Reliance Retail to renegotiate rentals

Mukesh Ambani-led Reliance Retail is looking to cut operational costs by renegotiating property rentals downward by 20-25 per cent for existing as well as new stores, a top official of the company said on Friday.

Reliance Retail also plans to add more stores this fiscal, especially in its lifestyle segment, he said.

"Rentals have come down a bit. A more realistic number for downward renegotiation in malls is about 20-25 per cent, but it varies in metros and smaller towns," Reliance Retail's president & chief executive officer, Lifestyle, Bijou Kurien said.

He said the company is renegotiating rentals and changing some terms in commercial agreements. Kurien, however, declined to give details on the capex earmarked for FY'10 and the store expansion target.

"There is no denying the fact that last year was tough, especially the way consumer behaviour was demonstrated in spending. There was a slowdown and our rate of addition of stores between October and March was relatively slower," Kurien said.

Reliance Retail currently operates 950 stores spread over 4-million sq ft across the verticals of hypermarket, apparel, footwear, jewellery, books, music, auto accessories and service format among others.