Thailand’s Central Retail Corporation Buys Italian Department Store.

One of Thailand’s leading retailers and department store operators, Central Retail Corporation Limited, has purchased a leading Italian department store, la Rinascente, for €260 million.

la Rinascente offers a broad selection of prestigious brands for men, women and children as well as luxury accessories, cosmetics, lingerie and items for the home.

The flagship store is in Milan and features world-class brand names such as Louis Vuitton, Christian Dior, Fendi, Gucci, Bottega Veneta, Balenciaga, Valentino, Dolce & Gabbana, Armani, Zegna, Chloe, Miu Miu, Marc Jacobs and etc.

In 2010, Rinascente generated revenues of €350 million.

“We will support the excellent work of the current management, making available our know-how in retailing, and creating the opportunity for Made in Italy brands to expand in profitable and fast growing new markets in Asia,” said Chief Executive Officer, Central Retail Corporation, Mr. Tos Chirathivat. “We are now building up a great new history for Thai retail industry. With this acquisition of la Rinascente, it makes Central Retail Corporation Ltd. truly entering to the world-class business leader in department store operator by expanding our three department store brands under Central Retail chain to totally four brands as following Central, ZEN, Robinson and la Rinascente. All department stores will reinforce our strengths both in Thailand and China.”

Coca-Cola uses solar cooler to push rural sales

Sales of soft drinks have long been stymied by erratic power supply, but an environment friendly innovation developed by Coca-Cola India now promises to change all that. Armed with the new product, Coca-Cola India plans to offer an entire range of its chilled soft drink products to markets deep in the hinterland, even where there is no electricity. 

‘eKOCool’, a chest cooler, developed internally by the Indian arm of the Atlanta based multinational, operates exclusively through solar energy, with no other electricity source required to operate it. It has a capacity to store two crates, which contains 48 glass bottles of 300ml each. That’s not all. It can even charge your mobile phone and light up your home.

The innovation gives Coca-Cola a competitive edge to tap new rural markets and ramp up sales of a product which is always best served chilled. Introduced in select rural markets earlier this summer, it has already improved sales dramatically and company officials expect orders of the product from other countries in the system as well.

Says Asim Parekh, VP technical, Coca Cola India: “The eKOCool is an outcome of our technical team’s persistence to use renewable energy for operating cooling equipment. The rural markets pose challenges in expansion as a huge swathe of the rural belt is not yet covered by the power grid hence remains without electricity or has low power. This challenge has now been overcome by Coca-Cola’s new innovation, which will give us a competitive edge as well as a first mover advantage.”

The product loaded into the cooler early morning or previous night is ready to be served chilled in the morning. The cooling equipment brings benefits to the retailer too in terms of saving on the electricity bill and cost of ice.

A pilot project under which 20 such coolers were placed in rural areas near Agra (Uttar Pradesh) has been successfully completed this summer, and has already shown results. Sales from these outlets have jumped nearly five times, a company official said.

Sakhidevi, who operates a general store in Sarvatpur near Agra, says: “We don’t have electricity in the village for hours. Since I installed the solar cooler, my sales have gone up.”

The journey to develop the solar cooler started in May 2009, when Coca Cola India CEO Atul Singh was visiting a rural market in UP and found that many outlets stocking the company’s products did not have any chilling equipment. The outlets were operating out of ice boxes with little ice, since either coolers or electricity were not available.

Says Sunil Gulati, GM Technical, who developed the design; “After evaluating various options, we chose solar energy to eliminate the need to depend on grid-based electricity completely, and to be environment friendly.”

New retail players make the most of low-cost environment

LEADING brands and retailers may have slammed the brakes on their expansion drive, but new entrants are identifying the opportunities created by the slowdown to steer ahead in a lower-cost environment.

Overall, the store rental-revenue dynamics have improved. Real-estate costs, which were a critical factor for retail has turned favourable, as companies work out deals for existing and prospective properties. “Though sales may have dipped 5-10% for a lot of retailers, rentals have come down 35-40%. As a result, existing stores are now breaking even or becoming more profitable,” associate vice-presidentretail & consumer goods at Technopak, Baqar Naqvi, said. The revenue sharing model, which has positioned malls owners as partners, is also transforming into a key stimulus.

“Earlier, most franchisees would ask for minimum guarantees. These clauses are now out of the system, making expansion through franchising much easier. However, only companies with cash reserves will be able to seize the opportunities in a downturn.

Unfortunately, there are very few of this breed,” added Mr Naqvi. Home decor brand Rosebys, which has announced an expansion to 110 stores this fiscal, is a case in point. For new entrants, there are strong reasons to invest. Take for instance, the Jawad Business Group which franchises Papa John’s and recently launched American south-western casual-dining chain Chili’s. “When there are fewer brands hitting the market, vendors are more willing to indulge in hard negotiations over payment terms, as they are also on the lookout for business,” general manager, restaurant division, Tapan Vaidya, said.

The RPG Group, which operates Spencer’s chain, sees it as an opportune time to test the market for its lifestyle format Mera World. “The downturn not only gives us an opportunity to perfect the model but it is also easier to tie up with the right partners for our shop-inshop formats.

“Many of these brands may have opened standalone stores if the market was better,” Speciality Retail’s president, K Dasaratharaman, said. Mera World has partnered with Baccarose for perfumes, Just in Vogue for watches and Eternity for eyewear. Media costs, which play a key role in brand building have also become much more fluid today.

Economic Times, Sarah Jacob BANGALORE, sarah.jacob@timesgroup,com

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

Argos to Install Yard Management System to Boost DC Productivity

Argos to Install Yard Management System to BoostDC Productivity

U.K. retailer Argos plans to deploy yard management software at its distribution centers across the country to optimize resources and improve efficiencies in day-to-day operations.

The Milton Keynes, -based retailer will use Dallas-based Retalix’s Yard Management System to provide greater visibility into warehouse operations, allowing real-time control and monitoring of its 500-vehicle fleet across all of Argos’ nine U.K. distribution centers through a Web-enabled user interface.

“With a large network of regional and national distribution centers across the United Kingdom, it is essential that our tractor and trailer fleet is closely tracked,” said Adrian Burleton, commercial director – supply at Argos. “By integrating the Retalix Yard Management system with our existing Retalix Warehouse Management system, we will be able to optimize our yard and dock resources, and eliminate inefficiencies that negatively impact our operations.”

The first phase of the rollout is the vehicle-tracking module, which is being implemented in parallel with the enabling radio frequency identification (RFID) technology. RFID readers are being installed at the entry and exit points of the company’s distribution centers, and each of the approximately 1,100 trailers and 500 tractors in the Argos fleet are affixed with a rugged RFID tag, automatically registering arrival and departure information as the vehicles enter and leave the distribution centers.

The Retalix Yard Management system is designed to automate the yard and dock management process through advanced predictive logic and leading-edge optimization algorithms. Using software engines and rich visibility tools, Retalix Yard Management is expected to eliminate operational silos and synchronize yard and dock activity with distribution center demand in real time.

The system, which was designed using the Microsoft .NET platform, is part of the Retalix Transportation solutions suite, which is designed to fulfill the critical transportation requirements of inbound traffic, yard management and dock scheduling for retailers and distributors. Additional offerings include Retalix Traffic Management, which provides comprehensive inbound freight management for planning, procurement, execution, settlement, visibility and supplier control, and Retalix Dock Scheduling, which facilitates dock appointment scheduling via the Web, predicts labor demands, optimizes dock resources and streamlines the flow of goods through the distribution center.

Argos operates 700 general merchandise stores throughout the UK and Republic of Ireland.

Inspired by McDonalds, Wal-Mart Creates Its Own Dollar Menu.

McDonald’s (MCD) did so well with its dollar menu that Wal-Mart (WMT) decided it will create one, too. The difference is that the Wal-Mart version will be merchandise and not food. McDonald’s philosophy of selling very inexpensive food in a clean, well-lit environment served by consistently friendly people has helped it expand its operations to 36,000 stores worldwide. Wal-Mart’s approach to retail stores is not terribly different. It may not be entirely coincidental that Wal-Mart was started in 1962 and McDonald’s began in 1955. Millions of relatively young people, most of them parents, were only a decade removed from serving their country and not being paid a great deal for that service. It was a perfect environment for consumers to believe that something could be inexpensive and a good value at the same time.

Earlier this week, Wal-Mart, the world’s largest retailer, said that it planned to improve its second quarter sales by offering shoppers irresistible bargains. For the last quarter, Wal-Mart reported flat earnings of $.77 and said it expected to deliver a range of $.83 to $.88 in the current period. Same-store sales for this quarter are expected to be between flat and up 3%. Wal-Mart may have an uphill fight to post strong second quarter earnings. Recent employment numbers and shrinking access to credit will hurt retail sales, although Wal-Mart probably has its share of people who pay cash.

According to Reuters, “Treasurer Charles Holley said Wal-Mart has planned a number of merchandising initiatives to appeal to cash-strapped shoppers, including its dollar program.” The theory behind the promotion is sound. Most stores could not bring in a lot of revenue selling items at $1 a piece, nor could most restaurants, but Wal-Mart and McDonald’s have such significant scale and customer bases that getting an even slight increase in discretionary spending from tens of millions of people could make the difference between a mediocre quarter and a good one.

Wal-Mart and McDonald’s are often criticized for selling “cheap” food and merchandise and treating their employees poorly by paying them very modest sums. There may be some truth in both charges but that true comes with another side to it. Many people who eat at McDonald’s and shop at Wal-Mart are from the lower economic classes. McDonald’s and Wal-Mart do not exploit that by selling these people junk. George Soros may not want to wear shoes from Wal-Mart and eat McDonald’s hamburgers but that does not mean that both establishments have not helped feed and clothe people who might otherwise struggle.

Workers at McDonald’s and Wal-Mart are not paid well. Waiting on people in a big-box retail outfit or cooking and serving fast food will never pay well. The jobs don’t require any special skills and so they do not come with a premium wage. Wal-Mart does employ 2 million people, which is a lot of individuals to keep on a payroll during a recession. McDonald’s has 400,000. Neither place has announced significant layoffs and neither is likely to. (Read: “The Burger That Conquered the Country.”)

Charging people a dollar for a meal or for some modest item off a retail shelf may seem like a gimmick to pick up a penny a share for the next quarter. It is a good deal more than that. When a dollar is all that someone can spend, that person doesn’t care if his purchase increases the company’s earnings.

Card Factory adds 6 stores.

UK’s leading greetings card retailer Card Factory has added six stores to its portfolio, bringing its count to 486, reports The Retail Week.

As part of the plan, the company has signed for units in Portsmouth and Winchester in Hampshire, Truro and Redruth in Cornwall, and Plympton and Teignmouth in Devon. The signings add around 14,000 square feet of space. The largest of new additions is Portsmouth, where the retailer has taken around 3,400 square feet unit, adds the report.

Established in 1997 and has been on the UK’s high streets for over ten years, Card Factory retails products including greetings cards, gifts, plush items, novelties and gift wrap.

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