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Store to open six hypermarkets
Pummy
Kaul in New Delhi
Shahid Group-promoted The Home Store (THS), a lifestyle product
and home accessories one-stop shop, is now eyeing large format
hypermarkets.
| ...defers plans
to go public |
SHAHID Group’s The Home Store Ltd (THS)
has deferred its plan to go public and is now looking
for partners to fund its new dream project of large format
hypermarkets in Delhi and the NCR region.
According to THS president Mr Arif Sheikh, the company
plans to go public to raise funds for its hypermarkets
project and expansion of Sabka Bazaar supermarket chain
this year. ‘‘The market conditions at present are not
favourable to go public, so we have deferred the idea
for now,’’ Mr Sheikh told The Financial Express.
The company estimates that each hypermarket will involve
an investment of Rs 50 crore. Plans for other
locations will be finalised as soon as it ties up with
its partners. Refusing to divulge the names of shortlisted
partners, Mr Sheikh said, ‘‘Till now three major VCs approached
us but we have got nowhere so far.’’
Currently THS has five stores in Delhi, two in Bangalore,
one each in Jaipur and Ludhiana. Besides these, it is
present in 15 stores through its shop-in-shop stores.
The company has recently increased
its manufacturing capacities by 200
per cent. |
The group which has recently diversified
into food and groceries supermarket chain Sabka Bazaar has
firmed up its plans to open six hypermarkets—each spread over
50,000 sq ft—in the Capital and the National Capital Region
(NCR) region. The expansion drive into hypermarkets business
will be done under an extension of its Sabka Bazaar umbrella
brand — Metro Sabka Bazaar.
According to Mr Arif Sheikh, president, Home Store Ltd, the
company’s first hypermarket will come up on the Delhi-Faridabad
border by the end of October 2002. The company apparently
owns a 65,000 sq ft factory which was till recently leased
to Samtel Ltd and is now being converted to the proposed hypermarket.
A hypermarket, typically operates at very competitive prices
by offering products at commodity prices and may consist of
several departmental stores, discount stores and supermarkets.
‘‘It’s like a Sadar Bazar in an air-conditioned environment,’’
says Mr Sheikh.
According to Mr Sheikh, THS plans to follow a business plan
where it will buy out the real estate for all the proposed
hypermarkets and will later rent out a major portion and also
take a cut in margins. ‘‘We have the retailing expertise and
we’ll need to sell at competitive prices to keep out expenses
and overheads low,’’ Mr Sheikh added.
The company estimates that each hypermarket will involve an
investment of Rs 50 crore. Plans for other locations will
be finalised as soon as it ties up with its partners (SEE
BOX).
The reason for THS’s diversification, clearly is to expand
its customer base which is currently limited to a niche audience.
‘‘Home accessories have a base limited to metros. The concept
hasn’t spread to small towns and class B cities. Moreover,
there is an untapped organised retail market for all players,’’
he maintained.
Meanwhile, the company is getting aggressive on its latest
foray in organised retailing—Sabka Bazaar. Currently limited
to just three company-owned outlets of approximately 3,000
sq ft, THS now plans to expand the neighbourhood supermarket
chain to 30 stores by December 2001. The company envisages
an investment of 600 crore in the Sabka Bazaar chain by 2005.
While southern and western India have seen a range of hypermarkets
such as RPG Group’s Giant in Hyderabad, Pantaloon Retail’s
Big Bazaar and others, the North — particularly Delhi — has
been devoid of such hypermarkets.
With an estimated 3,000 foot falls per day, hypermarkets clearly
is a volumes game, and THS, it seems is all game for it.
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