on Friday – a week earlier than last year – as it tries to tempt customers into a last hurrah. With storm and weather clouds on the horizon, it would seem there is one shopper that retailers can rely on to splash out at Christmas.

A survey by mystery shopping company Retail Active has profiled “last- minute man”, a potentially high-spending group that has left buying a present for their partner until the very last minute. “Last Minute Man is a salesperson’s dream: he’s cash-rich and time-poor,” said Retail Active’s managing director, Julian Chamberlain.

“He does his desperate shopping in the final hours of Christmas Eve and he ends up buying expensive and unwanted gifts. We have been coaching staff on the jewellery counters of a major retail chain on how to spot him. They have to look for a man looking through a wide variety of stock, not knowing what to buy and wearing a blank expression.”

 

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Biyani Sees Future With Carrefour

December 10, 2010 By Leave a Comment

Future Group CEO Kishore Biyani is in Paris as the country’s largest retailer has renewed its talks with Carrefour for a joint venture that could let Europe’s top retailer enter India. Biyani will discuss the modalities of the proposed JV with the French firm, an official close to the development said. “This does not mean that the deal has been finalised,” the person added.

A company spokesman confirmed that Biyani is in Paris for talks with Carrefour officials. Rakesh Biyani, CEO of Future Value Retail Holdings that runs Big Bazaars and Food Bazaars, declined to comment. The official quoted first said the country’s regulation for the retail sector is part of the discussions.

India does not allow foreign investment in multi-brand retail, but the government in July revived the debate by seeking feedback from various stakeholders about allowing FDI in multi-brand retail. Both US President Barack Obama and French President Nicolas Sarkozy are believed to have called for opening up the sector during their recent visits to the country.

carrefour

Carrefour and Future Group have been in talks for a more than a year now. “The deal has been on and off for some time,” the official said. Carrefour has been looking to enter the booming Indian retail market for six years now and it has had talks with Reliance Retail and real estate group DLF before turning to Future Group.

It has two entities in India – Carrefour WC & C India and Carrefour India Master Franchise Company – and has announced plans to open its first cash-and-carry wholesale outlet in Delhi. Global retail giants such as Tesco, Carrefour, Wal-Mart and other from the developed world are keen to have a presence in India despite regulatory obstacles, hoping that the laws would be eased as it happened in the telecom and other sectors.

Also, the cleaning up of excesses in the industry, after the exuberance of the past decade, is giving hopes of a saner approach to business. In the last downturn, many retailers, including Reliance Retail, the AV Birla group’s More, which went on a spree in setting up outlets, had to shutter many outlets and a prominent name, Subhiksha, went bust.

On Thursday, Future Group’s listed entity Pantaloon Retail (PRIL)’s stock closed 11.45% down at Rs 344.75 on BSE, where as benchmark index closed 2.31% down to 19,242 points.

 

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Value Retailers Like Reliance, Recruiting Tailors

December 6, 2010 By Leave a Comment

For North Indian women customers who prefer flared Patiala salwaar suits, Arun Sirdeshmukh is a new friend. The chief executive of Reliance Trends recently increased the length of the garment retailer’s ready-to-stitch salwaar suits by one metre in north Indian markets. He has also lined up a battery of in-house tailors across the country to stitch garments 20% cheaper than any other tailor in the neighbourhood.

Sirdeshmukh has altered the way Reliance’s apparel fashion arm functions this year, soon after he started studying Indian anthropometry (physique) and cultural needs of the region. “The Indian customer needs someone who can offer affordable and fashionable clothing,” says Sirdeshmukh .

He is not the only one to realise that. A growing line of value retailers such as Reliance, Future Group’s Fashion@Big Bazaar and Max Retail are selling ready-to-stitch clothes and recruiting tailors to offer the perfect fit and customized style to customers as these marketers try to convert more people to branded clothes across towns, cities and metros.

That’s because Indians still love tailor-made clothes, literally. Tailored clothes account for half the garment market in big cities and 60% of the market in smaller town and cities, say retailers.

Value retailers, who have greatly expanded the branded apparel market in recent years by offering readymade garments at cheaper rates and hold a 30% market share in the $6-7 billion organised apparel retailing, now bet on tailors to speed up growth. It is growing 20% a year.

“Value retailing is looking up, as 50% of Indians in the 15-45 age group prefer branded clothing. The new model entails employing tailors and offering well-fitting garments at lower price,” says Prashant Agarwal, joint MD of Delhi-based Wazir Advisors , a management consulting firm focused on Consumer Products and Services sectors.

Ready-to-stitch garments account for one-fourth of all units Reliance Trends sell.

In cities, apart from women who visit tailors for their Indian wear, men prefer bottoms and suits to be stitched for the perfect fit. In smaller towns, lack of affordability (of fashionable garments) and access to retail outlets confine customers to tailors . Also, affordable ready-to-stitch (RTS) offerings attract several people who never tried readymade garments to these shops, the first step to switching over to readymades.

Stand-alone tailors are feeling the heat. And many are changing with times. Rizwan Shariff, a small-time tailor in Andhra Pradesh’s Chintamani town, moved to Bangaluru two years ago and joined Reliance Trends. “With customers preferring readymade garments and preferring organised retailers over us, I came to Bangaluru,” says Shariff who now heads a team of six tailors at the Richmond Road outlet of the retailer.

Jitendra Chauhan, an Ahmedabad-based tailor-turned promoter of apparel multi-branded outlet Jade Blue, says, “With organised retailing offering similar services at far lesser prices, (standalone) tailors have no chance to survive the onslaught.”

The picture is completely different from five years ago, when branded and readymade garments would stand no competition to the tailor who would stitch a garment for as low as Rs 200. The gap was bridged with the entry of a slew of value retailers such as Koutons , Cotton County, Cantabil, Priknit, Westside , Big Bazaar, and Reliance Trends that started selling branded readymade clothes at low rates.

Today, there are about 5,000 exclusive brand outlets of organized value retailers and the number is expected to touch 7,000 by 2012 as existing players expand and new ones enter, says Wazir’s Agarwal. Amit Kumar, head of Fashion@BigBazaar , the apparel and accessory arm of the country’s largest retailer Future Group, says the company is working towards dispelling the myth that fashion is luxury.

For example, Fashion@BigBazaar retails T-shirts and shirts at Rs.149 and Rs.199, respectively, jeans at Rs.299, salwaar-kameez-dupatta sets for Rs.399 – Rs.429 and ready-to-wear ethnic wear at Rs.329. “We bring tailors to one organised platform, enhance their skills through our retail know-how and encourage their creativity. We even let customers design their own dresses with our in-house tailors,” says Agarwal.

The retailer is keen to take his tally of Big Bazaars, which house Fashion@BigBazaar, from the current 137 to near 200 over 12-16 months. In addition, there are six standalone Fashion@Big Bazaar outlets across five cities. Value retailers are also expanding their product portfolio with popular local outfits to reach out to more people.

“While we have been retailing everything from fabric, ready-tostitch, infant wear, children’s, teenager’s, women’s and men’s garments, Indian wear, corporate wear, speciality clothing including active sportswear and yogawear, we have also been catering to local populace by offering bandhni sarees (in Gujarat ), mundu (in Kerala) and burqa (in Hyderabad),” says Reliance Trends’ Sirdeshmukh.

Interestingly, the tailor-retailer axis is not limited to value players though. “Even premium men’s wear brands like Raymond , Reid and Taylor and Vimal have brought in tailors to customise garments for their customers,” says Jade Blue’s Chauhan. “At my stores, the category is growing at 30% year-on-year ,” he says.

 

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