 |
-
News by Month
-
News by Category
Tata’s Unlisted Unit Infiniti Retail Ltd Plans to Open More Small Stores
Infiniti Retail Ltd., an unlisted unit of India’s diversified Tata Group, plans to open more small stores this financial year as a real estate slowdown has made it difficult to get larger stores, its chief executive said. Infiniti Retail, which operates a national chain of multi-brand electronics stores under the Croma brand name, also plans to sell more products under its own label in a move to step up sales, Ajit Joshi told Dow Jones Newswires in a recent interview. The company has large stores that measure about 10,000 square feet-11,000 square feet on average and also smaller format Croma Zip stores.
Mr. Joshi said of the 21 new stores the company plans to open in the financial year that started April 1, 10-12 will be the smaller Croma Zip stores. Of the 31 Croma stores that the company now runs, only two are Croma Zips. “If you look at the Croma Zip strategy, we are looking at 2,500 square feet to 6,000 square feet stores,” Joshi said, adding that it is much easier to get smaller stores than spaces measuring 10,000 square feet. “The slowdown has hit the property business very badly. A lot of (spaces in) malls and (other) properties we had signed got delayed,” Mr. Joshi said.
He didn’t disclose the total investment planned on opening the new stores. While small-sized stores have the advantage of attracting low rents, Mr. Joshi said the company has also successfully negotiated for lower rents with a number of landlords for its existing stores across the country. Mr. Joshi said the planned new Croma Zips will be located at high streets and malls and even at airports. Infiniti Retail competes against pan-India players like the Videocon Group, Reliance Retail Ltd. and Pantaloon Retail (India) Ltd. and regional ones like Adishwar India Ltd. in the electronics retailing space. Mr. Joshi said the company plans to sell more private label products, which it introduced earlier this year, as it helped the retailer tide over the recent slump in consumer demand because it was able to sell these products at a discount to price-sensitive customers.
“In the next 18-24 months we are targeting 20% of our total sales should come from private labels,” he said. Private labels have better profit margins despite being priced competitively against bigger brands, and also help retailers differentiate themselves in a highly cluttered market, analysts say. Mr. Joshi said Croma’s private labels were priced as much as 10%-20% lower than other popular brands, but didn’t specify the company’s profit margins on its own brands. Croma, which has already introduced niche products like foot massagers and wine coolers as part of its private label business, plans more such products, Mr. Joshi said, adding a jewelry cleaner is next in the pipeline. Infiniti Retail, which sources its products from places like Hong Kong jointly with Australian partner Woolworths Ltd., also sells more mainstream products such as microwaves, airconditioners, table fans and laptop computers under its own brand.
“We plan to raise the tally of private label items to close to 100 before Diwali,” Mr. Joshi said, adding the company now sells about 44 products in this category. The festival of Diwali, which many Indians consider an auspicious time to buy consumer durables, will be celebrated in mid-October this year. He said sales at the stores had remained healthy in the past six months, and they are increasing as consumer sentiment improves. He, however, didn’t disclose any sales figures.
News Published Under: Real Estate India | No Comments »