Pantaloon - Retail Revolution

Pantaloon Retail Posts 157% Increase In Net Profit

Pantaloon Retail (India) Limited, the flagship company of the Future Group, declared its unaudited financial results for the quarter ended December 31, 2006 wherein the gross turnover (Rs.795.48 crore) for the quarter increased by 57 per cent; net sales/ income from operations (Rs. 752.68 crore) increased by 59.47 per cent; profit before tax (Rs. 65.82 crore) increased by 147 per cent; net profit (Rs. 43.97 crore) increased by 137 per cent; and the diluted earning per share (EPS) increased to Rs. 3.24 (from Rs. 1.46).

The Board of Directors of the company, at the meeting held on January 25, 2007, inter alia, took on record the segmented unaudited financial results for the last quarter ended December 31, 2006, along with the limited review report of NGS & Co, Statutory Auditors of the Company.

The ‘Value Retailing’ segment revenue for the quarter ended December 31, 2006, increased to Rs. 552.75 crore (Rs. 338.84 crore as of the quarter ended December 31, 2005). The ‘Lifestyle Retailing’ segment revenue increased to Rs. 181.72 crore (Rs. 132.73 crore as of December 31, 2005). The profit before tax and interest from the ‘Value Retailing’ segment increased to Rs. 42.65 crore (Rs. 24.66 crore as of December 31, 2005). The profit before tax and interest from the ‘Lifestyle Retailing’ segment increased to Rs. 27.70 crore (Rs. 19.15 crore as of December 31, 2005).

In the quarter ended Dec’06, Big Bazaar Stores were opened in following cities- Nagpur, Mumbai , Haldia, Allahabad, Coimbatore, Ahmedabad, Surat, Chennai and Hyderabad. Stand alone Food Bazaar stores were opened at Mumbai, Hyderabad, and Secunderabad. Brand Factory stores were opened at Bangalore and Hyderabad. Pantaloon stores were opened at Mumbai Central and Delhi. Stand-alone “aLL” store was opened at Mumbai. Stand-alone Depot stores were opened at Mumbai and Delhi. Big Bazaar Wholesale Club was opened at Ahmedabad. Top 10 store was opened at Mumbai. Stand-alone Health Village was opened at Mumbai.

Earlier, Future Group has unveiled its latest division Future Fashion House, which will roll out several brands in categories like textile, apparel and accessories, for which they have brought together a team of 100 designers.

Designers Rocky S and Priyadarshini Rao have also been roped in an advisory capacity to review the products. The focus is to make available ethnic fashion 'affordable' to the masses. It will be distributed via the Pantaloons Retail outlets across the country. With over 60 brands, Future Fashion House aims for leadership in fashion in India with a projected revenue of over Rs 20 billion in the current year, and a projected revenue of over Rs 40 billion next year, informs an official release.

The initiative promises to offer original Indian fashion incorporating latest global influences reversing the trend of India following western fashions, and opening up a whole new world for the Indian consumer. It will launch a series of initiatives, which will include fashion shows and exhibitions to bring alive new trends. As well as use India's fashion influencers, Bollywood and television, to take the new looks across India and rejuvenate Indian tradition and reinterprete modernity.

The group whose flagship enterprise is Pantaloon Retail, already has six verticals including Future Retail (encompassing all lines of retail business), Future Capital (financial products and services), Future Brands (all brands owned or managed by group companies), Future Space (management of retail real estate), Future Logistics (management of supply chain and distribution) and Future Media (development and management of retail media spaces).

Kishore Biyani - 'International Retailer of the Year'

Pantaloon - Forms Joint Venture With Staples

Pantaloon group has done proud to the Indian retail industry. Kishore Biyani, head of India's largest retail group Pantaloon was honoured with the International Retailer of the Year Award by the US National Retail Federation at its annual convention. American retail industry registers a whooping 4.5 trillion dollars of annual sales. It’s for the first time that an Indian retail group has made to the top.

“I think what we have to learn from the US is how consumption can drive our economic growth,” said Pantaloon Retail MD Kishore Biyani adding that the US market is all about thinking big in terms of technology and consumerism. Though Biyani declined to comment on reports of a tie-up with American coffee chain Starbucks, but said that he expects an Indian store to open by June this year. He ruled out a partnership with fast-food chain Burger King. “Our job is to keep on meeting people. But I don't think so there's anything happening that side,” said Biyani. “Pantaloon is focused on giving the customer exactly what they want. They will sell in whatever format is needed, from food to electronics to high fashion apparel. And they really are a good example to all the other retailers who come here to learn,” said Karen Knobloch Senior VP, National Retail Federation.

Pantaloon Retail India Ltd has also informed BSE that Staples, Inc. (Nasdaq: SPLS) on January 17, 2007 has announced a joint venture with the Company and its new office products business unit, Future Office. The agreement establishes a platform for Staples to enter the $10 billion office products market in India and allows the Company to benefit from the industry expertise and sourcing network of the world’s largest office products Company.

"As Staples expands globally, India represents a great opportunity for the Company," said Ron Sargent, Staples chairman and chief executive officer. "This partnership combines Pantaloon’s local business knowledge and leading brand with Staples’ best practices and global procurement strength. Staples looks forward to working with the Pantaloon team on this joint venture."

"The office products business in India presents tremendous opportunities for growth," said Kishore Biyani, the Company's Managing Director and chief executive officer. "Through our partnership with Staples, the industry leader, we can become the office products provider of choice for businesses throughout India."

Staples Future Office will serve businesses of all sizes through delivery as well as cash-and-carry locations, offering a wide range of office products from core office supplies to printers to computers. Future Office, which recently acquired B-to-B online office products Company Officedge, will expand its delivery operations to include Delhi, Mumbai, Bangalore, Hyderabad, Chennai, Kolkata, Pune, Ahmedabad, Indore and Chandigarh.

Pantaloon - Acquires Officedge

Pantaloon - What's Your Future Office

Pantaloon Retail India Ltd has informed BSE that Future Office Products Pvt Ltd, a wholly owned subsidiary of the Company, a part of Future Group, has announced the acquisition of the operations and management of Officedge, an online B2B office products Company providing contract delivery services to corporate customers on a pan India basis. Providing a one stop shop on a proprietary e-procurement solution, Officedge currently serves more than 80 large corporate customers across 6 cities offering close to 1200 office products.

Backed with an efficient supply chain infrastructure, it offers ease of ordering, next-day delivery and an ongoing 'Saving Programs, which can be rolled out on a national basis. Officedge was co-founded by two professionals turned entrepreneurs, Shailesh Karwa and Sharad Dalmia (previously consultants with TCS and Accenture respectively), after they felt an imminent need to organize the highly fragmented office products market in India.

This acquisition will give Future Office a headstart in the $10 billion office products market in India. Commenting on the acquisition, Mr. Rakesh Biyani, Director of the Company said "this acquisition fits in with our strategy of being present with different business formats to capture increased spend levels by customers. We have over the years pioneered many concepts where we interact with end customers. Officedge is a unique organization and gives us the necessary traction in a growing market".

Pantaloon - To Spin Off Mall Division

Future Group Doing some Aggressive Stuff

Pantaloon Retail (India), part of the Future group, plans to spin off its 'Central' mall division to create a new company. It also plans to come with an IPO for the new company by the end of 2008. Rakesh Biyani, director, Pantaloon Retail, said: "Currently, Central is a division under the Pantaloon Retail, and there are only four Central malls in the country — Bangalore, Hyderabad, Pune and Vadodara. We will be coming up with a new company for the same and will list it on the stock exchange.” The decision to carve out a subsidiary out of the mall division was taken to unlock the value of the 'Central' mall concept and raise funds through the IPO for future expansion, Biyani said. However, he did not divulge the exact quantum of fund it planned to raise from the IPO. The three operational 'Central' malls fetch Rs 400 crore.

The company has already initiated the process of creating the subsidiary, which was part of its long-term goal, he added. The company plans to have 11 Central malls. Responding to recent media reports suggesting that Pantaloon Retail will divest its 49 per cent stake from Planet Retail Holdings, he said the company believes in buying and not selling. He further hinted at the firm’s plans to acquire a travel portal in the country and that the acquisition would be concluded by the year-end.

Pantaloon is also planning to more than double the Big Bazaar stores to reach the 100-mark from the present 41 stores, while substantially increasing its presence in the South besides tier-II cities. Addressing a press conference in connection with the opening of second Big Bazaar store in Hyderabad, Rohit Malhotra, head of south zone operations of the retail arm of Pantaloon, said the company was planning to increase this number to seven stores, besides adding an equal number of standalone Food Bazaars in the city in the next 6-8 months. The company has invested Rs 15 crore in the second store, which has been set up after a gap of five years, and is expected to gross Rs 100 crore turnover in the first year, Malhotra said. "Locations for the remaining stores in the pipeline for Hyderabad have also been finalised," he said.

He added that the number of Big Bazaar stores would be increased to 30 from 11 in the entire South. Close to Rs 1,000 crore is being invested in the country-wide expansion plans this year, he said. According to him, the Big Bazaar stores currently have combined sales of about Rs 2,000 crore annually. Besides increasing the number of stores in the existing cities, the company is planning to cover 15 more cities, including tier-II cities such as Vijayawada and Visakhapatnam.

The motto of nobody sells this cheaper and better and everything is available under one roof continues to represent our sales strategy. Besides keeping 1.6 lakh products under one roof, the company is offering huge price discounts of up to 60 per cent on various products," he said. Set up in a 52,000-sq. ft. area, the company's second store in the city is strategically located at the busy RTC crossroads, which houses a number of cinema theatres besides being one of the important junctions in the city.

Future Logistics is close to announcing a domestic acquisition. The company is said to be in talks with Patel Integrated Logistics and is likely to buy a majority stake in the company, say sources. The two companies are likely to sign the term sheet this week, they add. The deal will be funded by Indivision, the PE arm of Pantaloon Retail, say sources. Patel Integrated recently merged Patel Roadways with itself and Patel On-Board Courier. Post merger, the management holds 57% in the company. But sources say the management is likely to offload 30-35% stake for Rs 100 crore. But the management could not be reached for comments on the same.

Future Group - Synergy In Businesses

Biyani Sets Foot In Outdoor Media Biz

Venturing into the outdoor media business, Kishore Biyani’s Future group, with retail brands such as Pantaloon, Big Bazaar, Food Bazaar and Fashion Station, has set up an out-of-home media division called Future Media India Ltd to tap the Rs 900-crore market. The idea is to use the company’s retail spaces as a media platform. “We are present in 32 cities, where we have over 140 stores. The number of stores will double in 2007 and will attract over 200 million customers. Future Media’s unique selling proposition is that it will provide a communication platform to reach out to these 200 million customers just before they decide to purchase goods at our stores,” said Kishore Biyani, CEO, Future Group.

Future Media plans to offer a range of media solutions to advertisers at the points of purchase at its malls and other multiple format stores. It will use digital signages, large format television sets, and the audio media to advertise brands. “It’s far more focussed than any other media platform and is completely measurable with respect to actual sales,” he said. Future Media CEO Partho Dasgupta said using retail media spaces effectively was critical as India’s growing consumer class spent a large chunk of its leisure at malls and retail stores. The media solutions would be aimed at branded products and services ranging from telecom and insurance to automobiles and the FMCG sector.

Other than using its malls and retail chains, the company will bid for outdoor media space at amusement parks, Delhi Metro etc. The company’s business model is fashioned after Focus Media, China’s largest out-of-home media company. But does Future Media plan to tie up with an international outdoor brand or rope in an investor? “It is a high return opportunity. A lot of people have shown interest in investing in this venture. We are exploring various options,” said Biyani.

Pantaloon - Now Enjoy duty Free Shopping

Pantaloon-Alpha Get Rs 500-Cr Duty-Free Deal For Delhi Airport

Kishore Biyani's Pantaloon Retail (India) Ltd and its British partner Alpha Airports Group Plc have won a Rs 500-crore three-year, three-month contract to run duty-free shopping at Delhi's Indira Gandhi International Airport, the consortium said in a statement on Wednesday.

Delhi International Airport (P) Limited (DIAL), run by the GMR group, which is busy modernising the national capital's airport. DIAL's first phase of the airport would be ready with the completion of a new integrated terminal building in 2010. DIAL is a joint venture company comprising the GMR Group, the Airports Authority of India, German airport firm Fraport, Eraman Malaysia and the India Development Fund.

The Alpha-Pantaloon consortium said the stores at Delhi airport will feature an extensive range of products by some of the largest and most popular brands such as Armani, Gucci, Christian Dior, Calvin Klein, Nike and Swatch. “The brands for India have been selected after careful research in passenger demographics, customer profiling and destination requirements,” it said.

Asia, which now has some of the world's fastest growing economies, accounts for nearly 35 percent of the global duty-free sales, and airports could well turn out to be major hotspots for retailing activity as companies seek to tap footfalls in the catchment area of airports.

Privately built airports in Bangalore, Kochi and Hyderabad are also betting on retail outlets to boost their image and profitability. “No longer is duty free shopping just about loading up with as much cut-price liquor and tobacco as customs regulations back home allow. Instead, airports are increasingly becoming upscale bazaars, retailing premium goods, electronic products, gourmet foods and fashion accessories,” said a DIAL spokesman.

Alpha Airports Group Plc has more than 140 retail outlets across 40 locations in the UK, Europe, the US, and South Asia. In Asia it has outlets in Kochi, Colombo, Kathmandu and Male.

Srinivas Bommidala, Managing Director, DIAL, said that the Alpha group’s “experience across the globe would provide world class experience to travellers at the Delhi Airport.”

Also check out the article at Bloomberg.

Pantaloons - Retail Revolution

Pantaloon Expects Rs 5000 Cr From JVs

Kishore Biyani-promoted Pantaloon Retail India Ltd (PRIL), part of the Future Group, is targeting a revenue stream of Rs 5,000 crore by 2010 from joint ventures. The group is planning to invest Rs 500 crore in the same period in the joint ventures. This will be a ten-fold return on investment in four years. “We hope to invest Rs 500 crore in these joint ventures till 2010 and reap Rs 5,000 crore,” said Ved Prakash Arya, director - operations & COO, Pantaloon Retail.

The company is looking at this giant revenue stream to flow in from seven key areas where it has entered into joint ventures and taken equity stakes. For instance, the latest is the initiative with Lee Cooper. “Basically, we recognise that we do not have the expertise in certain areas that are better handled by those in the segment. So, we have identified some key segments and have forged alliances that fit in with our plan to reach the consumer where they are, with what they need,” said Arya. The segments identified broadly include footwear, lifestyle, kidswear, food, entertainment and health. There are others such as mobile and beauty where the group has initiated on its own with ventures such as Star n’ Sitara saloons.
For footwear it has 51 per cent stake in a joint venture with Liberty India and already has six stores under the banner of Shoe Factory. “Here we stock not only just brands, but also imported footwear and other brands. This segment is roughly valued at around Rs 20,000 crore and we want to be part of it,” he said. For kidswear, it has tied up with Gini & Jony and is looking to take a major position in the Rs 7,000 crore segment.

In the foods segment, it has tied up with Pan India Food Solutions that has under its banner food outlets such as Bombay Blues, Copper Chimney and Noodle Bar among others. These will help PRIL create food courts where the company seeks to establish malls. For foraying the entertainment space, it has forged an alliance with Mumbai-based Galaxy Entertainment that runs a bowling company, video arcade and sports bar.

In the arena of health, PRIL has looked at the area of preventive care with fitness where it has tied up Talwalkars and it already has its venture Indus Clothing that takes care of yoga and fitness wear. It has also entered into a joint venture with the Manipal Group and hopes to set up pharmacy chains, pathology labs and “we are also looking at the consulting space with Manipal,” said Arya.

In lifestyle segment, it has a joint venture with Planet Retail India Ltd that has under it ventures such as Marks & Spencer and has exclusive distribution license for brands such as Puma, Wilson and Speedo among others. PRIL has also got an alliance going with Etam for lingerie and inner wear and with Goldiam International Ltd and retails its jewellery brand Ola.

Pantaloon Retail - Way To Go

Pantaloon Board Nod For Alpha JV, Stock Split

The board of directors of Pantaloon Retail India, at its meeting held on September 30, approved an MOU with UK-based Alpha Airports Group Plc (Alpha), for forming of a 50-50 joint venture (JV) company.

According to a release issued by Pantaloon to the BSE today, the JV company will develop travel, retail and food & beverage catering businesses at the leading airports in India.

Pantaloon also reported a 47% jump in its net profit at Rs 158.3 mn in the quarter ended June 30, 2006 as against Rs 107.9 mn in the year-ago period. EPS increased to Rs 5.89 in the reporting quarter versus Rs 4.29 in the corresponding quarter a year earlier, the Mumbai-based company said in a statement. Pantaloon's sales during the April-June quarter were up 61% at Rs 5.75 bn as against Rs 3.57 bn in the year-ago quarter.

The board also approved a stock split in the ratio 1:5, ie each equity share with a face value of Rs 10 to be sub-divided into five shares of Rs 2 each.