I met a couple of students from a prominent B school yesterday. Graduating in Retail, they had come to discuss placements for the current batch. They asked me the average salary I think freshers could get ( at my small company and the likes) . I thought of an honest number and padded it by 20%. They both gave me the look of disbelief, the kind that says ‘ you can’t be serious’ ! After they had left, I was wondering if I was really out of touch. Last week a student of mine at a B school that I sometimes teach at wrote me an e mail asking me my opinion on the current Jobs scenario and the average CTC that he could expect. After I replied, I never heard back from him.
I spoke with the HR head of a mid size Retail company – she coincidentally called me to find what was happening about jobs at the senior level ! She said, my assessment of average salaries was optimistic and quite correct. So I know I am in touch and we should all know by the end of the next year which was the game is going.
I read yesterday that Reliance Retail will not renew contracts of 2000 contractual employees ! A very senior person at RKHS mentioned to me that most senior staff above a particular CTC have been asked to ease out. We all know what’s happening with Jet and IA. Retail will feel the tremors too.
In the US there has been a spate of closures. Today TOI says that retailer Eddie Bauer has closed 27 shops in the first quarter and plans to close few more by the end of the year. Fashion Bug, Catherines Plus Sizes will close about 150 underperforming stores this year. The Talbots group announced that it will close Talbots Kids and Talbots Mens Concepts by end of the year – in all 78 Talbots stores will close down. Walt Disney said it has also obtained the right to close about 98 Disney Stores in the US. Gap has announced plans to close 85 Old Navy and Banana Republic stores as it continues to struggle to attract customers. Ann Taylor will close 117 stores between 2008 and 2010. A large number of Indian Exporters are suppliers to these brands and the implications for them could be fatal.
Retailers in India, havn’t come to the bridge yet. New formats and expansions are announced every day. The ‘pundits’ predict a growth rate of 30 % for the industry and the forerunners say that the ‘gloom’ around the Retail Industry is false. Touch wood.
Budhadeb Bhatacharjee is a hero to survive the politics of his state. I do not know much of him but from whatever little I know, I put him in the squeaky clean league of Prime Minister Singh. Coming back to his state, of all the part time help we have had for the last 2 decades of living in Delhi – 90% have been from West Bengal. One has heard from them stories of abject poverty, the despicable state of the small farmer and the farmlands. I empathise entirely when Budha says that making Industries on these farmlands is justified because they are not productive and industries in fact will provide better jobs to many poor people. Even Prabhati my current Bengali help knows that is true.
The next week should decide if Budha’s reforms will get the second big blow if Metro should also move out on the trail of Tata Motors. Metro had planned an investment of Rs 564 crore to open 4 Metro Cash & Carry outlets in Kolkatta employing 2000 people. They were issued the coveted APMC license in 2006 which was valid till March 2008. The license was issued on the grounds that the Metro Cash & Carry business is business-to-business wholesale. The Forward Bloc now feels that the APMC license should not be renewed because several small traders already supply to hotels, restaurants and hospitals, and Metro could hurt their businesses.
Isn’t 2 years a rather long time for such awakening?! Metro Cash & Carry has already invested Rs 140 crore and employed 350 people in its first outlet on Kolkata’s Eastern Metropolitan Bypass, so far. The outlet would now not open if the license is not renewed. Metro is also ready with infrastructure, spread over 100,000 sq ft, on the Eastern Metropolitan Bypass. To add to the injury, the company had to stop construction for eight months based on a legal dispute between farm land owners, the government and themselves !
Chief Minister Budha is driven to a corner and I think he has taken on a lot against himself by going against his political party by instructing the 24 Parganas’ south district magistrate to issue the APMC license to Metro. Metro’s cash and carry outlet in Kolkata falls under the jurisdiction of 24 Parganas.
He has of course stirred the hornet’s nest by doing so and predictably the Forward Bloc ministers have stopped attending office in protest till the chief minister’s letter is withdrawn ! Budhadeb and the State Finance Minister are down on their knees in front of the Forward Bloc to renew the licence.
I am sure everyone involved knows that the Metro Cash & Carry exit means sounding the death knell for foreign investment in West Bengal. Sunday September 28, 2008 is the day of reckoning where the final decision will be taken by the ministers. Till then the its fingers crossed for modern retail!
I read this morning that 94 Thomas Bata, died in Toronto on Monday evening. For many years of my life I believed Bata was an Indian company. Something to do with the fact that Bata rhymed with Tata but more than that since Bata has been my generation’s childhood companion. I grew up with the Bata School shoes with a rather special relationship with my white PT shoes which I used to religiously wash in detergent every Sunday and then carefully beautify with a white shoe paint. My rather long big toe would sometimes win a battle with the shoe to dig a small hole ahead. And it used to be time for the next visit to the Bata shop in Alambagh.
Thomas Bata was called Tom by his friends and he had tremendous love for India and its people. His contribution to our country can never be forgotten and India accounted for the maximum Bata sales. Bata gave us our first shoes. In the 75 years Bata has a 35 % market share in the organized footwear sector and 8.5 % of India’s total footwear market. Bata retails from 1,250 stores across the country. It sells over 45 million pairs of shoes every year with an annual sales turnover of more than 178 million USD ( Rs 8 billion).
The company’s brands include Hush Puppies, Dr. Scholls, North Star, Power, Marie Claire and Bubbleguymmers. The company’s latest is a joint venture real estate project with the Calcutta Metropolitan Group to develop 262 acres land in Batanagar into a world-class integrated township called Calcutta Riverside.