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Archive for February, 2009

Krishna Group to expand retail chain

Posted by retailigence on February 13, 2009

New Delhi (PTI): Diversified business player Krishna Group is planning a Rs 150 crore investment for its apparel and accessories retail chain, The Grab Store, to give it a pan-India presence and add 20 more outlets during 2009.

The retail chain, which currently operates six outlets located in Mumbai, Rajkot and Baroda, is also aiming for 50 stores nationwide during the next three years and plans to enhance its private labels, besides having more branded products.

We have currently six outlets, including four in Mumbai and one each at Rajkot and Baroda. We have set a target of 50 stores nationwide during next three years, and as part of this, we are planning to invest Rs 150 crore during 2009 for opening 20 new stores,” The Grab Store Chairman Sanjay Tayal said. He said investment would come from internal accruals and partly by means of debts.

“We are focusing on both metros and non-metros for expansion and our target cities include Vapi, Nagpur, Delhi, Hyderabad, Kolkata, Chennai, Kolhapur and Silvassa. Our stores would be 5,000-30,00 sq ft in size,” Tayal said. Most of the new outlets would be company-owned. Among the existing six outlets, four are company-owned and the rest two franchise operated.

Sources :- The Hindu


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Biyani’s home solutions raise Rs 150-cr through rights issue

Posted by retailigence on February 13, 2009

MUMBAI: Kishore Biyani-led Home Solutions Retail (India) along with its two investors, ICICI Ventures Funds Management and Kotak SEAF India Fund, has raised Rs 150-crore via a rights issue to fuel its expansion programme.

“We have raised Rs 150-crore through a rights issue along with ICICI Ventures Funds Management and Kotak SEAF India Fund. We completed it just yesterday,” Future Group founder and Chief Executive, Mr Kishore Biyani said here on Friday.

The proceeds would be used to fuel the company’s expansion in the home-building and improvement merchandise, furniture and consumer durables segments, Mr Biyani said.The company plans to set up more stores in home retailing under its existing formats – H ome Town, Electronic Bazaar, Furniture Bazaar, Collection I and eZone.

Launched in 2006, Home Solutions Retail is a subsidiary of BSE-listed Pantaloon Retail (India), which owns a 76.38 per cent stake in Home Solutions. ICICI Ventures Funds Management and Kotak SEAF India Fund hold about 15 per cent and six per cent stake e ach, respectively, in the company.

Biyani did not disclose any other details about the issue, including the number of shares bought by the two investors individually.

Sources :- Business Line

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Leather exports up in H1; 30% fall seen in coming months

Posted by retailigence on February 13, 2009

chennai: Export of leather and leather products registered a significant increase during April-September 2008 but the export scenario is expected to become grim in the coming months owing to economic meltdown.

The export of leather and leather-based products stood at Rs 8,524.73 crore during April-September 2008 and registered a 19.97% rise in rupee terms and 14.80% in dollar terms compared to the same period last year. The export in the first half has touched 49.89% of the target $4,000 million for 2008-09. But exporters and industry organisation allay fear that the target would be missed by about 30% due to crisis.

Export of finished leather increased 1.77% during the first half of this fiscal at $409.12 million, footwear gone up 16.15% at $ 6,66.72 million, footwear components raised 6.91% at $151.06 million, leather garments up 29.18% at $225.25 million and leather goods recorded a 26.16% rise at $467.58 million.

Captains of leather industry have observed 20-30% reduction in export orders. It started declining in November and continued in December and is further expected to aggravate in the coming months. Chairman of council for leather exports (CLE) Habib Hussain said, “We have never seen in living memory a crisis of this magnitude. Nobody is sure of anything. Existing scientific parameters to assess the market demand and sales projections are not working.”

He said the dominant markets for the Indian leather products are Europe and the US. There has been a dramatic fall in retail business in these countries affecting exports from the manufacturing countries. “There was also an opportunity amid this crisis to be innovative and different and we need to upgrade our leather, introduce new designs for products at cheaper prices,” he added. The government also has to step in with relief and promotional packages, Hussain said.

Leather manufacturers and exporters association head Rafeeq Ahmed said the Tamil Nadu government is not yet aware of the seriousness of the problem faced by the export-oriented industries. “Proactive and creative steps are needed from the government and industry to face this situation. We have to create excellent and economic products that can sell and it has to be done immediately. For this industry has to be given a lot more government assistance,” Ahmed said.

Finished leather manufacturers and exporters association president Zackria Sait said the tanning industry was the first to be hit by the global meltdown. Capacity utilisation in tanneries had come down to 80% by November 2008. It fell further to 40-30% by January 2009. The industry has factored in 20-30% cut in orders and exports. “If the actuals are going to be bigger than this, there will be greater problems for the industry and workers,” Sait said.

Mohan Srinivas, a leading garment exporter said there had been a turnaround in the exports of leather garments in the early months of this fiscal. Introduction of new designs and new products might have helped this, he said.

While many feel closure of large number of leather garment factories in China is one of the major reasons for the rise in leather garment exports form India.

Sources :- The Financial Express

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Organics mkt growing in India despite slowdown

Posted by retailigence on February 13, 2009

CHENNAI : The organic market in the US and Europe may have taken a hit because of the slowdown, with growth rate down to 5% in 2008 from 25% the previous year. But it is still growing in India say regional as well as national players, including Fabindia and Hyderabad-based 24 Letter Mantra, albeit at a slow rate of 10-12%.

“We have not witnessed a significant change in the pattern (in the last few months)… The demand is on the rise… The potential is tremendous and we are developing our supply base to keep up with the demand,” Fabindia communication head Prableen Sabhaney told ET. The ethnic retail chain has some 120 SKUs including cereals, spices, honey, preserves and herbs.

There has been no obvious change because of slowdown, says VR Ananthoo of reStore in Chennai, an organisation that initiates farmers into organic produce and helps them sell. “Growth has always been slow but steady at around 10-15%. There has been no cut-back in spend by regular customers as they probably look at spending on organics as medical insurance.”

Players are bullish on the potential of the domestic market and have introduced a slew of products in the last few months. Hyderabad-based Sresta Bioproducts, which retails its brand 24 Letter Mantra through Spencer’s retail chain throughout the country, introduced ready-to-eat products and fruit juices. Fabindia added a range of soups to its kitty in January and is working on muselis and flavoured pastas for introduction soon.

“India has a Rs 1,000 crore market available immediately,” Sresta Bioproducts managing director Rajashekhar Reddy Seelam said, quoting from a International Competence Centre for Organic Agriculture report. He went on to add that in the next decade or so 3-5% of the $116 billion food industry in India would turn organic.

Pricing is one factor due to which organic products, which are 15-40% more expensive than their regular counterparts, do not have immediate acceptance. But returning NRIs and expats have given a boost to organic sales, says Gomathi Viswanathan of Enfield Agrobase, which has 200 acres under organic cultivation and gets 65% of its revenues from exports.

The hospitality industry too has started taking interest in this segment, with client requesting organic items. “Supply issues have to be considered before incorporating anything on the menu as we cannot turn away a request for a dish because the items are not available on the particular day,” Radisson GRT vice-president Vikram Cotah told ET. He went on to add that every now and then they put temporary organic menu cards with limited varieties on tables. Market research firm Euromonitor International estimated the global market for organic food and beverages to be $22.75 billion in 2007, 45% of which is in the US. In India, the fragmented, yet niche, market is estimated to be a minuscule Rs 100 crore.

Varun Gupta of Bangalore-based Pro Nature, which sells its products through retail chains like Total, Namdhari’s, Reliance Fresh and Food World, said the organics market is small in India since most early entrants did not tap into the domestic market and went the export way. But now, many had realised the potential in India. “We don’t believe organics need address a niche client base. But prohibitive costs keep potential customers away. In the long run, I do see organics becoming more mainstream.”

Sources :- The Economic Times

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Style accessory co Belkin sees Rs 1,000 cr India biz

Posted by retailigence on February 13, 2009

THIRUVANANTHAPURAM: US-based digital lifestyle assets and interconnectivity solutions provider Belkin
, which recently entered the Indian market, is targeting a business of Rs 1,000 core within five years.

Belkin country manager for India, Mohit Anand told ET that the privately-held $ 1.3 bn company founded in California was extremely bullish on India. “We believe this is the best time to launch in India, considering that India’s prospects over the long-term are very good and the size and scale of the market is also promising”, Mr Anand said.

The company is targeting 10,000 retail stores across the country, with a near-term target of tapping 31 cities within the next 18 months. Belkin is betting on a range of affordable and utility accessories that are expected to appeal to the youth in making fashion statements with their gadgetry. The company has a range of digital lifestyle products facilitating dynamic connectivity and content distribution across TV, mobile and computer screens, enabling seamless interconnect between various consumer electronic and IT devices.

Among the products that the company hopes will appeal to the Indian youth is RockStar, which enables users to connect up to five headphones and iPod for sharing and mixing songs, and works with different portable media.

Mr Anand said the company would consider developing products that were India-specific based on specific tastes of Indian consumers, adding that tier-2 and tier-3 cities seemed to be showing high aspiration levels, suggesting a good market for lifestyle accessory makers in the technology domain.

Sources :- The Economic Times

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Subhiksha not to declare bankruptcy

Posted by retailigence on February 13, 2009

New Delhi: Cash-strapped retail chain Subhiksha Trading Services on Monday ruled out declaring bankruptcy and said it may consider selling stake to raise funds as it struggles to arrange Rs 300 crore to meet immediate operational requirements.

The company is currently undergoing a corporate debt restructuring (CDR) exercise with lenders reviewing its books. “No, not at all, as that (declaring bankruptcy) is not a solution. We have a viable business which is cash-starved and CDR will help us revive this,” Subhiksha Trading Services Managing Director said.

He said the company, which has a total debt of around Rs 750 crore, may have to look to the equity route to raise money in order to find cash for preventing the company from stopping its operations. “If there is no money, we can’t run operations but if there is no debt, we have to look at options like equity,” he said.

The company’s lenders, including 12 foreign and Indian private sectors banks, have sought a review of its balance sheet to speed up fund raising process.

“As part of CDR, the banks would need to get a current balance sheet rather than a March 31, 2008 balance sheet and they also want to ensure that events of the kind that happened in the last three-four months do not recur,” he said.

The company would be able to raise Rs 300 crore, required for meeting operational expenses, only after completion of the CDR process, Managing Director R Subramanian said. “We are coordinating this review as this helps us as well… We are wholly part and parcel of this review and the idea is to ensure that the revival plan (for the company) is well crafted with learnings from the review,” he said.

The company’s accounts are audited till March 31, 2008, and a review would take into account the period after it. On the issue of payment of employees and property owners, he said the company was “trying for emergency cash”.

Subhiksha’s operations have come to a standstill for the past few weeks due to non-payment of employees salaries, huge debt burden and arrears to suppliers, and the company is seeking liquidity infusion to the tune of Rs 300 crore to revive its operations.

In many parts of the country, the company’s stores and warehouses have been subjected to vandalisation and ransacking by unidentified elements for the past one week. Subhiksha had expressed helplessness in the matter saying non-payment of dues to security agencies have left its assets unguarded and vulnerable.

Subramanian said the company is taking steps to protect its stores and assets but it has been crippled due to shortage of staff.

Sources :- The Financial Express

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Bharti-Wal-Mart to expand cash-and-carry chain

Posted by retailigence on February 13, 2009

New Delhi: Bharti Enterprises, in its joint venture with global retail giant Wal-Mart, plans to expand its chain of cash-and-carry stores in the country by opening three more outlets in the current calendar year.

The company will open these outlets, named BestPrice Modern Wholesale, in Chandigarh and Amritsar, while the third location is not yet finalised by the company. “One store (each) will come up in Chandigarh and Amritsar, while the location of the third is being looked at,” Bharti Enterprises managing director Rajan Mittal said.
The company already has a store in Ludhiana, Punjab. While acknowledging that major retailers in the country are facing liquidity crunch, he said, there is no slowdown in the industry as a whole. “There is no roll back on our 2009 retail expansion plan,” he added.

Sources :- Mint

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Foreign investment norms for retail to stay: Kamal Nath

Posted by retailigence on February 13, 2009

NEW DELHI: The government has rationalised the foreign investment norms as there is a tightening in the global markets, but the cap on such investments in single-brand retail would continue, Commerce Minister Kamal Nath said here Thursday.

“The government has rationalised calculation of FDI (foreign direct investment). Because of this, there will be further inflow of investment in India,” Kamal Nath told reporters on the sidelines of the India Carpet Expo.

The minister, who inaugurated the four-day exhibition here at Pragati Maidan, however stated that the 49 percent cap on foreign investment in single-brand retail would continue and that there would be no change in sectoral limits. “That position will not change and will remain.”

Foreign investment in multi-brand retail is not allowed in India. “I believe the government will do whatever is possible to prop the economy,” he said, while insisting it would ensure the new foreign investment norms are not misused.

Referring to the slowdown in the US and Europe, Kamal Nath asserted: “But we will be able to maintain a GDP growth at 7 percent.” The carpet expo, organised by the Carpet Export Promotion Council (CEPC), was also attended by Minister for Textiles Shankersinh Vaghela, Commerce Secretary G.K. Pillai and Textile Secretary Rita Menon.

Buyers from the US, Britain, Germany, France and Australia are expected to visit the expo, said CEPC chairman Ashok Jain.

Sources :- The Economic Times

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