Piramal Plans New Format, Expansion For Crossroads

Mumbai: | Updated: Jun 27 2003, 05:30am hrs
Piramal Holdings Ltd, which owns shopping mall Crossroads, has identified 30 cities across the country for its expansion plans. Of the 30, it has zeroed in on 11 for setting up Crossroads. For the rest, the group plans to have smaller formats of Crossroads which will be implemented after foray into the 11 cities is complete.

For the Piramyd retail chain, the company may look at expansion plans in tandem with Crossroads or an entry into regions not covered by the shopping mall. Although the food retailing venture is still under experimentation, the company has not ruled out acquisition of smaller players to grow in this segment. This plan was outlined by Piramal Holdings Ltd managing director Jaydev Mody.

Speaking to FE Mr Mody said the 11 cities have been identified after understanding the demographics of each location. We have decided on the 11 cities after doing research on the type of customers, age group and the income segment, he said. As per the plan, Crossroads at Nariman point will be opened in November and one more is in the offing in North Mumbai. Pune, Hyderabad and Bangalore will form the precursor to the roll-out across the country.

Mr Mody refused to name the cities or give a time-frame for the entire expansion plan. He was also reticent about the total investment for the expansion plan.

The company plans to adopt different routes for forays across the country. Therefore, it is talking to land owners for outright purchase or leasing of space in various cities. We are not just looking at purchasing land at these places but are also open to getting into joint ventures or entering into franchisee agreements, explained Mr Mody.

For the remaining 19 locations across the country, the company has plans to set up smaller formats of Crossroads. These formats would be smaller in size but would have the same ingredient which Crossroads has to offer, that is shopping, food and entertainment. However, the price points would vary depending on the region, Mr Mody added.

Piramyd, which is the retail outlet of the group, would also witness expansion in the coming quarter. The footprint includes presence in cities having Crossroads and also independent forays. The expansion of Piramyd is not linked with Crossroads. It will grow independently as well as in tandem depending on the potential of the area, Mr Mody said.

Even though the food retailing venture has begun on an experimental basis at Pune and Mumbai, the company is still trying to strengthen its logistical framework before it moves into this segment. Mr Mody said grocery retail would require logistical groundwork in terms of procurement and supply chain management which the company is still studying.

Once we are ready, expansion through joint ventures or through acquisitions of smaller players, who have reached saturation levels in terms of expansion, cannot be ruled out. We are open to it, he added.

For its Piramyd chain, the company is looking to target 40 per cent of sales through its private label programme in apparels. The company is looking to utilise its expertise in textiles to establish its own brand name. The private label programme becomes important as it is a product differentiator, gives better margins and more control on quality. We have made a beginning in shirts and will be rolling out our labels in other segments once we have understood aspects like procurement, design and fashion, Mr Mody concluded.