Spencer's seeks Private Equity

Spencer's Retail, a part of the RPG group is looking for private investors to offload 10% stake. In a statement , Mr Sanjiv Goenka announced that the company was in negotiations with more than 1 private investor to offload 10% equity stake in the company. Spencer's retail expects to break-even in about 12 months and this move is aimed at raising funds for its cautious expansion plans. Spencer's have opened 5 new stores in the last 3 months and plans to add another 10 this fiscal. It would be recalled that Spencer's in the last year had gone on a major cost cutting exercise and shut down 100 enviable stores.. The company plans to invest 100 crores this fiscal to fund its expansion plans and expects to break even at the store level in 6 months.

ORGANISED RETAILERS COME TOGETHER TO CUT COSTS

ORGANISED RETAILERS JOIN UP
With increased competition, dwindling margins and a lethargic business environment, major retailers in India have come together to forge a coalition of sorts to leverage and share common resources. Top players like Future Group, Spencers Retail, Aditya Birla Retail and Reliance retail have come together to align their sourcing operations and share private labels, logistics, warehouses and hiring details on a transactional payment basis.

Mr. Kishore Biyani, MD of Future Group however has emphasized that the competition at the front end would remain as before. It is only the back end operations that would be shared. He added that their infrastructure and resources were designed to be shared with others.

Retailers expect to improve operating margins by 2 to 3 % by sharing their back end resources.

The idea of a coalition emerged after a series of meetings in Mumbai between Mr. Kishore Biyani, Mr. Raghu Pillai – CEO , Reliance Retail, Mr. Sanjiv Goenka – Vice Chairman, RPG Enterprises and Mr. Thomas Verghese – CEO, Aditya Birla Group.

Hariyali Kisaan Bazaar to become seperate Entity

DCM Shriram Consolidated ltd, parent company of Haryali Kisaan Bazaar is planning to hive off the company as an independent entity. The retail arm of Hariyali Kisaan Bazaar is currently a Rs 400 crore plus business with a little over 300 stores spread across 8 states.. This move is expected within a year’s time with the purpose of picking up capital from the market to fund its expansion plans. The retail arm is expected to grow to 500 stores within the next 2 years and revenue to 750 crores.

In a statement by Mr. Ajay Shrram, Chairman cum Senior Managing Director of DSCL, the company is planning to invest Rs 200 to Rs 300 crores for expansion. He also informed that though the company is currently negative in profits , it was expected to turn positive in the next couple of years.

The company has shown impressive growth – from 70 stores in 2007 to 160 stores in 2008 to 302 stores in 2009 . The offering at these stores include agri products, food and FMCG, lifestyle products which include apparel and footwear, home linen, consumer durables and other household products. . HKB operates in 2 formats – the larger Centre which is on a plot size of 2 to 4 acres and has facilities of petrol pump, warehousing , output collection and the HKB Stores. HKB Centres are located in rural areas on highways connecting two towns. The other smaller format – HKB Stores is located in market places of small towns and is spread over areas of 2000 to 4000 sqft... HKB has currently 82 centers and 220 stores.

r

Retail Ads - The week that was

Retailers this week highlighted the following occasions

1. Festival of Raksha Bandhan
2. Independence Day
3. Anniversary
4. Close of Sales

The predominant theme however was Raksha Bhandan which falls on the 5th of August. The most appropriate ad in copy and offering is Shopper's stop which has the headline talking of ' Gift your sister '. The ad goes on to highlight relevant products for gifting.

Vishal Mega Mart also has Raksha Bandan as the theme emphasizing on the Bandhan element. The offering however has no relevance to the festival and none of the products highlighted could be used as a gift for a sister.

Big Bazaar too focuses on Raksha Bandhan , but the theme remains 'Savings' as the ad talks of gifts from savings from ration purchases. Any relevance ??

With Independence Day just 2 weeks away, Croma is using the occasion to promote their offering by linking them to independence and announcing a special 'Independence Sale'E-Zone celebrates it's anniversary with special offersPantaloon's closes it's sale