Retail majors in rightsizing mode

IN A bid to maximise sales per square feet, Indias frontline retailers are increasingly looking at ways to restructure their stores. Leading players like Future Group, Spencers Retail, Shoppers Stop and Vishal Retail plan to rightsize their stores and replace slow-moving categories with speciality formats under the shop-in-shop model.

Retailers feel such an approach will also help them improve gross margin returns per sq ft in the present environment when same store sales growth is quite weak. A shop-inshop approach helps increase revenue per sq ft. It enables best utilisation of space and is a good way to do away with excess space and reduce space for categories which are not doing well, Future Group CEORetail Rakesh Biyani told ET.

Future Group plans to offer a wider choice in large-format stores like Big Bazaar by setting up speciality zones under the shop-in-shop model. This approach provides consumers with a wider choice. We have a similar model for the Pantaloons outlets in the East and may replicate it elsewhere, Mr Biyani said. Shoppers Stop recently tied up with Cafe Coffee Day to manage cafes within its stores. It is an ongoing process to maximise returns, said managing director BS Nagesh. The most common categories where retailers are looking for shop-inshop outlets include food and beverage, saris and areas which have more customerconnect requirement like cosmetics, personal care products, fine jewellery and salons, says Retailers Association of India CEO Kumar Rajagopalan.

Spencers Retail, which is presently rightsizing by cutting down on 20% of its retail space, also plans to focus on shopinshops. In a slowdown, shop-in-shops are the best way to leverage domain knowledge of speciality players and maximise returns. Such outlets will be set up through our groups speciality formats like Books & Beyond, Mera World, Music World as well as in collaboration with other players, Spencers Retail marketing head Samar S Sheikhawat.

Vishal Retail group president Ambeek Khemka said the retailer too is restructuring its 171 stores nationally. We have already completed the exercise for 35-odd stores and the results are encouraging. In fact, small and regional brands are lapping up the opportunity to follow the shop-in-shops model, he said.

Economic Times: Writankar Mukherjee & Sreeradha D Basu, KOLKATA


Make-up and marketplaces are tops for beauty and apparel shoppers.

In March, eBay came out on top for traffic to beauty and apparel retail sites while Mary Kay was No. 1 for time spent, Nielsen Online reports.

eBay was the traffic winner despite posting a 44% traffic decline. 6.5 million shoppers visited eBay Clothing, Shoes and Accessories last month, Zappos was second in line with 5.2 million visitors, a 55% increase from a year earlier.

Visitors to Mary Kay spent on average a whopping 2 hours and 23 minutes on the make-up site—far longer than Avon, which ranked No. 2 with nearly 50 minutes.

The top 10 online apparel and beauty shopping destinations in March with unique visitors in millions this year compared to a year earlier and the percent change, according to Nielsen Online were:

* eBay Clothing Shoes & Accessories, 6.57,11.64, -44%
*, 5.23, 3.38, 55%
* Victoria`s Secret, 4.89, 4.20, 16%
* Avon 3.94, 4.20, -6%
* Lands’ End, 3.88, 3.47, 12%
* The Gap, 3.81, 2.38, 60%
* Old Navy, 3.54, 3.36, 5%
* eBay Jewelry and Watches, 2.72, 4.81, -44%
* L.L. Bean, 2.48, 2.70, -8%
*, 2.25, 1.94, 16%

Unique visitors count only once each shopper who came to a site, no matter how many times the shopper visited. This is a custom list compiled by Internet Retailer of the top e-commerce sites in this category based on Nielsen Online data. Rankings may contain multiple web sites from the same retailer or manufacturer.

By length of visit, the top 10 apparel and beauty sites in March (hours:minutes:seconds), according to Nielsen Online, were:

* Mary Kay, 2:23:10
* Avon, 0:49:58
* Lane Bryant, 0:30:17
* Woman Within, 0:18:49
*, 0:18:25
*, 0:16:30
* Victoria’s Secret, 0:16:24
* Sierra Trading Post, 0:15:11
*, 0:14:45
* eBay Clothing Shoes and Accessories, 0:14:04

The top eight consumer goods industry segments in terms of online ad impressions (in millions) in March, according to Nielsen data, were:

* Food & Beverage, 3,490.70
* Personal Care, 3,354.67
* Print Publishing, 1,159.02
* Home & Garden, 985.01
* Apparel & Jewelry, 685.80
* Automotive Supply, 417.50
* Toy & Hobby, 150.57
* Recreational Gear, 146.14

Reliance Retail in talks with Boots for wellness biz

BANGALORE: UK’s health and beauty giant Boots Company, now Alliance Boots, is returning to India. This time, Boots is expected to ally with Reliance Retail in the wellness business. Sources said Reliance was in fairly advanced talks to float a joint venture with Boots in which the former would keep a majority 51% stake.

The Indian retail juggernaut’s still emerging operations has identified certain business verticals where it would look for equity JVs for the requisite brand support, and wellness is one among them.

The development comes even as the domestic retail chain has rolled out Reliance Wellness stores in Hyderabad and is working on expanding the network to cover more markets. It plans to roll out over 300 wellness stores in three years. “This is market speculation and we have no comments at this stage,” a Reliance spokesperson said, when contacted.

This marks Boots’ return to Indian market after it exited a joint venture with Nicholas Piramal following the sale of its OTC medicines business to Reckitt Benckiser in 2005.

The still-at-works JV will help Reliance offer an array of activities from dispensing pharmacies to health and beauty services to healthcare check-ups under its wellness vertical.

The format currently offers products across categories such as allopathic, ayurvedic and homeopathic pharmaceuticals, personal care, beauty solutions and healthcare products. Reliance Wellness also has OTC health foods, self-help medical and fitness equipment in its portfolio. The wellness vertical at Reliance Retail is spearheaded by Ninu Khanna, who also looks after the company’s FMCG business.

Boots, UK’s biggest pharmacy chain, operates around 3,100 dispensing outlets worldwide.

Its current international operations are spread across Norway, Netherlands, Thailand and Switzerland. In UK, it also runs health and beauty destination stores across highstreets and edge-of-the-city centres. Interestingly, Boots also has a significant eye-care business apart from manufacturing and marketing health and consumer products under Boots, No 7 and Soltan brands.

Alliance Boots was formed through the merger of Boots Company with Alliance UniChem. However, a private equity consortium led by KKR acquired Alliance Boots earlier this year for around $22 billion. It was the first FTSE100 Index company to be acquired by private equity funds.

In this context, it may be mentioned that Reliance was earlier rumoured to be in talks with VisionCare for an alliance in the eye-care market. Meanwhile, it is believed that Reliance Retail’s equity JV strategy – with the company holding majority or at least 50% stake in each of them – will be restricted to certain sectors. Sources said key business verticals like hypermarket chain, consumer durable and fashion apparel will be fully-owned operations.

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