Pantaloons Retail(india) Ltd.

A Retail Marketing Project PANTALOON Retail (India) Ltd

Submitted to:-

Prof. Sujit Sengupta

Submitted By:-

Abhineet Gaurav Arshita Srivastava Ekta Shukla Sourish Sengupta Varun Suri

ACKNOWLDGEMENT We would fail in our dream of making this project the best if we do not acknowledge the most loving care and co-operation enjoyed by us, all through the working on this project. We take this as an opportunity to express our sincere gratitude to Prof. Sujit Sengupta and Mr. Udyan Chauhan, floor manager, “pantaloons” at Vaishali in Ghaziabad.Their guidance has always been of immense help and support during the making of this project and also helped us a great deal in enhancing our skills in the process. We also thankful to all the employees of ‘Pantaloons’ who helped us in making our project, their guidance carried us all through the preparation of this project. We would like to thank our college, IILM INSTITUTE FOR HIGHER EDUCATION for providing us with the excellent opportunity of working on this project and for guiding us all through the way. It gave us all immense pleasure in embedding deep into the project and acquiring new knowledge on the way. We would like to extend our heartfelt gratitude towards the various websites and the books we referred to. Without them the project would not have been possible.

Abhineet Gaurav Arshita Srivastava Ekta Shukla Sourish Sengupta Varun Suri

Pantaloon Retail (India) Limited

Pantaloon Retail (India) Limited is India's leading retailer that operates multiple retail formats in both the value and lifestyle segment. Pantaloon has ushered a retail revolution in India and its founder Kishore Biyani is known as India's "King of Retail". Pantaloon's headquarter is in Mumbai. The company currently operates over 5 million square feet of retail space and has plans to increase it to 30 million sq. ft by 2011. Pantaloon has plans to open over 3000 new stores by 2010. Pantaloon’s fast pace of growth in retail shelf space will continue over the next few years. The company will add about 1m sq of space in each of the next two years. The company aggregate capex over the next two years is about Rs 1.5bn and its gearing may increase to 1.5-2.0. Management is seized of the fact that delivering on the promised schedule of store openings and management bandwidth to manage this growth are critical challenges ahead. To cope, the company has strengthened the second line of management and is beefing up its systems and processes. Pantaloons brisk growth in the last one year has been in value retailing (Food Bazaar and Big Bazaar). Pantaloon is the only retailer in the country to have demonstrated success across multiple retail formats viz. Pantaloons-the departmental store, Big Bazaar-the food and grocery store. Post establishment of its business model it is planning rapid scale up.

Pantaloon – is the leading retail company in India today. Currently 42 stores located in seventeen cities, more stores are slated to come up in yet other cities across different zones. Within existing cities, more stores are being launched through the different formats that the company specializes in (Pantaloons, Big Bazaar, Food Bazaar, Central). While the Pantaloon is the original apparel store, the Big Bazaar is the discount hypermarket and Food Bazaar is, of course, for grocery and edibles. Central is India’s first seamless Mall which was opened in Bangalore in May 2004. The company’s growth has been by strategy and design. The format strategy proved to be a huge success. However, the growth was not restricted only to formats and it has added significantly to its existing retail space. In 2002– 03 the retail space stood at 0.56 million sq feet, currently it has crossed 1.1 million sq feet. As per the space sign till date, the company expects to cross a whopping 3 million sq feet in the next two years. The impressive performance of the company is reflected adequately in the financial results of the company. The turnover increased from Rs 444.83crores in 2002–03 to Rs 658.31crores in 2003-04, while the net profit increased from Rs 11.41crores to Rs 19.78crores. The future plans of the company remains focused on growth. In fact, the frenetic pace with which the company is growing should make it shortly touch its target turnover of Rs 1000crores. A special strength of the company has been to recognize the changing dynamics of the Indian market in the coming years. It has gone beyond the existing boundaries and implemented a more holistic approach in their strategy. They are now following a multi pronged approach, which comprises geographic strategy, product strategy, customer experience strategy, communication strategy and margin strategy. Pantaloon has the status of being an anchor tenant in India. As the country witnesses a mall-making frenzy (250 nos. in the building process), the company is able to get bigger and better deals from the property dealers and builders. As a matter of fact, the company aims to improve its margin through various means. With established formats and increasing retail space, it is in position to bargain better and source directly from the manufactures. It has also stepped up momentum on the private label front. In addition, to almost doubling the existing private labels in Pantaloon; it has launched in-house label in both Big Bazaar and Food Bazaar. The total numbers of private label is now almost 50. This has resulted in more variety low price for the customers. Since Pantaloon has a vertically integrated structure and manufacturing expertise – it is poised to reduce the current time to market and launch cutting edge fashion, which will have a positive impact on the existing margins. In the last decade, Pantaloon came to be known as India’s family store. The latest demographic studies indicate that India’s Population is getting younger. Pantaloon now plans to be more relevant to the younger consumers and will position itself differently in terms of identity, merchandise, and retail concept. According to the principal partner of KSA Technopak, a leading retail consultancy firm, Mr Harminder Sahni, “To continue opening stores at the rate at which he is doing without being exhausted, is something most players in this sector have not been able to

manage.” Says the retail market watchers: pantaloons will be the Indian equivalent of Spanish fashion retailer Zara. Pantaloon Retail (India) Limited was incorporated as Manz Wear Private Limited by Kishore Biyani on 12 October 1987, converted into a public limited company in September 1991, renamed as Pantaloon Fashions (India) Limited a year later and thereafter into Pantaloon Retail (India) Limited in July 1999. The company is headquartered in Mumbai. Mr Kishore Biyani is the Managing Director Pantaloon Retail (India) Limited, is India’s leading retailer that operates multiple retail formats in both the value and lifestyle segment of the Indian consumer market. Headquartered in Mumbai (Bombay), the company operates over 10 million square feet of retail space, has over 1000 stores across 61 cities in India and employs over 30,000 people. The company’s leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a uniquely Indian hypermarket chain, Food Bazaar, a supermarket chain, blends the look, touch and feel of Indian bazaars with aspects of modern retail like choice, convenience and quality and Central, a chain of seamless destination malls. Some of its other formats include, Depot, Shoe Factory, Brand Factory, Blue Sky, Fashion Station, aLL, Top 10, mBazaar and Star and Sitara. The company also operates an online portal, futurebazaar.com. A subsidiary company, Home Solutions Retail (India) Limited, operates Home Town, a large-format home solutions store, Collection i, selling home furniture products and E-Zone focussed on caterng to the consumer electronics segment. Pantaloon Retail was recently awarded the International Retailer of the Year 2007 by the US-based National Retail Federation (NRF) and the Emerging Market Retailer of the Year 2007 at the World Retail Congress held in Barcelona. Pantaloon Retail is the flagship company of Future Group, a business group catering to the entire Indian consumption space.

Future Group

Future Group is one of the country’s leading business groups present in retail, asset management, consumer finance, insurance, retail media, retail spaces and logistics. The group’s flagship company, Pantaloon Retail (India) Limited operates over 10 million square feet of retail space, has over 1,000 stores and employs over 30,000 people. Future Group is present in 61 cities and 65 rural locations in India. Some of its leading retail formats include, Pantaloons, Big Bazaar, Central, Food Bazaar, Home Town, eZone, Depot, Future Money and online retail format, futurebazaar.com. Future Group companies includes, Future Capital Holdings, Future Generali India Indus League Clothing and Galaxy Entertainment that manages Sports Bar, Brew Bar and Bowling Co. Future Capital Holdings, the group’s financial arm, focuses on asset management and consumer credit. It manages assets worth over $1 billion that are being invested in developing retail real estate and consumer-related brands and hotels. The group’s joint venture partners include Italian insurance major, Generali, French retailer ETAM group, USbased stationary products retailer, Staples Inc and UKbased Lee Cooper and India-based Talwalkar’s, Blue Foods and Liberty Shoes. 1. Company profile:

Registered Office

Knowledge Mr. KishoreHouse, BiyaniShyam Nagar Managing Director Mr. Gopikishan Biyani Wholetime Director Mr. Rakesh Biyani Wholetime Director Mr. Shailesh Haribhakti Director Mr. S. Doreswamy Director Dr. Darlie Koshy

INDUSTRY OUT LOOK Industry Evolution •

Traditionally retailing in India can be traced to

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The emergence of the neighborhood ‘Kirana’ stores catering to the convenience of the consumers

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Era of government support for rural retail: Indigenous franchise model of store chains run by Khadi & Village Industries Commission

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1980s experienced slow change as India began to open up economy.

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Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw the emergence of retail chains

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Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches

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The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers.

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For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books.

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Post 1995 onwards saw an emergence of shopping centers,

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mainly in urban areas, with facilities like car parking

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targeted to provide a complete destination experience for all segments of society

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Emergence of hyper and super markets trying to provide customer with 3 V’s - Value, Variety and Volume

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Expanding target consumer segment: The Sachet revolution - example of reaching to the bottom of the pyramid.

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At year end of 2000 the size of the Indian organized retail industry is estimated at Rs. 13,000 crore

Retailing formats in India ○ Malls: The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts. Ranges from 60,000 sq ft to 7, 00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment; all under a common roof. Examples include Shoppers Stop, Pyramid, Pantaloon. ○ Specialty Stores: Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG's Music World and the Times Group's music chain Planet M, are focusing on specific market segments and have established themselves strongly in their sectors.

○ Discount Stores:

As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies.

Core Target Audience:Typically a 30 year old guy who works and lives in the city. He buys clothes because he’s fashion-conscious, without being a slave to fashion. He enjoys nice clothes because he likes to be comfortable and look appealing. Pantaloons, as an international brand, has to adapt to this guy's specifics (where he spends his money, whether he has a lot of money or a little, whether he’s large or small, whether or not he likes to be given advice, whether he likes such and such style, colour and whether he has a preference for casual, sportswear or city wear). Product:Specialists in men’s ready-to-wear, Pantaloons offers its customers trousers, shirts, sweaters, tshirts, polo-shirts, suits, jackets, belts, ties and boxer shorts. A fashion collection reinterpreted every season in order to remain the most innovative, structured around our three categories Sportswear, Casual and Business. The brand is retailed through exclusive brand outlets (EBOs) and select stores of Pantaloons and Central. Brand Factory

Brand Factory hosts several Indian and International fashion brands including Levis, Pepe Jeans, Dockers, Wrangler, ProVogue, Arrow, Nike, Adidas, Reebok, Louis Phillip, Allen Solly, Reid and Taylor, Gini and Jony amongst others. Pantaloons Brand Factory brings to the Indian consumers the promise of revolutionizing value shopping by offering the best Indian and International brands at Smart Prices

Pantaloons Brand Factory promises its customers that value shopping is not about seconds’ experience, it’s not about a garage sale environment and it’s not about buying cheap. Instead, it’s all about an amazing experience of ‘Buying Smart’. The thought behind Brand Factory is to raise the bar of expectation and experience when it comes to ‘Brand + Bargain Shopping’. Over the years Factory Outlets have become distinct shopping destinations with distinct audiences. With fashion cycles reducing, larger quantities of stocks are reaching factory outlets. But then what gets compromised in the process is the brand and its image. The emphasis at Brand Factory is to offer the customer the widest range of brands and categories possible at absolutely great prices, in an ambience that befits the brand. Brand Factory presents the brands in a fully air-conditioned, slick environment varying between 70,000 to 1,50,000 square feet. The stores offers a wide range of products including apparels for men and women; infant wear; accessories; cosmetics; footwear; sportswear, luggage; home linen and much more. Pantaloon announced launching of a series of value stores--brand factory across the country offering fashion brands at factory prices. The first of the four shops would come up in Bangalore shortly with the others being planned in Hyderabad and Ahmadabad, Mr. Vishnu Prasad, President South and CEO Central and Brand factory told newsmen here today. By 2010 around 55 outlets would be operational in 40 cities across the country he added. Brand Factory brought to consumers the best brands that India and the world has to offer at discounted prices, without compromising on the shopping experience. The brands would be presented in a fully air-conditioned slick environment spanning 60,000 to 100,000 sq ft. Over the years factory outlets have become distinct shopping destinations covering distinct audiences. All top notch brands for all sections of people would be present at the brand factory outlets.

BRANDS The complete list of retail brands created and promoted by Pantaloon Retail India Ltd across various retail segments. FASHION: Pantaloons, Central Big Bazaar and Fashion Station FOOD: Food Bazaar GENERAL MERCHANDISE: Central Malls and Big Bazaar SPECIALITY RETAILING: All , Blue Sky HOME: Home Town, E-Zone, Furniture Bazaar, Electronics Bazaar, Collection I and Mela BOOKS AND STORES: Depot COMMUNICATIONS: M- Zone and Converge M WELLESS: Star and Sitara E-TAILING: Futurebazaar.Com FOOTWEAR: Show Factory LEISURE AND ENTERTAINMENT: Bowling Co, Rain, Bollywood Café, Chamosa, Fuel, Sports Bar, Food Stop and Your Kitchen.

PANTALOONS RETAIL MIX PRICING They believe in democratizing their services and charging a fair price. The idea is to set new benchmarks for pricing in this segment, Pantaloon Retail India CEO-Pantaloons, Sanjeev Agrawal said that the company has taken a conscious decision to reduce product prices at Pantaloons to that of two years ago. “This will build a value-for-money proposition for consumers and will help to grow sales. Even the new private labels will have a similar pricing strategy,” he said. Store Design and Display Pantaloons grocery department called food bazaar. In the grocery segment the store has good product mix. Here each racks are placed in such a way so that consumers can easily take their wanted products. Pantaloons have their own in house brands in Apparel as well as different sections Pantaloons visual merchandising is creative, innovative and outstanding which can be seen from its own in house private brands such as John Miller. All the merchandise are placed at both 360 degree and 180 degrees. The new launched products are showed by prominent color back ground. Window display is highly interactive for impulsive buyer

Merchandise Assortment They are characterized by a broad variety, deep assortment. Its leading brands are John Miller, Annabelle, T- 2000, Ajile, Scotsville, Bare, Honey & Pantaloons. Pantaloons have collections for your entire family and that's why it is called India's favorite store with the best bargains in town.

The kids section, where there is are fantastic collections from the toon world with characters like Popeye, Tom and Jerry, Mickey Mouse, Donald etc, For the ladies, Pantaloons has a wide range of ethnic salwars from brands like Biba, Shreshta and Western wear which is elegance personified with ethnic ensemble also. Location Pantaloons, a part of Pantaloon Retail (I) Ltd., are among India’s largest chains of fashion stores, with 40 stores across 23 locations. Pantaloons is present in 23 locations across India including - Mumbai, Navi Mumbai, New Delhi, Noida, Gurgaon, Gaziabad, Kolkata, Chennai, Bangalore, Pune, Ahmedabad, Hyderabad, Baroda, Lucknow, Agra, Kanpur, Indore, Secunderabad, Mangalore, Bhubaneshwar, Surat, Siliguri & Rajkot. Communication Mix Pushpinder Singh-led Saints & Warriors has been awarded the advertising duties of fashion retail brand Pantaloons. According industry sources close to the development, the estimated account size is in the region of Rs 15-16 crore. While Saints & Warriors would handle fashion advertising for Pantaloons, PerceptH would handle part of the departmental store campaigns. TBWA\India handles their mall business pan-India. Keeping the nature of markets in mind, the company is deploying a different marketing mix. It would reach out to customers more directly using communication tools such as rallies, auto advertising and banners. The ads marked a change from the earlier campaigns that showed families — now, it featured trendy young men and women wearing the latest fashions. The latest campaign, in April this year to launch the summer collection, was similar in execution. In both campaigns, the focus has been on the variety of merchandise lines and the message is clear: Pantaloons stocks the latest designs and fashions. On the communication mix, Singh said, “The communication for the business would be supported through print and outdoor. It would also be contributed through the television medium.”

COMPANY STRENGTH The Company looking at capturing a significant portion of the entire opportunity that the Indian economy provides. These are being done through multiple initiatives in existing businesses and also by building new businesses on the peripheries of the retail business. The Company has significantly strengthened its existing mature businesses and is expanding established retail formats into new geographies and cities. At the same time, to capture new consumption trends, the Company has rolled out a large number of new initiatives and retail formats in segments like home improvement, consumer durables, communication products, books, music and entertainment, health, beauty and wellness among others. These specialty retail formats are in many cases the first in India and are expected to garner a significant portion of consumption expenditure going into new categories. During the period under review, the Company opened 11 Pantaloons, 27 Big Bazaar,13 standalone Food Bazaar, 1 Central and 5 Brand Factory. Subsidiary Company, Home Solutions Retail India Limited rolled out 2 Home Town, very-large format stores along with other retail formats. New stores covering around 2 million square feet of retail space were rolled out taking the total retail space under operation to around 5.2 million square feet as on June 2007. The Company plans to increase its retail space by nearly 4.5 million to 5.5 million square feet in the coming year. In order to further leverage its reach and ability to attract increasing number of customers within its stores, the Company has rolled out new businesses and subsidiaries in the areas of consumer finance,capital, insurance, real estate funds, retail media, brand development and logistics. Each of these new initiatives is a step towards driving more value from its existing retail businesses and at the same time.

PESTAL ANALYSIS

GROWTH STRATEGY(ansoff matrix) TARGET MARKET

EXISTING

EXIST

NEW

MARKET PENETRATION( PANTLOON)

MARKET EXPANSION

FORMAT DEVELOPMENT

DIVERSIFICATION

NEW

PANTALOON (MARKET PENETRATION) It involves realizing growth by directing efforts towards existing customers using the present retailing format. Pantaloon comes under market penetration because it is attracting customers from its current target market to visit the retailer or buy more merchandise on each visit.

FINANCIAL HIGHLIGHTS The operating results of PANTALOON for the year under review are as Follows: (Rs. in Crores) 2007-2008 2006-2007 Sales (Net of Taxes) Operating Income Other Income Total Income Profit before Depreciation & Tax Less: Depreciation Profit before Tax Less: Earlier Years Income Tax Less: Tax Expenses Profit after Tax

4,776.33 3,031.44 272.58 205.29 3.76 92.03 5052.67 3,328.76 279.01 217.87 83.39 36.86 195.62 181.01 (0.03) 0.06 69.68 60.96 125.97 119.99

Add: Profit brought forward from Previous year 215.76 116.59 Surplus available for appropriation 341.73 236.58 Appropriation Proposed Dividend 10.67 7.54 Tax on Proposed Dividend 1.81 1.28 Transfer to General Reserve 12.60 12.00 Balance carried to Balance Sheet 316.65 215.76

GMROI: GMROI is gross margin return on your inventory investment. In other words, it is the amount of dollars you make after you deduct the cost of goods. This is how much money you get per dollar of inventory invested made by the buyer. GMROI= Gross margin percentage*sales-to-stock ratio = Gross margin/Net sales*Net sales/Average inventory at cost = Gross margin/Average inventory at cost. So, the GMROI of PANTALOON is calculated below: For 2007-2008:

= 125.97 crore/105 crore*100 = 119%

For 2006-2007

= 119.99 crore/ 108*100 = 111%

So, for 2007-08 GMROI= 119% & for the year 2006-2007=111%

REFERENCES Websites:www.pantaloon.com

http://osufacts.okstate.edu www.pdfcoke.com

Projects:-Fundamental-Analysis-of-Pantaloon mba NIT-DURGAPUR - Pantaloon-Retail-BK-India