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Indian fashion chains bet big amid online retail growth

February 24, 2017 12:59 IST

Shoppers Stop is looking to open four new stores this year and plans to invest Rs 120 crore.

Indian fashion chains are betting big on the consumption story even as American chains shut stores, amid competition from online retailers. 

Macy’s, the largest department store chain in the US, said it was closing 68 stores. Sears will also close 42 stores. Kmart is closing 108 stores and discount chain Kohl’s has closed 18 stores, according to reports.

Indian chains are scripting a different story, despite a strong online retail presence. Future Group-owned Central plans to add 15 new Central HD stores. Central HD has upgraded their décor and has minimalistic fixtures with an aspirational fashion boutique feel.

“The store is designed to offer an enhanced and more customised service to shoppers,” said Vishnu Prasad, chief executive officer, Central. “We have received great response with the new Central HD. We are expecting 15-20 per cent like-to-like growth.”

Shoppers Stop, the country’s largest department store chain, is planning to open four new stores this year and is working on a 35,000 sq ft format for smaller cities, against the average size of 45,000 sq ft.

“The new stores have designated shop-in-shops for private brands to provide a luxe experience,” said Govind Shrikhande, managing director, Shoppers Stop.  “We are targeting seven-eight per cent like-to-like growth in the department store segment.”

Max, Landmark Group’s value fashion chain plans to open 40-45 stores at an investment of Rs 5 crore each. These stores have the latest retail identity as in their home market of Dubai with omni-channel capabilities in terms of digital displays and a WiFi environment. 

Vasanth Kumar, executive director of Max, said, “Unlike the US, India’s per capita retail space creation is very low and so is the share of organised retail. Also, 60 per cent of our population is below 30 years.”

“As a country, we have a long way to go before being saturated,” Kumar pointed out.

Rajat Wahi, partner and head (consumer markets) at KPMG, said with rents declining and e-commerce facing a slowdown, modern trade would resume expanding its footprint, especially in large formats (over 50,000 sq ft) and medium formats (10,000-30,000 sq ft). 

“While e-commerce will continue to grow and some categories will be bought predominantly online, most Indian consumers will continue to shop for high-value products in brick and mortar stores,” Wahi said.

Devangshu Datta, chief executive officer at Third Eyesight, said in a market as fragmented as India’s department stores “have a role to play as authoritative ‘experience environments’ for the consumer and as platforms to showcase diverse brands.”

Photograph: Danish Siddiqui/Reuters.

Raghavendra Kamath
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