Thursday, October 30, 2008

Mall owners going for the revenue share model as retail rentals fall

Citing the slowdown in the economy, both mall owners and retailers are in troubled waters. Mall owners who are following the model of fixed rentals are worried due to 20-25 per cent fall in retail rentals. On the other hand, with market going slow, retailers have to watch their profits and are finding it difficult to pay fixed rentals.

The industry experts say that in such a scenario revenue sharing rental model works best for both retailers and mall owners. There could be a mix of fixed plus variable charge where fixed sum may be based on the brand equity of the mall while variable sum would be the share of revenue generated by the retailers agreed among both the parties. Such a model is practiced by various mall owners and is easy on pockets in both the good and bad times.

The whole article can be read at The Hindu Business Line

Tuesday, October 21, 2008

Future Axiom begins operations in India

Announcing a further leap in redefining the new age mobile retail, Future Group, India’s retail giant has joined hands with Axiom Telecom, the largest mobile retail company from the Middle East to form Future Axiom Telecom Ltd., setting an all new dimension of innovation in the Indian mobile retail industry.
Announcing the venture, Mr. Ashy Sehgal, CEO, Future Axiom Telecom Ltd. avers “The Future group began trading in communication products in 2006 through its counters in Big Bazaar. Almost immediately, ConvergeM was set up and witnessing the immense growth, emerged the need of making the handset retail division distinct from the group. While Future Group (Pantaloon Retail) was on the lookout for a partner with expertise in the retailing of communication products, Axiom Telecom was keen to enter the Indian market and being a part of the Indian growth story. Future Axiom is all set to venture in the INR 50,000 crore mobile retail industry and set new benchmarks. We are confident that the affiliation of Indian retail expertise and Middle East’s mobile retail skills will be extremely rewarding for our customers.”
“Future Axiom will operate in more than 500 stores and touch points in 58 cities under the brand name of Mobile Bazaar and Mport. We will be revealing the new brand and store formats shortly. There are major expansion plans on the anvil; we plan to be a 1500 outlet organisation by the end of December 2009.” Mr. Sehgal added
The 50:50 joint venture involves an initial investment of about $ 40 Million. It will retail, distribute mobile handsets and accessories and set up service centres in India. The JV currently operates through retail and service factory and will add more channels in the due course.
Mr. Faisal Al Bannai, Founder, Axiom Telecom said, “We recognised India as the land of opportunities and we are delighted being partners with the well-known Future Group for operations in India. This partnership will definitely help our expertise in the mobile retail space grow and set new benchmarks with Future Group’s reach and understanding of the Indian consumer.”
Future Axiom is set with the philosophy and belief that the customer does not have a great reference point for making a mobile phone purchase. The customer seeks information through informal sources and does not use the retail point as a shopping destination but more as a quick transaction point. Future Axiom is determined to alter this trend and provide complete information pertaining to mobile handsets to enable the perfect selection by the consumer, aiming at absolute customer satisfaction and delivering impeccable service.
Future Axiom also has the unique advantage of specific skill set departments like In-House Retail Designing department, Quality Control department and Authorised Service facility provided by highly trained professionals to ensure a perfect customer experience. 

Source: Moneycontrol

Friday, October 17, 2008

Giorgio Armani enters India with flagship boutique

After the entry of high-end international brands like Christian Dior, Louis Vuitton, Dunhill and others into the Indian market, fashion
luxury brand Giorgio Armani launched its flagship boutique and a store in the capital on Thursday. 

Both are located at the upmarket Emporio Mall at Vasant Kunj in south Delhi. "I am truly excited to finally have a presence in India. This country, which perfectly mixes the spirit of adventure, the sense of mystery and majesty with the principles of elegance, sophistication and modernity, has long been a wonderful source of inspiration to my collections," Giorgio Armani said in a statement. 

The Giorgio Armani boutique covers over 277 square metres on one floor of the mall as against the Emporio Armani store that covers an area of over 210 square metres. The boutique's interior is entirely dedicated to Giorgio Armani's signature women's and men's apparel and accessory prĂȘt-a-porter collections. 

"The overarching theme is the creation of an intimate personal space with wardrobes and trunks showcasing the season's collections, where the defining materials are brushed silk," a company statement said. 

"The floor, finished with grey stone panels, creates a sophisticated ambience. A shiny dark ceiling provides a dramatic yet comforting effect which is further enhanced by the lighting design that plays with shadow and light creating focal areas. Invisible recessed lamps, transformed into spotlights, trace the contours or aim directly at the garments and objects on display," the statement added. 

The boutique also features an area dedicated to the new Giorgio Armani Hand Made to Measure service for men, the ultimate in customised luxury. One large wall projection of the current collection adds to the overall effect that blends craftsmanship with modernity in an unexpected way and presents the perfect surrounding for the world of Giorgio Armani. 

The two outlets are managed by a newly formed joint-venture company between the Giorgio Armani Group, that designs, manufactures, distributes and retails fashion and lifestyle products, and the DLF Retail Brands Private Limited to form Giorgio Armani India Pvt Ltd. 

While the former has a 51 percent stake in the company, the latter has exclusive rights for the development of Armani retail stores throughout India. 

The Giorgio Armani Group designs, manufactures, distributes and retails fashion and lifestyle products including apparel, accessories, eyewear, watches, jewellery, home furnishings, fragrances and cosmetics under a range of various brand names.

Spar forays into India

Global food retail chain Spar started its Indian opeartions on Friday inaugrating the company's first supermarket at Hyderabad. 

The company has entered the Indian market under a licence agreement with global retail major Landmark Group's Indian subsidiary Max Hypermarkets, a release here said. 

Under the agreement, Max Hypermarkets will be responsible for the entire business operation- from capex outlay to day-to-day operations including the management of the supermarket, while Spar would provide knowledge transfer and technical expertise, it added. 

The 20,000 sq ft supermarket at Hyderabad offer products under categories like grocery, fruits and vegetables, bakery, dairy and take away foods, meat, poultry and fish, wine. 

It will also stock beer, tobacco, home textiles, personal care, crockery, kitchen appliances, travel and IT accessories, including imported items from Europe and South East Asia. Spar runs a series of supermarkets across 35 countries in four continents, the release added.

Monday, October 13, 2008

Falling Re may hike prices

The rapidly spiking dollar may increase the monthly bills of consumers in urban India. Already hit by double-digit inflation, the great Indian middle class may get yet another shock as retailers are contemplating to increase prices if they can’t contain the growing import bills. In fact, the dollar’s upward movement, from Rs 39 in January to Rs 47 in October, has already inflated the import bills of many retail chains though they have not increased the prices so far. Rajan Malhotra CEO Big Bazaar, India’s largest retailer by volume, says that they might hike prices if Indian rupee continues to depreciate further.

“If the trend of a rising dollar continues some prices are likely to move up as our forward bookings will get impacted. Since we are discount retailers, we will not be able to offer reduced pricing,” he says. The chain imports primarily suitcases, trolleys and toys from China, apart from food items. The company’s buying for the festive season is already over but imports in the next quarter are likely to be impacted.

Meanwhile, dollar’s rise has increased import costs for Spencer’s Retail by 10%. So far, the retailers are absorbing the rise in prices. But, they feel that if the rupee depreciation is not checked in time, they might be forced to pass it on to the customers. “We haven’t yet considered hiking prices of imported goods. We have no choice but to absorb the burden,” avers Samar Singh Sheikhawat vice president-marketing Spencer’s retail. Sale of imported goods contributes 25% to the company’s overall revenues. The chain imports over three thousand items in various categories like food, electronic goods, etc.

Many retailers have devised another way to beat depressed margins. Instead of importing they are now depending on local brands.

“We import a lot of household items but are now depending on local products. Though it is difficult to give a figure, we have considerably decreased import of items. With the rupee depreciating depending on local products is a viable option. Gradually, everyone will come to rely on the local brands,” says RC Agarwal CMD Vishal Retail.

Organised retail in India is worth 4 per cent of the $350 billion Indian retail industry. It is growing at about 30 per cent per annum and imported goods form a significant chunk of the industry. However, not everyone is of the view that a depreciating rupee will significantly impact the organised retail sector. “Retailers sell imported items under private labels. Private labels have not really picked up in the Indian market. The retailers will not increase the prices until the brands decides to do so,” says Arvind K Singhal chairman of Technopak, a retail consulting firm.

Source: Economic Times

Cash & Carry unhappy with Bloc terms

A high-level meeting to resolve the issue of granting a licence to Metro Cash & Carry failed to reach a consensus on Monday. While the state government claimed that the German giant had accepted most of the conditions imposed by the Forward Bloc-controlled APMC, company officials did not confirm it.

The Bloc is demanding that the German major should not be allowed to sell products less than Rs 5000 and the retailers, who will buy from the company, should have a licence from the Agricultural Produce Marketing Committee (APMC). The wholesale giant is, however, against these conditions.

To sort out the issues, a delegation of the company held a meeting with Chief Secretary Amit Kiran Deb at the Writers’ Buildings on Monday. Principal Secretary to the chief minister Subesh Das, APMC Chairman Naren Chatterjee and other officials of the agriculture department were also present at the meeting.

After the meeting, Das said the state government will sign a Memorandum of Understanding with the company on October 10. Chatterjee said the company has accepted five of the six conditions that were imposed by the APMC for granting a licence to the company. According to Chatterjee, the conditions were: Metro cannot sell any product that costs less than Rs 5,000; It will never enter into retail business in the state; If any dispute arises between the company and APMC, it will be decided only at a Kolkata court; The company will have to keep the APMC informed about the kind of commodities they will keep in their outlets; The company cannot go for contract farming; They will have to follow the APMC rules, failing which, their licence will be cancelled.

“We could not reach a consensus on the first condition but the company has accepted the remaining ones,” Chatterjee said.

The company, however, did not confirm that they have accepted the conditions. “Our discussions are going on. We can say anything only when a decision is taken,” Vishal Sehgal, head, corporate communications, Metro Cash & Carry, told The Indian Express.

The issue of granting licence to the German company had created a rift between the CPM, which favoured the granting of the licence and the Forward Bloc, which was against it.

Things came to such a pass that the Bloc had decided to withdraw its ministers from the state Cabinet. The issue was resolved at a Left Front meeting, when it was decided that the company would be issued a licence only if it accepted some conditions.

Source: Expressindia

Saturday, October 11, 2008

Enhancing the Retail Experience

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Are Indian retailers up for grabs!!!

Rosebys all set to enter India's home decor market

Global home fashion and lifestyle major Rosebys has kicked off its retail roll-out in India with plans to set up 650 exclusive stores by 2012 for which it has roped in Bollywood actor Soha Ali Khan as brand ambassador.

Two years after its takeover by the USD 700 million Gujarat Heavy Chemicals (GHCL), Rosebys plans to penetrate the estimated Rs 10,000 crore Indian decor market using the franchise route with 600-1,200 sq ft stores in all metros and Tier-I and II cities.

"We will start our Indian roll-out with 150 franchise stores within the next six months in all metros, Tier-I and Tier-II cities. Our plan is to set up 650 stores by 2012," Rosebys Chief Executive Officer Aloke Banerjee said.

He said the company is planning to invest Rs 250 crore in advertisement and brand building during the next four years. "We are aiming for a turnover of Rs 1,000 crore by end of the 2011-12 fiscal. Our vision is to emerge as a leader in the affordable luxury brand segment," Banerjee said.

The company has signed up Bollywood actor Soha Ali Khan as brand ambassador for its exclusive lines and collections.

Rosebys, which has 320 stores in the UK, is venturing into the Indian market with 75 design combinations prepared by its design houses in UK, USA and India.

Its product range include bed covers, bedsheets, towels, cushions, and adornments like photo frames, vases, candles, stainless steel ware and personal care products.

"To begin, we are introducing four broad lines with themes including Eco Chic, Geo Retro, Indulgence and Peony Garden," Banerjee said. "We are targeting the young women in 25-35 years age category for giving them an all-inclusive luxury home solutions at an affordable price," he added.

Source: Financial Express

Thursday, October 9, 2008

E-Shopping likely to go up by 180%: ASSOCHAM

In the wake of the recent terror attacks in major cities, e-shopping during the forthcoming festival season is likely to go up by 180 per cent in Delhi and other metros, according to an ASSOCHAM study.

Based on feedback from traders across the country, the study says the worst-hit would be footpath sellers, especially those who sell garments and household articles.

Also, during Dussehra and Diwali, white goods and bullion trade would in all likelihood not be as impressive as it was last year because little discounts to attract customers are being offered by consumer durables manufactures due to higher input cost. Inflation and loss of property and lives as a result of terror activities at various places have completely dampened the purchasing enthusiasm of common investors towards gold and silver.

According to feedback received by the Chamber secretariat in the past 10 days on buying trends, it has been found that because of security reasons e-shopping is going to grow by nearly 180 times in various metros including large townships like Lucknow, Chandigarh, Dehra Dun, Pune, Mumbai, Ahmedabad, Hyderabad, Chennai, Udaipur and Jaipur.

ASSOCHAM Secretary-General D. S. Rawat said through e-shopping in the month of October-November 2007, shopkeepers in major hubs of economic activity effected sales of number of articles to an extent of Rs.5,500 crore. Since, one keeps a record of e-transactions as these take place through the established banking mechanism, the figure is realistic and cannot be described as exaggerated. The ASSOCHAM expects this to go up between 175-180 per cent to touch levels of over Rs.15,000 crore, Mr. Rawat said.

Just as Delhi e-shoppers' population was 30 per cent in 2007-08, in Mumbai it was 28 per cent with maximum e-shopping taking place in electronic gadgets, apparel and design purchases, railways and gift items. The number in percentage increase for e-shoppers in 2008-09 would touch at least 50 per cent in case of Mumbai while in Delhi it is expected beyond 60 per cent. Products that will gain popularity in e-sale could include gems and jewellery, books, accessories, apparel, gift products, music and movies, hotel room besides tickets for transportation.

ASSOCHAM adds that most shoppers have shown satisfaction with e-shopping.
Other reasons for e-shoppers' number multiplying are because of factors such as home delivery which saves time, secondly `24x7' hours shopping with ease and availability factors for product comparisons.

Most products bought and sold through online comprise gift articles (58 per cent), books (42 per cent), electronic gadgets (41 per cent), railway tickets (39 per cent), accessories apparel (36 per cent), apparel (36 per cent), computer and peripherals (33 per cent), airline tickets (29 per cent), music (24 per cent), movies tickets (26 per cent), hotel rooms (20 per cent), magazine (19 per cent), home tools and products (16 per cent), home appliances (16 per cent), toys (16 per cent), jewellery (15 per cent), beauty products (12 per cent), health and fitness products (12 per cent), apparel gift certificates (10 per cent) and sporting goods (7 per cent).

Thirty-eight per cent of the regular shoppers are in the 18 to 25 age group, 58 per cent in the 26 to 35 age group, 18 per cent in 36 to 45 and 10 per cent in the age group of 45 to 60. Eighty-six per cent of the user base is educated with a Bachelor or Master degree.

Source: Gurgaon Scoop

Sunday, October 5, 2008

Enriching the shopping experience: Theme Malls

Guess what the growing wedding market has done to the retail business in the country. It has been able to create a successful business model — theme malls — which have been doing better than what retail malls are doing these days.

Theme malls such as Wedding Mall and Gold Souk (jewellery mall), catering to specific needs and occasions, have changed the dynamics of the Indian wedding bazaar.
And how? Delhi-based real estate developer Omaxe group is setting up India’s first chain of wedding malls. The first five wedding malls are coming up in Gurgaon, Agra, Ludhiana and Patiala at an estimated cost of Rs 1,000 to Rs 1,200 cr.

These malls will be a one-stop shop catering to all wedding-related needs of people, from designing and printing of invitation cards to buying honeymoon packages. The five malls will cover more than 9 lakh sq ft of space and the group plans few more in other cities.

Says Rohtas Goel, CMD, Omaxe Group: “These malls, besides all the wedding shopping, will also have banquet halls. The tenants will be a judicious mix of leading international and Indian brands and wedding-related service providers, including makers of bridal wear, clothing, jewellery, cosmetics, F&B, entertainment, decor, floral management, footwear, white goods, accessories, beauty parlours, wedding planners and leading travel agencies. The Omaxe wedding mall will take away the hassles of numerous visits to the market. The focus will be on maximising customer comfort and providing complimentary products under one roof.”

The wedding market in the country is growing at a whopping 20% per year and now people are looking at hassle-free and comfortable weddings.

Taking the shopping experience to a higher level, Gold Souk is India’s first mall dedicated to jewellery retailing, which is promoted by Aerens Gold Souk International. Besides Gurgaon, the Aerens Group will develop Gold Souks in Bangalore, Mumbai, Hyderabad, Ahmedabad Kochi, Jaipur, Ludhiana and Kolkata.

In fact, speciality malls are the places where consumers will go shopping since there will be more choice and variety under one roof. Since the concept is in its infancy, most people are not aware of the advantages. It’s only a matter of time before consumer preference shifts towards specialty malls, which are very popular in the West.

Says Anuj Puri, chairman & country head of Jones Lang LaSalle Meghraj: “With the retail market boom in India, we will slowly see a big emergence of speciality malls — first in major metros and then in other smaller towns. Popular categories in the international market include home-malls — that feature all kinds of home products ranging from tiles, fittings, furniture, or toy malls for kids.”

Source: Economic Times