Mukesh Ambani-promoted Reliance Retail is planning to set up high street retail formats and premium malls pan-India by 2007. This will be an extension of the group?s focus on the upcoming hypermarkets format.
With the move, the company will start selling premium branded apparel and accessories through these outlets. Confirming the move, Reliance officials told FE, ?After focusing on setting up hypermarkets to sell value-for-money products, we have realised it is essential to set up premium retail formats.?
Spykar Lifestyle Private Ltd, into high-street retail format for jeans and fashion apparels, is planning to tie-up with Reliance Retail in this venture. Sanjay Vakharia, director-marketing, Spykar Lifestyle told FE, ?Once Reliance Retail brings in premium retail formats by 2007-end, we will be one of the first companies to tie up with them for selling our high-street branded products through their outlets.?
Spykar Lifestyle Private Ltd is also planning to exit production of premium jeans and fashion apparels and get them outsourced completely by 2009. Currently, the company holds 40% control over production whereas captive vendors handle 30%, and the remaining 30% is controlled by third party vendors which include companies like Gokuldas Exports and Bangalore-based Pratik Apparels. ?This is to divest the production cost in other activities including retail expansion plans apart from introducing new brands. Premium retailing operates on wafer thin margins and the saved costs will add to our margins. We are planning to expand our existing exclusive ?Spykar? retail outlets from 94 outlets to 250 outlets by 2009,? Vakharia adds.
Vakharia said, ?We are also planning to foray into two new product categories by launching two new brands such as ?Voto? for fashion apparels and ?Dtto? for kidswear. We will set up 40 brand shops for each brand soon. Apart from fashion apparels, our new ?Voto? brand format will also sell accessories, footwear and travel bags targeted at the youth.?
Spykar Lifestyle Private Ltd is also planning to come up with an IPO by the end of financial year 2009. As part of its international operations, Spykar Lifestyle is for the first time planning to set up exclusive ?Spykar? branded outlet in the UK market in 2009. ?With the new initiatives in the pipeline, we hope to grow our sales turnover from Rs 89 crore last year to Rs 160 crore this year and Rs 330 next year,? summed up Vakharia.