Despite the inflation touching an all time high and realty prices surging, Reliance Retail seems firm on expanding its footprint through different formats. The company officials agree that increasing commercial rentals do act as an impediment in expanding at prime locations but Reliance Retail is holding on to its plans of growth.
Talking to FE on the sidelines of launch of iStore under the Reliance Digital brand in Ludhiana, Ajay Baijal, CEO of Reliance Digital said, ?The high rentals do hit our turnover targets and its difficult to scout for places at prime locations. There is a wide disparity in commercial rents in cities like Delhi, Mumbai, Ludhiana and Chandigarh where the rents range between Rs 60-70/sq ft and Rs 500-600/sq ft.
?Renting out a place in malls adds on to the costs as besides the rent we have to pay additional maintenance charges as well.
?But we are expanding as per the plans and locating the stores near malls has proved more successful in case of big formats.? After the launch of iStore in Bangalore, Hyderabad, Mumbai and Jaipur Reliance Retail has launched its fifth iStore in Ludhiana. This format is an offering from Reliance Digital, the consumer durable information technology arm of Reliance Retail. The company plans to set up about 60 iStores and 150 Reliance Digital stores pan India by 2011-12.
?Reliance Digital stores are big format stores housing 150 brands spreading between 25,000-30,000 sq ft and iStores range between 1,500-2,000 sq ft.We expect a turnover of about Rs 75 crore from a digital store and about Rs 8-10 crore from the iStore where only Apple products will be available.?
?About 10 iStores have been planned for Punjab over a period of time. Our next digital store is likely to launch in Jalandhar by the third quarter of this year,? added Baijal.
The new iStore at Ludhiana spread over 1363 sq.ft. houses the entire range of Apple products for the professional and consumer segments such as iMac consumer desktop computers, MacBook consumer notebooks, Mac Pro and MacBook Pro, iPods and the entire suite of Mac software along with over 500 accessories and peripherals complementing Apple products. ?We are providing after sale services as well as financial services for our customers at the iStores. Exchange offers are also available on Apple products,? added Baijal.
Reliance Digital plans to open iStores across all major cities of India. As an Apple Premium Reseller store, iStore in Ludhiana, will be among the first to display any newly launched products in India. Reliance Retail opened its first retail store in November 2006 and on Wednesday operates over 600 stores in over 57 cities, spanning 13 states with over 3.5 million sq ft.