Gateway Retail operates catalogue, stores and internet retail, under franchise from Home Retail Group.
The company's comments came close in the wake of its announcement last week to close down two of its stores in Mumbai and Jodhpur, respectively.
"We are in the process of re-negotiating rentals with many of our property owners and are looking at achieving 25-50 per cent reduction in rentals, in line with the downslide in realty prices," Vishal Retail Group President Ambheek Khemka told PTI. "We are also planning to relocate stores, which are economically not viable or whose rentals are more than market rates and resize others to make them more profitable," he said.
He said the company is undertaking a study to look at economic viability and rental state of all its stores.
"We are identifying stores to find out where we need to resize them, close down or relocate to some other location. The process will take some time to complete," he said. Vishal Retail's latest stand comes a few months after the retail giant cut down its turnover target to Rs 1,500 crore for the current fiscal, down from Rs 1,800 initially planned.
The company, which has currently around 185 stores, including hypermarkets and small-format stores across India, had clocked a turnover of just over Rs 1,000 crore in 2007-08.
When asked about plans to close down any more stores, Khemka said: "Not immediately. We will first finish the viability study and then look into the matter." He admitted that the company's stores, specially the ones in metros and Tier I cities, have witnessed reduction in footfalls and sales.
TxBusiness Standard
However, this time around, more consumers than ever are redeeming and entering promotions online. The latest figures from Nielsen Online show that those websites tapping into consumer concerns about the economy by giving opportunities to save money are the fastest-growing.
This includes portals for using promotional codes and e-vouchers for online shopping discounts, such as MyVouchercodes.co.uk.
It was Walkers Crisps, however, which claimed Nielsen's number one spot in June, with its web traffic figures growing by 2575%, as people visited its 'Brit Trip' site in droves to take advantage of the snack brands' on-pack offer of discounts on days out and holidays (see case study).
'When times get tough, promotions benefit, as brands take marketing spend from above-the-line activity to below-the-line to get instant results,' says Graham Howarth, director of sales promotion at integrated marketing communications agency P&MM. 'What's interesting, however, is that the credit crunch is not just about consumers wanting greater value for money. It is also driving audiences to look further for rewards that create the feel-good factor, or to replace goods and items they might have bought previously with their disposable income.'
P&MM has run value-added online and mobile promotions with Lipton Ice Tea, offering 'Ice Cool' holidays and breaks to global destinations such as Sri Lanka, Sweden and Santa Claus' Village in Lapland.
Txmm
Comet's owner, Kesa Electricals, plans to upgrade 15 of the brand's 250 UK stores by the end of the year, with the aim of converting a further 100 over the next five years.
The changes are intended to put pressure on catalogue retailers such as Argos.
Terry Duddy, chief executive of Home Retail Group, the owner of Argos and Homebase, recently claimed that Argos has overtaken Comet as the second-biggest UK consumer electronics retailer, following a 45% rise in the group's annual profits.
Comet also faces competition from US chain Best Buy, which will launch in Europe this year as part of a £1.1bn deal with Carphone Warehouse.
Txmm
LONDON: Coca-Cola has relaunched its online loyalty rewards scheme Coke Zone to make it easier to navigate and offer the consumer a richer media experience.
The website, which launched this time last year, claims the highest unique visitor numbers of any grocery brand website every month from October-to-December 2008, according Nielsen figures.
Carlson Marketing, the lead agency on Coke Zone, has designed the new site, alongside digital design agency Flourish, with Sapient responsible for web integration.
Tx:BR
The uber chic Triumph store spread over an area of almost 2000sqaure
feet, including the ground and mezzanine floor, is a statement in
international styling. It is not just the first Triumph standalone
store in Delhi, but in fact the first of its kind in Connaught Place.
The store is modeled on the lines of other Triumph international
stores across the globe. Done in white with red accents it exudes
warmth with its appealing European style wooden flooring. As soon as
you step into the store, its peaceful ambience engulfs you promising a
leisurely browsing experience. The store will showcase international
styles of Triumph including the sloggi range. With so many styles to
choose from, the store promises an exciting lingerie buying experience
for every category of Delhi's woman shoppers. To further enrich this
experience, Triumph has specially trained its all-woman staff at par
with international standards to give individual attention to customers
depending on their varying needs. The staff will help them select the
right fit and style from the vast range of Triumph's international
designs available for the first time in India through their standalone
stores.
Speaking on the occasion Mr. Thorsten Allenstein, Managing Director,
Triumph International (India and Sri Lanka), remarked, "After the
launch of Triumph's exclusive stores in Mumbai and Gujarat, we are
pleased to inaugurate our flagship store in the national capital. This
is our third stand alone store in India and through this retail
expansion we are now firmly entrenched in the Indian Lingerie market.
The Indian women specially the cosmopolitan crowd with their exposure
and experience of international brands have already been enjoying our
exclusive styles and perfect fits through various retail stores. Due
to our 100 years of experience and success, we are in a lucky position
to offer any bra from first to last, that a woman would wear. This
stand alone store in Connaught Place will only widen the Triumph
range, stocking many Triumph styles that were not available here
earlier."
In line with this marketing strategy for India, Triumph has already
set up a state of art technology plant in Tamil Nadu. Triumph is keen
on expanding its retail footprints in India by setting up its flagship
stores. Apart from the three standalone stores already set up in
metros, Triumph is looking at reaching its customer through opening
more stores in Tier I and Tier II cities also. Triumph has already
marked its presence in India through 700 'points of purchase' in
multi-branded stores across 60 cities in the country. About 95% of the
lingerie industry in India is unorganized and Triumph has a 34% share
in the organized lingerie industry. This gives Triumph a vast
opportunity to further tap the market and expand its base in India.
About Triumph International
Triumph International is one of the world's largest underwear
manufacturers. The company enjoys a presence in over 120 countries
with its core brands Triumph(R), sloggi(R), Valisère(R) and HOM(R).
Triumph employs more than 43,000 people and achieves a turnover of INR
16,000 crores.
TxBT
As part of the retail distribution agreement with Redington India, BlackBerry smartphones and service plans from supported carriers will initially be available in retail and modern trade outlets across nine cities. This includes Mumbai, Delhi, NCR, Hyderabad, Chennai, Bangalore, Kolkata, Pune and Ahmedabad. Redington intends to expand the retail footprint in a phased manner and will offer a wide range of BlackBerry smartphones beginning with the BlackBerry Pearl series, the BlackBerry Curve series and the BlackBerry Bold smartphone.
A slowdown in India doesn't seem to have so far weighed on the entry of international brands, mostly from advanced countries in the grip of recession.
A senior official in the ministry of commerce and industry said there has been greater interest among foreign brands to invest in India after an initial slow start in 2006. The government had allowed 51% FDI in single-brand retail in early 2006.
"India remains the most important destination for international brands outside their home markets due to its solid economic fundamentals and growth opportunities," said Benetton India MD Sanjeev Mohanty. Several marque brands in different segments, including fashion, apparel, footwear, watches, sportswear, sport equipment, luggage and home furnishings have entered India in the past two years either through joint venture route or licensing agreement with a local partner.
Fendi, Nike, Llardo, Rino Greggio, Damro, ETAM, Zegna and Lee Cooper were among the first to get FDI permission under the single-brand retail window. Premium fashion brands such as Armani, Dolce & Gabbana, Louis Vitton, Salvatore Ferragamo, sportswear retailer Puma, Lerros and S Oliver, luggage brand Piquadro, Marks & Spencer, La Perla, Jimmy choo and Toy Watch have also set foot in India. A few others like Diesel and Starbucks are waiting in the wings.
Meanwhile, there are several brands that have been waiting for the government to allow 100% FDI in retail. Furniture retailer Ikea says it will wait for the policy to change rather than choose a partner for its India entry. Most foreign companies would like to have complete control over their operation in India. And there have been instances, where joint ventures have withered as the two partners struggled for control.
Also, foreign brands may impose certain restriction on local partner that may cause business to falter. "In cases, where the local partner is expected to procure goods from overseas, chances of survival of joint ventures become slim. Imports make goods more expensive and thus makes business less viable," said Arvind Brands' CEO Suresh J.
In the short term, retailers feel a significant dip in rentals in malls and high street may actually encourage more brands to look at India. "Entry barriers seems to be getting reasonable owing to correction in real estate," says Mr Mohanty.
The brand has entered into an agreement with Zingari synonymous for being the distributor of state-made Cuban Havana cigars and cigar retailing in India. The first S T Dupont luxury retail outlet will be in launched in Delhi in the next 3-4 months and there will be a total of 8-9 retail outlets in India in the next two years.
Better known for its cigarette lighters, the iconic mens' accessories brand is seen in the movie Casino Royale where Bond is wearing the OO7 bullet cufflinks and carrying the Xtend James Bond Torch Flame Lighter from the house of S T Dupont.
The agreement will also see Indian skilled craftsmanship from Rajasthan being exported to Europe to cater to European tastes. Zingari will provide S T Dupont with skilled craft workmanship talent base in Rajasthan, where the latter will make limited edition products with Indian craftsmanship having a European design. The craftsmen will work on designs by S T Dupont for lighters, cufflinks, and other accessories that will be featured in global S T Dupont stores.
Fourth quarter pre-tax profits rose 9pc to $1.4bn as the company benefited from consumers trading down in the face of the economic crisis.
However, quarterly revenues fell 3pc to $5.6bn as the fast food chain was hit by the strength of the dollar.
Growth accelerated in the fourth quarter, with same-store sales 7.2pc ahead, fuelled by strong growth in Asia, the Middle East and Africa where revenues were 10pc ahead year-on-year. In Europe same-store sales grew 7.6pc, while the US saw a 5pc increase.
Full year revenues rose 3pc to $23.5bn while pre-tax profits were up 72pc at $6.2bn.
McDonald's, which has a market value of $66bn, said it had returned $5.8bn to shareholders in 2008 via dividends and share buybacks. The company increased its fourth quarter dividend by 33pc to 50 cents a share.
The company has returned $11.5bn to shareholders since the beginning of 2007, in line to meet its target of a $15bn to $17bn return by the end of 2009.
Chief executive Jim Skinner welcomed the strong results. "McDonald's begins 2009 with six years of momentum, a business model that has delivered even in challenging economic conditions and January sales that remain strong," he said.
McDonald's shares fell 1.37pc to $56.65 in early trading.
Tx:telegraph
The company had to shelve retail plans because the government declined to support it by subscribing to oil bonds. These bonds are key to the survival of the three government-owned companies that control the fuel retail market — Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum — and sell petrol, diesel, kerosene and LPG at subsidised prices.
Without oil bonds, it is not possible for public or private players to compete with these three companies. Lat year, Reliance Industries decided to close two-thirds of its 1,400 petrol pumps around the country citing unfair price competition from the government-supported giants.
MRPL operates a 9.69 million tonne refinery at Mangalore in Karnataka.
Other players with fuel marketing rights include Reliance , Shell, Essar, ONGC and Numaligarh Refinery. Like MRPL, several are planning a re-entry.
Tx:Business Standard
Times are tough for retailers, as the failures of Circuit City, Mervyns and Linens 'N Things attest. And that pain is translating into headaches for their landlords.
Owners of shopping centers are expected to see a jump in vacancies and declining revenue as even more stores shut down after a dismal holiday shopping season.
Holiday sales can amount to as much as 40 percent of annual revenue for retailers, and sales fell 2.8 percent this past season.
For those retailers still in business, many are seeing revenue shrink as financially strapped consumers spend less. So now some are trying to renegotiate rents with landlords to cut costs.
That puts pressure on landlords who already may have seen substantial revenue reductions from the loss of other tenants such as Circuit City, which went bankrupt in November. The company said this month it would close its remaining 567 stores nationwide.
In San Diego County, the collapse of Circuit City, Mervyns and Linens 'N Things put roughly 1 million square feet of retail buildings on the market. The three chains had a total of 25 stores in the county.
Yet despite the store closures, the news isn't all bad for the owners of San Diego retail centers. The ones in the best locations are attracting the attention of the handful of retailers still in expansion mode.
"We don't have a lot of big boxes that become available," said Reg Kobzi, a senior vice president with CB Richard Ellis. "Even in this economic climate, there are tenants willing to backfill those if they're in great locations."
Department store chain Kohl's, for example, recently assumed the leases of three former Mervyns stores in San Diego County – one in the College Grove Shopping Center, another in Mira Mesa and a third at an undisclosed location, according to bankruptcy court records.
In addition, the former Linens 'N Things building in Carmel Mountain Ranch reportedly has offers from three or four prospective tenants for the roughly 70,000-square-foot structure, according to brokers.
A Circuit City store soon will be available in the same shopping center, and a Mervyns is available next door.
RPG Enterprises' retail arm Spencer's Retail is continuing with its Rs 1,500 crore expansion plan, envisaged for the next two years, despite the economic slowdown.
The company, which said it planned to open 400 new stores in the next two years, is eyeing Rs 1,250 crore sales turnover by the end of the current financial year. "We are continuing to expand (our business) with more and more stores, including hypermarkets. We will open as many stores as necessary and wherever they are required. Our expansion will continue," Spencer's Retail President Vineet Kapila told media.
Last November, Spencer's Retail announced a Rs 1,500 crore expansion to add 400 more stores by the end of 2009-10 fiscal. It was planning to set up stores across the country, including Tier II and III cities. The company has currently 350 stores across India, including 34 large format hypermarkets.
Stating that current economic slowdown has not affected the company's operations as it deals with mostly essential items, he said: "Our main items of retailing are FMCGs, fruits and vegetables."
Asked about the company's profit margin, Kapila said:"The profit margin is not very big but the retail business is more about managing costs. We have been successfully managing our costs."
