Recent News In Retail Sector

Reliance Retail –Wincanton Partnership to Boost Retail Add comment | August 15, 2008 Reliance Retail is now entering into a joint venture with leading European supply chain specialist Wincanton for giving a boost to its food and grocery and hypermarket businesses. The venture will do a lot for Indian retail. The synergy would enable Reliance to efficiently run its critical back-end operations, which essentially include warehousing of goods and transporting them to stores on time. The latest move by India’s largest corporate house, which jumped on the retail bandwagon two years ago by promising to do everything on its own, seems to suggest that it now needs a partner for almost every retail initiative. Industry observers believe that the company has expanded very fast and has managed to set up over 600 stores across various retail formats in less than two years, but its supply chain is in a mess. “How to get the right merchandise to the stores on time has been its biggest problem. You’d often not find the goods you want in Reliance’s food and grocery outlets,” said a source.

Reliance ties up with Vornado Add comment | August 14, 2008 Mukesh Ambani-led Reliance Industries that currently operates over 700 retail stores in multiple formats in India announced a 50-50 partnership with US-based real estate investment trust Vornado to collectively invest $500 million in a shopping mall joint venture. RIL is India’s largest public company with revenues in excess of $34 billion and a market capitalization of over $75 billion.Vornado Realty Trust, on the other hand is a fully-integrated equity real estate investment trust. It is one of the largest owners and managers of real estate in the United States with a portfolio of over 100 million square feet in its major platforms, primarily located in New York and Washington, DC metro areas. Under the JV, RIL and Vornado Realty Trust would commit up to $250 million each to acquire, develop and operate retail shopping centers across key cities in India. “The shopping centers will contain 500,000 to 1,000,000 or more square feet and typically be anchored by a hypermarket to be owned and operated by Reliance, Vornado said. Vornado has an aggregate investment in other India joint ventures of approximately $91 million and capital commitments to these ventures of an additional $92 million. Vornado’s other real estate investments include 32.8 per cent interest in Alexander’s Inc, 32.7 per cent interest in Toys “R” Us and Hotel Pennsylvania in New York City. Total real estate owned

or managed, including pro-rata share of partially-owned entities and joint ventures, is over 100 million square feet, including Vornado’s 16 million square feet of Toys “R” Us real estate. Read More »

Tata signs Retail agreement with Tesco Add comment | August 13, 2008 After the Bharti-Walmart deal, the Tata Group, are signing up a partnership agreement with Tesco, UK’s largest retailer, to launch retail business in India. Tesco and the Tata’s will sign a 50:50 joint venture for cash and carry and a franchisee agreement for the front-end. A formal announcement is expected very soon. This is the most viable option for foreign retailers wanting to enter India as Indian government does not allow foreign direct investment in direct-to-consumer retail that sells many brands and products. Those who know the culture of both Tesco and Wal-Mart says that they complement each other. Both are conservative companies who tread cautiously. They wouldn’t make gigantic plans which would be difficult to follow later. Both would take one step at a time, given the low consumer sentiments and still-high real estate prices. Read More »

Bahrain’s TAIB Bank shells out Rs 216 cr for 26% in Anant Raj Add comment | July 24, 2008 In the midst of a general slow down in the Indian real estate market, TAIB Bank, a leading private bank based in Bahrain, has picked up a 26% stake in Anant Raj Projects for Rs 216 crore. The deal, one of the first Shari’ah-compliant transactions in the Indian real estate industry, puts the valuation of the subsidiary of New Delhi-based Anant Raj Industries (ARIL) at Rs 831 crore. TAIB Bank has routed the investment through its real estate investment arm Acacia Real Estate. Anand Raj Projects plans to develop of 600,000 sqft of retail space which is expected to be operational by first half of 2009. The proceeds of the transaction will be invested in this project. DTZ India, the Indian subsidiary of DTZ Holdings, and International Property Consultant were the advisors to the transaction. Read More »

Retail Industry Going Slow on Recruitments Add comment | July 18, 2008 The hiring frenzy that India’s booming retail sector witnessed in the last two years appears to be cooling off, particularly at the middle and senior management levels. Recruitment firms suggest that the April-June quarter has seen a slowdown in hiring at senior levels as most retailers already have their middle and senior management in place and the tepid hiring is seen continuing into the next quarter as well. A report by staffing company says that growth in retail sector hiring will be flattish in the coming months. “On the managerial side, we have already filled a major part of our requirements. Since the back-end is firmly in place, we do not need to add too many people. But we will continue to hire at the shopfloor level as we are expanding rapidly,” Bijou Kurien, president and chief executive (lifestyle), Reliance Retail, said.

Carrefour may Opt Parsvnath for India Foray Add comment | May 28, 2008 Carrefour, the world’s second largest retailer, is considering the franchise model to initially expand its presence in the country and may announce a local partner in four weeks, people involved in the development said. The French retailer, which has held talks with as many as 50 domestic business houses including Mumbai-based Wadia group and Mukesh Ambani-led Reliance Industries and real estate companies, such as DLF, in the past five years, may choose Parsvnath, a New Delhi-based real estate company, as its partner. Read More »

PE Money coming in Full flow into Indian Realty

Add comment | May 27, 2008 The private equity (PE) graph in India’s real estate sector is growing as high as its skyscrapers. The first five months of 2008 has PE commitments in Indian real estate companies surpassing the total PE investments committed in the whole of 2007—that is $3 billion. Experts say PE funding in the second half of the year will be even more. This is a good time for PEs to invest as there is a liquidity crunch and valuations of many real estate players are down. PEs also expect a further lowering of valuations, somewhere in the tune of another 20%. Even as private equity money comes into the market, there are concerns among investors about the execution capabilities of many of developers. Read More »

CENTURY 21 Real Estate LLC Expands into India Add comment | May 22, 2008 Century 21 Real Estate LLC has announced that it has signed a master franchise agreement to open CENTURY 21® franchises in Greater India. Dr. Devinder Kumar Gupta and others have partnered to become the master franchisee of the CENTURY 21 System for five regions in India, including Bangalore, Chennai, Delhi, Hyderabad, and Mumbai, operating as CENTURY 21 Greater India. “Considering India’s emerging economy and healthy real estate market, this marks a tremendous milestone for the CENTURY 21 System and we are thrilled to work with Dr. Gupta and his team to establish a CENTURY 21 brand presence in this area,” said Tom Kunz, president and chief executive officer, Century 21 Real Estate LLC. “It’s an honor for the CENTURY 21 brand to be an integral part of the real estate landscape in India for years to come. We will work to provide the utmost in value and support to the CENTURY 21 Greater India team.” Read More »

Organized Retail to Capture 25 PC Markets by 2011 Add comment | May 13, 2008

In a surprise finding that organized retail is growing faster than expected in India, a study has forecast that this segment could account for a quarter of the total retail revenues by 2011 from the current 8 per cent share. The study has been done by accounting firm Deloitte Haskins and Sells. India’s retail industry, both organized and unorganized, is worth $295 billion at present. A February study by Mumbai-based brokerage Edelweiss Capital had said that organized retail would form 15 per cent of the retail sales by March 2011 from 4.1 per cent now. But Deloitte’s study says that organized retail grew at a scorching pace in 2007, going to 8 per cent of total retail sales from 5 per cent in 2006 India : Organized Retail - The year that was January 3, 2008 2007 was a trail blazing year for the Indian retail Industry. The who’s who of corporate India joined the retail bandwagon in the year gone by. Among them were the Bharti’s of Airtel who tied up with the retailing giant Wal-Mart with revenues of more than US $ 350 billion, the Aditya Birla Group with many more in the Q who are willing to invest substantially to grab a piece of the Rs3,50,000 lakh retail cake. The veterans of the industry like the Future Group have consolidated their positions by opening more stores and entering new verticals like home solutions as well as consumer durables. The future group has more than 25 retail formats, including JVs catering to a wide consumption space with more than 1000 stores acrossIndia. The group will increase its footprint from present 7 million square feet to over 13 million sq. ft of retail space. This will mainly see the expansion of present flagship formats but will also include some new formats. Reliance Retail, which faced stiff resistance from a few states, has put behind the same and is aggressively adding stores across the country and entering newer verticals like branded apparels, tying up with luxury brands across the globe along with venturing into the promising wholesale business. Reliance has 9 formats across India which includes Reliance hyper markets, Reliance Fresh, Reliance Super, Reliance Mart, Reliance Digital, Reliance Trendz, Reliance Footprint, Reliance Wellness, Reliance Jewels and Reliance Timeout. India : Best retail brands come together at IRF meet July 25, 2007 India Retail Forum (IRF) is a three days event hosting seminars, conferences, workshops, exhibition and Images Retail Awards. It is the most substantive unraveling of intellectual and information exchange for the retail business in the Indian subcontinent. The forum presents the business of retail in the region to a global audience, with the express aim of facilitating, understanding about and encouraging investment in this massive market place. At India Retail Forum it is a congregation of some of the best retail brands, companies and minds from across the globe, from diverse retail related segments – from retail real estate and design & architecture, to visual merchandising, retail support and technology. Over a thousand head honchos representing brands, retailers, chain stores, department stores, franchise networks, hypermarkets, institutional investors, retail consultants, service providers, mall and shopping centre developers, real estate firms, architects & designers, and logistics and technology support vendors attend India Retail Forum. The seminars are addressed by speakers from India & abroad representing big organizations in the field of fashion & lifestyle, food and grocery, entertainment & leisure, health & beauty, Consumer Durables, catering services, retail real estate, retail technology and retail support

In essence the forum takes India to the world – and gets the world to understand and appreciate the fastest growing consumerist region of modern times. The Exhibition area presents about 130 stalls spread in to various sections like Retail concepts – for products, L cube – for retail real estate, Asia Shop – for retail support and The Future Shop – for retail technology. The 3 day forum will conclude with the announcement of Images Retail Awards in the categories like: Fashion, Beauty & wellness, entertainment, catering services, pharmacy, consumer durables, food & grocery, leisure & forecourt retailing etc.

Reliance Retail Limited announces joint venture with Pearle Europe for optical Store chain news

04 March 2008 Mumbai: Reliance Retail Limited (RRL) today announced having signed a joint venture

agreement with European optical products retailer Pearle Europe for the launch of a chain of optical stores in India. Pearle Europe is a subsidiary of HAL Investments, the European investment subsidiary of HAL Holding N V an international investment company based in the Netherlands Antilles. Pearle Europe operates 2,200 optical retail stores in 21 countries across Europe and the Middle East. HAL Investments also owns a number of optical retail chains in emerging markets, such as China, Russia, Turkey and Brazil. Reliance plans to introduce a range of private label frames, lenses, sunglasses and contact lenses and solutions and market them through optical stores located within Reliance Retail formats such as hyper marts, super and wellness stores. These optical stores, manned by optometrists and support staff, will be independent business entities from Reliance Retail's format stores. Commenting on the launch of the joint venture, Bijou Kurien, president and chief executive lifestyle, said "This Joint venture underscores our commitment to bring world-class partnerships to India, to service the changing needs of the customer; blending the outstanding capabilities of Pearle Europe, a leader in the Optical retail industry, and Reliance Retail, which is seeking to transform the Indian retail industry." Reliance Retail Limited, a 100 per cent subsidiary of Reliance Industries Limited, operates over 500 stores in over 49 cities spanning, with the launch of its first store in November 2006.