Pure and Play: News on the sidelines

– Triumph to launch Hom and Valisere brands
Triumph has planned to introduce its high-end labels – Hom and Valisere – by end of this year, in India.
Speaking to Indiaretailing, Thorsten Allenstein, country head, Triumph, said, "The demand for our products in India has been growing, hence we are planning to launch two of our high-end brands in the country very soon."
Sharing plans about the expansion of Triumph stores in India, Allenstein said, "We have planned to open around 100 Triumph stores by next year." The company has already identified locations, and each store will be spread across 800 to 1,000 square feet.
Besides, the company is planning to partner other multi-brand retailers and is in talks with many companies. "We have spoken to many retailers to stock our products and are going to finalise our partner by end of this week," informed Allenstein.
– Around 70 new outlets from Vishal; loyalty card for women
Vishal Retail said it would open 70 more stores at a cost of around Rs 700 crore by the end of this year, taking the total number to 190, while playing down the chances of high inflation dampening its expansion plans.
"Inflation has made no impact on our growth plan. We are going to open 70 more stores by the end of the current year, and will invest Rs 700 crore for the purpose," Vishal Retail Chairman Ram Chandra Agarwal told reporters on the sidelines of Pure and Play.
The company is also looking to raise Rs 200 crore through a private equity investment for the expansion plans, while the remaining fund will be arranged through debt. "In order to fund our expansion plans, we are looking at a debt equity ratio of 2:1," Agarwal said. Vishal Retail is also planning to launch loyalty cards to attract customers, particularly women, besides introducing new brands in the womenswear category.

– Niknish to add 50 stores
Kolkata-based Niknish Retail plans to increase the number of its outlets to 65, from the present 15.
"In the next 18 months we plan to increase the number of stores to 65," Niknish Retail Vice-President Thomas Yasuda said on the sidelines of Pure and Play.

The company will operate through two major formats: the large ones, with an area of 10,000 square feet and above, and the smaller ones with an area of around 2,000 square feet.

– Proposed Rs 350 crore investment from Globus
Globus will invest Rs 350 crore for opening 74 new stores in the next 30 months, across India.
"Seeing the growth in the organised retail industry, we have planned to increase the number of outlets to 100 from the current 26 stores, in the next two-and-a-half years. This can entail an investment up to Rs 350 crore," Globus President Subhash Chhabra said on the sidelines of Pure and Play.
The entire investment will be funded through internal accruals, he added. To start with, Chhabra said, the company will add 15 stores in the current fiscal in tier I and II cities, including Nagpur, Kochi, Rajkot and Surat. All stores will be company-managed and open in shopping malls.

Thirty million cases of shoplifting go undiscovered: EHI study 18 Jun, 2008

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Thirty million cases of shoplifting go undiscovered: EHI study

18 Jun, 2008

Inventory discrepancies in the German retail sector as a whole add up to four billion euros annually, EHI observes in its current survey. Dishonest customers account for slightly less than 1.9 billion euros of the amount; retailers' employees are blamed for losses of around one billion euros. Statistically, each year each German household continues to steal goods valued at over 50 euros from retailers. To visualise, this means that about every 200th shopping trolley passes the checkout without being paid for. The state loses around 400 million euros in VAT revenues annually as a result.
Protecting merchandise costs dearly
To reduce so-called inventory losses, annually the retail industry invests an average of almost 0.3 per cent of its sales revenues, or around one billion euros. The cost of inventory discrepancies and their avoidance thus amounts to about five billion euros annually, which retailers have to include in their selling prices, like all other costs. Retailers continue to estimate the general crime threat as medium to high, with a rising tendency because companies anticipate an increase in crime in almost all areas next year.
‘Organised’ shoplifting is considered the biggest problem by chain store operators. In general, however, ‘ordinary’ customer theft is still the main problem. The further intensification of preventive measures will, therefore, be necessary.
No easing in sight
According to the official crime statistics of the German police for 2007, the number of cases of simple shoplifting reported to the authorities declined another 6.6 per cent from 428,553 to now 400,183. But retail's assessment of the current crime situation and the unchanged, high level of inventory losses indicate that there has been no easing of the situation on the shoplifting and theft front. Longer business hours, reduced staffing, reduced presence of detectives during retail opening hours are conducive to undiscovered shoplifting. An estimated 30 million cases of shoplifting involving goods worth an average 60 euros go undetected and unreported every year. Comparing 2007 with 2006, the inventory discrepancies in German retailing as a whole, averaging all sectors, remained on a constant level. An average inventory discrepancy of easily one per cent -- valued at selling prices and placed in relation to gross sales -- continues to reduce profit margins in retailing significantly.
Efficient theft prevention
The current offence rates substantiate the importance and necessity of the use of detectives and camera surveillance in the retail sector. At companies which employ detectives, even if only at selected outlets or only on a part-time basis, 71 per cent of all customer offences exposed are detected and reported by detectives. Although most companies do not have cameras throughout their stores, slightly less than 40 per cent of the offences discovered are discovered with the help of camera systems and image recording.
Taking part in the latest EHI study on the topic of inventory discrepancies were 122 companies with more than 12,000 outlets in all, representing estimated total sales of around 47 billion euros. The study was supported by HDE, the German Central Retail Association.

A Model to Turn a New Leaf in Indian Retailing - 3

India is one of the fastest growing economies in the world today. The country’s luxury market is the 12th largest in the world. The country’s retail sector must orient itself to meet the needs of this new mass-affluent market.
India can follow Emaar’s model of aligning mall developments with the emerging lifestyle communities. There are several master-planned communities being developed across the towns and cities of India, and these demand world-class shopping and leisure options for the residents.
Diversification in shopping malls is as important as diversification in the product industry. The Dubai Mall has redefined the horizons of shopping malls by navigating away from the traditional outlook towards shopping. In due time, this approach will be the true benchmark for the global retailing industry. India can take the lesson early.

A Model to Turn a New Leaf in Indian Retailing

In this scenario, the concept of neighbourhood retailing as promoted by Emaar Retail will become more significant. Emaar’s retail ethos is driven by one key philosophy: Deliver residents in its master-planned communities the services and products they need in a friendly ambience, and back it up with amenities such as parking and leisure choices.
There are several striking parallels between the retail sectors of India and Dubai. For one, the retail sector of Dubai was predominantly led by Indian traders – an association that goes back to several centuries. The evolution of Dubai’s retail sector as a truly world-class shopping destination was swift and phenomenal, and in this growth, shopping malls have played a key role.
Dubai’s shopping malls have removed the dichotomy of shopping and leisure, and created a perfect blend of retail and entertainment that appealed to families – both residents and visitors. The integrated lifestyle approach that drives the development of The Dubai Mall, the flagship development by Emaar Malls Group, can also serve as a referral point for India’s retail sector.
Emaar Malls Group – a subsidiary of Emaar Properties PJSC, which through a joint venture with MGF Land Development is the largest foreign direct investor in India’s real estate sector – has helped transform the look and feel of shopping malls. The operational philosophy of Emaar Malls Group is to design shopping malls as vibrant retail and leisure destinations.
The Dubai Mall, for example, is redefining the shopping and leisure experience with its rich array of components including the world’s largest indoor Gold Souk; one of the world’s largest aquariums featuring 33,000 living animals; an Olympic-size ice rink; an entertainment section including the region’s first SEGA indoor theme park; and KidZania®, an 80,000 square feet children’s ‘edu-tainment’ centre.
The Gold Souk is designed to reflect the rich Arabic heritage blended with the modern features of The Dubai Mall, and will showcase a collection of over 220 of the region’s most trusted gold and jewellery retailers. At the souk, gold and jewellery can be readily purchased or tailor-crafted. The aquarium, at 51m x 20m x 11m, will feature the world’s largest viewing panel measuring 32.8m in width x 8.3m in height. With the capacity to hold 10 million litres of water, the aquarium will illuminate the marvels of the ocean floor and showcase a diverse collection of marine life worldwide.
Other entertainment components at The Dubai Mall will include KidZania® and SEGA Republic. Kidzania is an award-winning children’s ‘edu-tainment’ concept that will be introduced to the region for the first time. It will be an 80,000 square feet interactive mini-city that combines play with learning. SEGA Republic is to be an indoor theme park focused on action, adventure, and entertainment. The two-level, 76,000 square feet adventure is being developed by Emaar Malls Group in partnership with SEGA Corporation.
This integrated approach works for India, too, especially given its current socio-economic shift. The growing middle-class population with high purchasing power continues to drive the retail sector in India. For them, shopping malls are becoming destinations for leisure – places where they meet with friends and families. Indian retail sector must take a cue from The Dubai Mall and create integrated shopping destinations.

A Model to Turn a New Leaf in Indian Retailing

A metaphor close enough to describe the dynamism of the Indian retail sector would be that of the Big Bang theory. Triggered by giant collision courses involving several thousand unorganised retailers occasionally rubbing shoulders against smart supermarkets, the Indian retail sector, following the years of heating and cooling, has evolved into a strong all-encompassing mass.
Today, topping the Global Retail Development Index for the third consecutive year as the most attractive market for retail investment, India has one of the most vibrant retail sectors in the world, where huge malls and supermarket chains co-exist with below-the-line traders.
Currently, there are 12 million retail outlets in India, which is estimated to triple by 2015. The 25 per cent projected increase in retail growth illustrates the strong fundamentals of the sector, which is expected to contribute to 22 per cent of India’s GDP by 2010. The fastest growing segments in retail are, not surprisingly, wholesale cash-and-carry stores, supermarkets, and hypermarkets. Shopping malls are another growth segment, with over 100 malls in the country now and over 600 malls under construction – mostly in Mumbai, Delhi and other A1-class cities.
One of the key challenges of the Indian market is to build organised retail. Concepts like franchising are only now gaining currency, and I recall the tremendous effort that had to be put in even in the late ‘90s to build a fashion retail chain through international franchises.
The mindset of the typical Indian customer, however, has shifted over the years. Today, global brands have high visibility and awareness among urban customers, who drive the organised retail sector.
This change was relatively slow and has only hastened now with the economy gaining momentum. Reports show that the retail sector grew from US$198 billion in 2001 to US$226 billion in 2005 – a modest 14 per cent growth. However, the organised retail sector grew by 93 per cent from US$3.96 billion to US$7.68 billion in the same period, though its share of the total grew modestly from 2 per cent to 3.4 per cent.
A paradigm shift is projected for the organised retail sector, which is one of the areas where Emaar’s retail expertise will make a difference. Emaar’s approach to retailing is not limited to developing big malls – as has been proven with The Dubai Mall, one of the world’s largest shopping and entertainment destinations.
Emaar’s approach to retailing, centred on its communities, will gain more currency in India with the numbers in the consuming class increasing. The high disposable income, gained from economic growth, has pushed the total number of households in the consuming class from 26.5 million in 2001-02 to 40.8 million in 2006-07. These are the consumers, who are also the end-users of the master-planned communities and residential colonies in India.
It is estimated that in the next three years, over US$560 million will be invested in retail sector expansion in the country – resulting in 50 hypermarkets, 305 large department stores, 1,500 supermarkets and 10,000 exclusive retail showrooms. At least one-third of the multi-brand outlets are projected to be converted to exclusive outlets.