IT ’ S A ‘MALL ’WORLD

The retail revolution in Mumbai has enhanced residential spaces across the city

When Crossroads, the first mall in Mumbai and in the country was launched, little did we know that the city would witness such a huge retail boom in the years to come! Today, Mumbai is home to some of the most prominent and successful malls in the country.

The start of this retail revolution in Mumbai can be traced to the initial years of the last decade. However, during the time frame of 2003-04 to 2007-08, the sector witnessed significant growth of around 11 per cent. The second half of the year 2010 re-witnessed an upsurge in the retail market post the economic meltdown.

Mumbai is estimated to have total organised retail stock of 8.72m sq. ft. and will witness 11.26 m sq. ft. of new retail development over the next three years. According to a study by McKinsey Global Institute, India is poised to become the fifth largest consumer market by 2025. The retail sector in the western parts of India like Mumbai, Pune, Nagpur and Ahmedabad, have seen a huge transformation, thanks to the changing consumption patterns, high disposable income in hand and favourable demographics.

Explains Shreesh Misra, Center Director of Phoenix Marketcity, Kurla, “An asset like a mall becomes a catalyst for people to converge at a particular location and spend leisure time beyond their office hours or during their weekends thus offering utmost convenience. So as and when the consumers start frequenting a mall or a retail space, the administration also plays a key role to support the property with proper infrastructure. Considering all these factors when people of a certain profile start taking a keen interest in a particular demographic it directly results in demand of residential spaces thus resulting in a complete makeover of the area.”

Phoenix Marketcity, which is coming up at Kurla, is predicted to change the face of this central suburb. It will floor 2.1-m sq ft project area for retail and boast of one of the biggest multiplexes in the city with 11 screens.

Retail developments in Mumbai like Inorbit Mall at Malad, Center One at Vashi and High Street Phoenix at Lower Parel were among the first to successfully bring in landscape changes in these respective areas. Such developments have had a positive impact on the real estate prices in the areas of their operations. Commercial places like Kamala Mills Compound, One Indiabulls Centre, Raghuvanshi Mills have gained prominence after High Street Phoenix. Adds Misra,”High Street Phoenix has acted as a catalyst for commercial and residential developments for Lower Parel which was not perceived to be good for any kind of development earlier. Today, it is one of the most sought after locations.”

Similarly, several residential projects by leading developers like Rustomjee and Kalpataru, to name a few, have launched their residential projects post the launch of Inorbit Mall in Malad.

Mumbai undoubtedly has a large number of working couples, migrants, DINK (Double Income and No Kid) and families with good disposable incomes and display an increasing appetite for socializing. These retail destinations being closer to such residential hubs add more vibrancy and convenience to the lifestyle.

Says Reema Kundnani, V.P – Marketing & Corporate Communications, Oberoi Realty, “Today, an average Mumbai family spends their weekend in a mall where the lady of the family gets to shop and meanwhile the kids get to play in the fun zone.

The main reason why malls are gaining popularity is because facilities like shopping, entertainment, movies and food are all available under one roof which makes it a hassle-free destination. We started with Oberoi Mall as the initial step of Oberoi Garden City project followed by the other planned developments.”

Similar is the story of central suburbs and Navi Mumbai where the mall culture is fast spreading with the commencement of malls like R-Mall, Nirmal Lifestyle, Korum, Eternity and Center One, Inorbit and Raghuleela in their respective suburbs. Center One, the first mall in Navi Mumbai, has played a significant role in the development of Vashi node.

Says Sandeep Runwal, Director, Runwal Group, “A good retail development changes the entire look of the area. Before the launch of R-City mall the area wasn’t a preferred destination for residential spaces. But now the residential prices have been almost doubled or tripled in the area. A good mall always adds value to the area and people are willing to pay premium price for a good lifestyle.” Runwal Group has established R-Mall, the first mall in Mulund, R-City and R-Odeon in Ghatkopar and R- Mall in Thane.

Clubbed with 7 -7.5% growth in GDP, the organised retail market is expected to grow in the near future, adding convenience and a new buzz to residential locations across the city.

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Beauty business set to boom.

Beauty consciousness has dawned on rising affluence. With an increase in the number of households upgrading to a higher consumption lifestyle, there is an explosion of growth in the Indian beauty space. Consider the Living Standard Measurement (LSM) classification, which is the new socio-economic classification to gauge consumption patterns : between LSM 1-4 , which is the lowest level, and LSM 8-plus (top end), there has been an 80-fold jump in growth in the consumption of beauty products and services. 

That explains why a Hindustan Unilever (HUL) is speeding up to open a Lakme salon a week. Or how a Jawed Habib Hair & Beauty (JHHB), which has grown from 37 salons in 2006 to around 225 at the end of November 2010, is eyeing a similar growth. Or why foreign chains like the contemporary French beauty salon, Jean-Claude Biguine, with annual revenues of 150 million euros, are setting up salons to groom the Indian consumer.Clearly, the predominantly unorganized locally run beauty salon market is at an inflection point. The mushrooming of branded chains like Lakme is expected to change the landscape completely a few years down the line, ushering in a new era of trained salon personnel, offering services based on global insights and professional products strutting the latest international technologies.”Step back and look at the way consumption has changed in India. Growing affluence has resulted in increased experimentation. This has accelerated the growth of beauty categories. You see this explosive growth in beauty services as well. Salons are at the centre of that growth. So it’s a big opportunity . A couple of years ago, we really decided to pick beauty as a theme. We have dramatically stepped up investment, innovation and go to market capabilities behind our entire beauty portfolio. And the Lakme brand is core to beauty. We see the Lakme business building scale within beauty,” said Gopal Vittal, executive director – home and personal care (HPC), HUL.

With close to 150 salons at present, HUL is scaling up rapidly , setting up one Lakme salon per week. The ambition is audacious. If one does the math, there would be about 200 Lakme salons a year down the line. But HUL would rather scale up this ambition to open 2 salons per week, if it has its way. Is there really room for so many? “We believe that there is room to keep adding salons for now. But what is crucial is to be true to the business model – the right return on capital, the right cost structure and the right people,” said Vittal.

“Currently, Indian hair and beauty industry is seeing a per capita annual spend of only $1.2, which is far lower than world standards. We are expecting this number to grow to $5 by 2015. So, in terms of market potential , there is no problem, however, only those companies which can have strong manpower and can overcome the hurdles of the industry can sustain this growth,” said Rohit Arora, executive director, JHHB. The Rs 23-crore firm has proposed to tap the capital market with an initial public offering of Rs 60 crore.

The roughly Rs 7,000 crore organized and unorganized hair and beauty industry is growing at the CAGR of 35%. At this rate, it has the potential to become a Rs-30 ,000 crore business by 2015.

Professionalization of salons 

About 18 months ago, when HUL took a closer look at its salons business under Lakme, it realized that the traditional methods of running an FMCG company would not apply here. The company set up a 100% subsidiary where Lakme was housed and looked after by a dedicated team having a separate CEO. The business got the attention it needed at a time when beauty was developing wings to take off in India. “The purpose of setting up a separate subsidiary that is still nested within the HPC business was to ensure focus and the right culture. And what is important is to build capabilities that are structural and sustainable ,” said Vittal.

In addition, HUL realized it required high-quality trained staff to have an edge. It has now launched a beauty academy with the objective to provide in house training to stylists. For this, HUL has forged an alliance with Pivot Point, a leading beauty training company in the US.

Providing financial metrics was another important task because a salon business operates on a return on capital employed kind of business and not the gross margin kind. “It took us six months to perfect the model. Now we have got a reasonably good grip on how we need to go about it. We’ve understood the levers and we are ready to scale up. So in the last few months we are adding a salon a week. But even as we do that, we have to keep our eye on same salon growth. And we are pleased with the 20% odd growths that we are seeing there,” said Vittal.

As a next step, HUL wants to closely inter-link the product business and the salon business . It has created a Lakme brand council which will advise on product innovation. HUL has already launched Unilever’s global professional product brand TIGI and hopes to build the salon brand in a major way. It has also tied up with global partners—Toly (based in Malta) for packaging structures and applicators, Fiabila in France for Nail Enamel, Schwann Stabilo in Germany for all pencils and pencil applicators and Intercos in Italy for lipsticks, eye shadow and face make up.

With national players expanding their base, will the unorganized market eventually be devoured? “It will take time before anyone or few large branded players take a larger share of this market. However, we are expecting the consolidation to happen at the organized level in the coming years. Local players will continue to exist, considering that there are low barriers to entry in this sector,” said Arora. While no organized player can hold a substantial share of this market, Arora said “the pipeline is big enough for many players” .

Perhaps, till the government sets up a regulatory system , it’s going to be a beauty rush for all.

Casual Male to launch superstore concept

Canton, Mass. ( July 8, 2010 ) Casual Male Retail Group said it will open Destination XL (DXL), a new men’s superstore concept catering to the bigger and taller man. The initial DXL stores are planned to launch in Chicago, Houston, Memphis and Las Vegas this summer.

The new format will feature a wide range of clothing, shoes and products under one roof, with collections of good, better and best products merchandised by lifestyle. With a 12,000-sq.-ft. footprint, the stores will carry product assortments in a range of very broad sizes starting at XL in tops and a 42-inch waist in pants for the bigger customer and a 38 inch waist for the taller customer.

The Casual Male superstore concept was created following a six-month consumer research study conducted by L.E.K. Consulting that found that big and tall men are looking for more options in a “one-stop-shop” environment and are willing to travel longer distances for a place that caters to their specific needs.

“DXL is a new and innovative retail concept that is attuned to our customers’ needs,” says David Levin, president and CEO of CMRG. “Our target customer wants choices, value for their dollar and the convenience and unique shopping experience DXL offers. We are confident that our new lifestyle superstore concept will offer the unique shopping experience that many big and tall men have been seeking.”

The DXL superstore concept also will be supported by an all-inclusive e-commerce site, launching in 2011, which will offer the same breadth of apparel and products.

Currently, Casual Male Retail Group operates 454 Casual Male XL retail and outlet stores, as well as 19 Rochester Clothing stores.

Watsons’ New Concept Store Opens In Beijing.

The health and beauty products retailer Watsons has opened a new concept store at U-town Lifestyle Center in Beijing.

Unlike its traditional stores, Watsons’ new store introduces the department store model. Divided into two sections, the new store has a traditional store layout on the second floor and a 400-square-meter area in which cosmetics products are sold in the same way as in department stores — with an independent sales area for each brand.

David Inglis, the general manager for Watsons North China, told local media that investments in the new concept store are 50% higher that those in a traditional store, but the prices of products will remain the same. The setting up of the concept store is based on the results of a customer survey and the company will continue to make changes in the future to meet the various market demands.

Inglis said the current financial crisis will not affect women’s pursuit of beauty. Over the past year, Watsons’ sales showed double-digit growth. The company will open nine new stores in Beijing and will open another concept store in Harbin, Heilongjiang province. Watsons opened a similar store in Tianjin earlier this year.

Source: ChinaRetailNews.com

Value segment posts Impressive retail growth.

WHILE the economy is showing clear signs of a recovery, there is reason enough to believe that a brief tryst with economic downturn has forced free-spending Indian consumers to tighten their purse strings. Value apparel retailers posted faster growth rates of 7-8% in the past two months, compared with premium lifestyle retailers, which continue to record flat or marginal growth.

After several months of declining sales, value retailers such as Big Bazaar, Vishal Megamart and Pantaloon have witnessed a smart recovery, while mid-priced and premium lifestyle format stores such as Shoppers’ Stop, Provogue and Life Style are lagging behind with almost flat sales growth, according to industry estimates.

“Broadly, value retail segment has regained an average sales growth of around 7-8% in the past two months, while lifestyle formats are growing at around 0- 4%,” said Rahul Mehta, president of Clothing and Manufacturing Association of India (CMAI). Consumers are clearly not in a mood to shell out a premium, and apparel retailers are now working around the current consumer sentiment, said Mr Mehta. “Lifestyle formats are recording flat growth rates and, in fact, growth was (-)3% in January,” said BS Nagesh, managing director & CEO of Shoppers’ Stop.

Retailers are hoping for an upswing in the lifestyle segment by September 2009 on account of festive buying. Analysts believe that economic turnaround will first benefit the value retail, which would propel the future growth in organised retail sector. In April, Pantaloon, with value and lifestyle sales ratio of 60:40, has marked a sales growth of 23% and 18% in the respective segments. It was 5% and 4% in March, and there was a negative growth in December. Provogue recorded (-)9% sales growth in December. However, in April and May it rebounded to 10-12%, based on same store sales, said Nikhil Chaturvedi, MD, Provogue India.

Roughly, value and lifestyle segments share the organised apparel retail market in a proportion of 3:2 in tier-I and tier-II cities, and recorded an year-on-year growth of 10-12% in the corresponding months of last year. Organised retail has been under pressure since September last year. Apparel retail was worst hit during the period. With consumers starting to cut back on spends, most of the retail outfits suffered negative growth in the second half of the last year. However, with the start of new financial year the organised retail sector has seen a gradual improvement.

GOING SLOW

Value retailers like Big Bazaar, Vishal Megamart and Pantaloon witnessed a smart recovery
Mid-priced & premium lifestyle format stores such as Shoppers’ Stop, Provogue and Life Style are lagging behind with almost flat sales growth Retailers hoping for upswing in lifestyle segment by Sept ’09

JJB shuts five Qube stores

JJB has closed five Qube stores

JJB Sports has closed five of its Qube stores as turmoil for the struggling chain continues to mount.

It is reported to have closed stores today in Nottingham, Cardiff, Swansea, Blackpool and Leamington Spa.

JJB had hoped to find a buyer for its loss-making lifestyle chain, which includes Qube and Original Shoe Company. A deal has yet to be done and no buyer has yet been confirmed for its health clubs business, which many have touted as vital for the future survival of the business.

A spokesman for JJB confirmed that five Qube leases had been terminated. “Rents for the rest of the Qube store portfolio have been paid in full. This is part of the ongoing rationalisation of the business.”

JJB is also under scrutiny from the Office of Fair Trading over its off-loading of some of its JJB stores to rival Sports Direct.

Dabur aims Rs 1000 crore turnover from lifestyle retail biz by 2010

NEW DELHI: Home grown FMCG major Dabur India on Tuesday said it is targeting a turnover of Rs 1,000 crore over the next three years from its beauty and lifestyle subsidiary – H&B Stores.

“We are aiming a turnover at about Rs 1,000 crore by 2,010 and around 150 H&B Stores. On an average, we are expecting a turnover of nearly Rs 22,000 per sq ft per annum from the outlets,” Dabur India CEO Peter Braker told reporters.

The company is planning six retail outlets in the Delhi NCR region by the end of January and by next financial year the number would go up to 50.

“Currently, we are focusing on the Northern India and will soon open stores in Chandigarh, Amritsar and Ludhiana. We also have plans to open shop in Bangalore by January and foray in the Southern part,” Braker added.

When asked how the company would compete with the existing retail outlets, Braker said, “We will offer products at a price which is 20-25 per cent cheaper than the Maximum Retail Price (MRP). This would attract the customers as this promotional price will be made available through out the year.”

The company’s market size is about Rs 25,000 crore and is now targeting customers in the age group of 16-45 years.

The retail initiative of H&B Stores is not only confined to selling only Dabur products, Braker said and added, “products of other FMCG majors, both national and international will be available in the outlet.”

The store size would vary in the range of 1,200 – 6,000 sq ft. The company would be investing about Rs 140 crore for streamlining its operations by 2010.

The lifestyle retail section of the H&B would be operating under the brand name of ‘new u’.

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