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How Kishore Biyani plans to expand business

October 08, 2009 11:15 IST
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Kishore Biyani, the founder of Future Group, plans to more than double retail space to 30 million sq ft by 2013 and push the private labels business, while getting into new service areas. Meanwhile, consumers are indulging again, he tells Pradipta Mukherjee. Excerpts:

Is the slowdown still weighing heavy on the retail industry?

Consumers are indulging again and we are registering sales growth. We expect a sales growth of 25-30 per cent during the festive season this year (over the last year).

What are your expansion plans in the short-term?

Pantaloon Retail India will invest close to Rs 250 crore within the next one or two years for setting up 10 Central malls in the country. With this, we would add close to 1.7 million sq ft to our existing retail space of 14 million sq ft. Our target is to have a total of 30 million sq ft by 2013.

What would be your focus areas this year?

One major focus area is third-party logistics and brand distribution services. So, we are talking to several companies, especially foreign retailers, where all that a company would have to do is give us their products and we manage the entire logistics and brand distribution services for them.

This is an emerging income route for retailers. Our group company, Future Logistics, is already catering to the logistics needs of our outlets in the country. In the next two to three years, we expect a significant chunk of our revenues to come from outside the group through third-party logistics and brand distribution services.

Would Goods and Services Tax (GST) rollout help retailers like Future Group?

It would help in bringing down supply chain costs as we are looking at consolidating our logistics services. In the short-term, we would be looking at re-doing our supply chain and logistics costs once the GST is implemented, and CST is phased out.

So, we are looking at bringing down the number of warehouses to around seven from 25-26 right now. We command over three million sq ft of warehousing space. The space we command may not reduce but the number of warehouses would.

Any other specific strategies to grow sales?

Private labels will be one of our largest growth drivers. More then half of our revenues should come from our private labels. We have launched 'Mohena', our lingerie brand and we will enter new categories with more private labels. Manufacturing will be outsourced.

Currently, private labels contribute around 30 per cent to Future Group's sales in FMCG and 25 per cent in personal care in our major formats like Pantaloons and Big Bazaar.

How are your new media businesses doing?

We expect Rs 100 crore (Rs 1 billion) from our media business next year, from Rs 70 crore (Rs 700 million) now. We are revamping our existing print business and tailor-making advertising packages for advertisers on our in-store television channels. Advertising revenues are growing for all our media businesses.

By December this year, our revamped 'My World' monthly magazine would have a total print run of 150,000 copies, up from 20,000 print runs now.

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