Is it what it seems like.

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.

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Recession ? Hermes says who ?

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The Hermes ‘Plush Horse’ sells at $490 ! Chrissake, that is twenty three thousand Indian rupees !

I understand Nicole Kidman and the likes buy these gifts for babies of Tom Cruise and the likes. What I don’t understand why anyone who is not on Hollywood ( or Bollywood) should buy the Hermes horsey for little kids to feed to their doggies ?!

America’s bust but the Hermes Horsey is still selling, never mind why ! Also proves that the ultra high end of the luxury market is safe and sound in any economy.

Back home, population of high net-worth individuals was estimated at 1,23,000 in 2007. That is up 22.7 % from 2006, making Indians the fastest-growing wealthy population in the world as per FICCI. It is also estimated by an independent Luxury player that there are about 1.6 million households in India earning $100,000 a year.

Earlier this year I read in the Business Standard that Hermes quietly launched their first store in India in Delhi in May this year at the Oberoi’s in partnership with the wife of PRS Oberoi’s grandson Ashok Khanna. Incidently Khanna also owns the celebrated Ananda Spa. Since they launched too quietly for comfort, I wrote to the Hermes guys asking if they indeed have a store in India. I got back a cryptic reply saying “we currently do not have a store in India”.

I am scratching my head now. Did they come or did they go ?

The next big idea in Retail!

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One-stop multi solution hubs catering to ALL automobile related needs ! Brought to you by the ‘Maruti man’ Jagdish Khattar. Just what the doctor ordered.

Cut back to almost 2 decades ago when it used to be another world. I was a champ then and my driving made a tough nut out of me. My first car was my father’s battered fiat and I would do regular rounds of  South Delhi mechanics to get all conceivable mechanical errors fixed in that contraption. A bonnet cover that would come off to dirt in the carburetor to a leaking coolant tank to engine overhaul to getting ‘local’ batteries – I may have been the rare odd woman who didn’t mind going into the filthy bylanes to find the elusive ‘good’ mechanic who didn’t charge the earth. The cars changed and so did the quantity and quality of encounters with the never changing ‘mechanics’ and ‘workshops’ !! 

Meanwhile automobiles grew by leaps and bounds but the solutions remained the same.  Though, an year ago I  read about a multi-brand automobile service station and accessories concept in Jamnagar, Gujrat called Autozone by who else but Reliance.  A place where besides getting any make of your car fixed, you could also jazz it up with stuff like power windows to base models, seat covers, AV systems, customized painting,  SAP R3 software to record and track your vehicle ownership life cycle and the works. Reliance had plans to open 400 Autozone outlets in 3 years ! An year since I’ve not heard a whisper about that concept again. 

Except that today I read the press announcement of Carnation Auto, India’s ‘First’ multibrand auto service & accessories chain by Jagdish Khattar !  His debut venture, Carnation Auto India Ltd is backed by Rs 80 crore from PremjiInvest and Rs 28 crore from IFCI Venture Capital Funds, both adding to  25 % stake in the company. Khattar plans to invest a total of 1000 crores in 5 years in this venture. Very Cool ! Obviosuly he has the whiff of the chaotic ( Nanotic?)  times to come.

Carnation Auto plans to launch a pan-India service and sales network at 100 locations in 65 cities over the next 5 years. To begin with there will be 6 outlets in  NCR,  Hyderabad and Cochin, and 30 by the next year. Khattar already has 3 locations in his bonnet and will be developing them to make them operational. He plans to develop one-stop auto solution hubs catering to all automobile related needs including maintenance, insurance, CNG/LPG retrofitment, accessories of different brands of cars under one roof besides an automotive training institute to develop and train “support staff “.  You better drop ‘mechanic’ from your vocabulary pretty soon 🙂

Khattar is currently  talking  to leading automobile players for strategic partnerships to provide service backup. 

Smartly,  he also has in his kitty a real estate company called Carnation Realty, for developing real estate ( by buying land) and leasing it back to the parent company.

Way to go, Automobile Retail !

Metro Cash & ‘Carry Off’

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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!

3A Bazar, anyone ?

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I was reading a Retail related post about ‘pop up stores’ on a the National Entrepreneurship Network website. (While on NEN – they are co-founded by IIT B; IIM A; SP Jain Institute, Bombay; IBAB, Bangalore and BITS Pilani to help launch new entrepreneurs, and hence thousands of valuable jobs for India. Very noble indeed.)

Their post was about an innovative retail format in the Phillipines called the ‘Palengkenito’, which means ‘mini-market’ in English, The Palengkenito is a mobile grocery store on wheels, developed to bring retail convenience to less-affluent consumers in the Philippines. Specially converted Suzuki minivans are outfitted with a generator, shelving units, food heating elements and a refrigerator. The roving store offers quality pre-packed fresh and processed food, snacks, canned goods, toiletries, and other basic household items in small packages and sachets !

I recall meeting a prospect for a job position last year who had shown me a portfolio of mobile grocery store pictures that he was instrumental in developing – it was either for 6ten or Subhiksha but I am not sure if I remember the name of the chain correctly. Whoever it was, did not take the concept through since I never noticed any mobile grocery stores in Delhi ever after.

The post about Palengkenito got me curious to find out more about a retail concept which just seems tailor made for a country like ours. And just as I wiped the dust of my search I found that a little known man called Asad Shamsi a metal handicrafts exporter, was already selling on wheels for almost an year now in the rural districts of Uttar Pradesh. He calls his Vans -3A Bazaar and it is India’s first mobile retail company!

He has beaten the Big Boys to it by a huge margin. He says that he was inspired by similar retail chains in Europe. He has 5 vans which carry goods worth 2.5 lakhs of rupees everyday from a central warehouse to 700 villages in the JP Nagar district of UP. Since there are only five 3A Bazaar Vans, most of these villages are visited weekly or fortnightly or sometimes even monthly. This suits the villagers just as well since their income is irregular and they do not make large purchases very often. The 3A Bazaar Van is regular event that they wait for and look forward to.

The daily average retail sales of 3 A Bazaar concept are between Rs 8,000 -10, 000 and Mr. Shamsi is already planning to increase the size of his fleet. The Vans look surprisingly natty and I am truly impressed. Asad Shamsi is a man to watch out for in the future of Rural retailing!

The Big Fat Indian Wedding Designs & ‘Real’ Estate.

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As I stood outside the Grand Hyatt in Bombay after the Images Retail Awards, waiting for my car – I spotted Jesse Randhava in front of me. There were a few painted others who were younger and maybe from the time that I stopped following page 3 news. The inaugural HDIL India Couture Week was happening at the same venue and I couldn’t help but think that no matter what, recession never hits the Indian fashion industry. Or the real Estate Industry for that matter. Or if it hits them, it takes a long time for the message to sink in ! And in keeping with that spirit you have a real estate company called Housing Development & Infrastructure Limited ( HDIL) sponsoring the Couture Week ! He He ! Funny.

The organisers, FDCI had discreetly said earlier that said that the Couture Week was timed to appeal to India’s wealthy elite and expatriate Indians ahead of the autumn wedding season. And to catch the Big Fat Indian Wedding season, the Delhi Fashion Week begins on October 14, Wills Lifestyle India Fashion Week starts in Delhi the next day, and Lakme Fashion Week begins on October 20 in Bombay. Hallelujah !

The great indian wedding show, truly, deeply and always goes on.

It happens in India! (with apologies to Mr. Biyani)

I love the nimbu-mirchi – the most important ( and creative) element of Visual Merchandising in traditional Indian retail to ward off the evil eye ! Though of course you’ll also see it outside the poshest stores selling ‘firang’ labels.

If you’ve got a franchisee with a fertile Indian mind, you’d better develop the zen for green chillies and the lemon! 

The Collective

I love Barney’s Communication! Not Barney, the purple dinosaur but Barneys New York, the luxe retail brand. I love the Barney’s website, the mailers, the catalogue and those clothes. It’s a pity I don’t have the rich-punjabi-husband!

I was reminded of Barneys while reading in the ET the other day about Aditya Birla Nuvo’s plans to launch a chain of lux stores in India, inspired by Harvey ‘Nicks’ and the Barneys concepts! The stores will be called ‘Collective’.

I remember, on my first geeky trip to London, I carried a list of all the ‘must -visit and be photographed at’ places! There was Harrods topping that list and I hadn’t heard of Harvey Nicks! But my up market friends in London told me that Harrods was where the oldies go and so I landed at the imposing corner building a few streets away from Harrods.

It’s been 10 years that Aditya Birla went shopping for the Madura Brands and things have been rather quite since then. With ‘Collective’, the company will take a very big fashionable leap – targeted at the metrosexual man, the chain will have 12 stores to begin with in Bangalore, Mumbai and New Delhi. To support the backend, AFL Logistics has already set up the first-of-its-kind 12000 sq ft fashion and luxury retail distribution centre in Bhiwandi specially for the Madura Garments Lifestyle Retail Company. The second such Luxury distribution center will shortly be announced in Bangalore. 

What’s special about a Luxury goods warehouse? Well, pleased to be educating you – it has automated biometric access, infrared security and surveillance with high-end cameras which are capable of motion based capture, customised racking and a fully mapped warehouse management system. Binning and picking guided by a fisrt of its kind in India wireless radio frequency gun (RF gun) and more ! Phew, are we impressed !

Aditya Birla have lined an impressive array of the brands to be showcased at the ‘Collective’ – VF’s 7 Jeans, True Religion, Keneth Cole, Ted Baker & Valentino. This should make ‘Collective’ the hottest fashion spot for the ‘with-it’ Indian male!

Though, on another note can you imagine the possible remote consequences of pictures of Buddha playing the guitar? That’s ‘True Religion’ jeans for you. The Keneth Cole homepage celebrates ‘gender identity’ by showing a transgender woman kissing her boyfriend. All that with the likes of Ted Baker & Valentino makes it a rather eclectic mix. In a country looking for excuses to make politics, everything has potential! And thank God politicians don’t read (blogs).

 

Matchbox matters !

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Was there life before the gas lighters ? It took me about 60 seconds to clear the fog over the last few decades of my life, even though I think I am still of relevant age ! The neighbourhood ‘Kiranedar’ would deliver the monthly ration in a neatly packed cardboard carton, brought up to our first storey flat by a random kid who would always look emaciated just like I did. Child labour was not a fashionable topic those days.    

Anyway, the point is that the random kid would lay out the contents of the cardboard content for display on the floor while my mother ticked off each item on her list. There would always be a familiar packet which I now think was green and yellow but I could be completely wrong about the color scheme. What I cannot be wrong about is the brand name : WIMCO encased in a diamond shape black box. Sometime along the way, my mother graduated to a gas lighter. At first it was treated like a decorative gizmo to supplement the matchbox routine and thereafter the matchbox was dumped and it became routine to swear profanities looking for the elusive matchbox whenever one needed to light up the candles on the birthday cake. The individual matchbox cost some obscenely small amount and then for the last many years I have no clue what a matchbox cost except that I’d routinely notice the paanwala throw a free ‘matchling’ of a box to anyone who cared to ask for a light. 
In the good old days match box brands and graphics were as creative as they come. There is even a book on Indian Matchbox designs by Shahid Datawala on Amazon. It seems that the book is an obituary to the death of the matchbox in urban Indian homes. So much so that I buy a cigarette lighter in my house to light my daily incense and the multiplication of birthday candles. I guess the ‘maachis’  has relegated itself to the kerosene stove, ‘choolah’ and the odd ‘bidi’. 
I did some quick search and found that the current industry consumer spend on matchboxes is Rs. 1250 crores p.a. for 24 billion match boxes. And that the government adopts a reservation policy on the matchbox business since it is considered a small scale industry.  ‘AIM’ – is India’s largest selling Safety Matches brand and that ITC acquired WIMCO Ltd. through its arm, Russell Credit in 2005 and therefore owns key WIMCO brands like Homelites, Ship, Cheetah Fight etc. 
And after 15 years of growing obscurity the good old matchbox is making Economic Times news today. After having been priced at a standard 50 paise, the Indian matchbox will now retail at double that amount. Is Mamta Banerji reading ? We can blame it on organised retail. 

Wynken, Blynken and Nod one night, Sailed off in a wooden shoe…

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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 who turned businessman at 18, was passionate about India so much so that he held the global board meeting of his group at Batanagar, West Bengal earlier this year and announced two world-class shoe factories in Bihar at Mokamehghat and Bataganj.
Bata’s Indian footing begain in 1931 when Thomas Bata arrived in Kolkatta via Karachi to set up his  first factory at Konanagar. Till then, footwear in India was produced as handicraft in cottage units. Bata went public in 1973 and changed to Bata India Limited with a professionally run management at the helm with the Canadian company still holding 51 % equity in the Indian operations.   

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.