Pantaloon Retail, the country?s largest retailer, which is in the process of merging its home solutions business with itself, has big plans to stimulate growth in its home retailing business post merger. The business is currently being run by Home Solutions Retail India Ltd (HSRIL) that has stores like E-zone, Electronic Bazaar and Home Town. The merger, announced this February, is part of an exercise to bring various retail operations of the company under one roof, and is expected to take place in another 6-8 weeks.
For the third quarter ended March 2010, Pantaloon Retail posted revenues of Rs 2,311 crore. Of this, as much as 18%, or Rs 407 crore, came from the home solutions business. Value retail contributes the biggest to Pantaloon’s overall revenues at 62%.
As part of its growth plan in home solutions, HSRIL will roll out 22 E-zone stores in the current financial year. With 66 stores already operational with an average size of 10,000 square feet per store, the company plans to target the metros and tier I cities for this expansion. The segment in the last quarter has seen a same store sales (SSS) growth of 45%. ?We achieved a healthy SSS growth in E-zone and expect to close the year with Rs 1,200 crore for the top line,? said Nitish Tipnis, president, E-zone.
Pantaloon?s home solutions business is on a growth trajectory. ?Last quarter, the business saw a growth of 30%. It was 15% year-on-year,? said Vivek Biyani, director, HSRIL. ?The majority of the revenues come from the electronics business, which has been doing good. We are going to make changes in the home solutions business post the merger, but it is too early to talk about them right now,? he added. The company, in a presentation to analysts in February, said that after the merger, it expects to see enhancement of margins in the home solutions business.
Moreover, to drive up its electronics business, E-zone is organising various promotional programmes. In such an event that concluded last Sunday, the company offered ?zero margin prices? on a wide range of electronics products. Tipnis expected to wind up the offer with an estimated Rs 60-70 crore business.
The company is spending about 2% of its sales to advertise the offer. According to Biyani, the consumer electronics business contributes more than 65% of the business of HSRIL.
The ?Rs 999? scheme aims to drive up consumer affinity. The consumer electronics business of HSRIL enjoys a 15% share in the Rs 8,000 crore organised business.