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Tag: Lifestyle International

  • The brand also launched its new collection

    Melange by Lifestyle gets Deepika Padukone as brand ambassador

    By A Correspondent

     

    Ethnicwear brand Melange by Lifestyle has signed on Deepika Padukone as its brand ambassador.

     

    Said Rishi Vasudev, Executive Director, Lifestyle International: “Melange by Lifestyle has always celebrated the style sensibilities of modern Indian women who are strong and self-made. Our brand ambassador Deepika Padukone captures this bold and individualistic style that Melange represents. Being one of the most recognized brands in India across marketplaces, Melange continues to push boundaries by ‘rethinking’ ethnicwear and all that it has to offer. I look forward to our customers being delighted by the new collection that brings forth some remarkable pieces, perfect for every occasion.”

     

     

  • Retailers don’t expect things to improve this fiscal as demand is subdued

    Lifestyle retail chains post weak same-store sales in January-March quarter

    By Sarah Jacob & Sagar Malviya

     

    Sluggish demand has led lifestyle retail chains to post weak same-store sales in January-March 2012 and lower growth estimates for this fiscal.

     

    Driven by new stores, most retailers clocked 20-30 per cent sales growth in January-March. But same-store sales, or sales from stores that were operational last year, grew in single digits. Same-store sales are an important indicator of consumer demand and the health of the retail industry. Retailers don’t expect things to improve this fiscal as demand is subdued.

     

    The downturn began after Diwali, and the increase in the prices of essential commodities, lower salary increments, adverse macro-economic conditions and government inaction dented consumer confidence.

     

    “We would have targeted double-digit like-to-like growth if the year looked better,” said Govind Shrikhande, MD of department store Shoppers Stop.

     

    Shoppers Stop’s revenues grew 27 per cent to Rs 621.35 crore in the January-March quarter, but same-store sales grew 10 per cent. Volume growth contributed just 1 per cent to the increase in same-store sales while price hikes made up the rest. “Prices have risen and imports are getting costlier. These developments start impacting consumer demand after a point,” said Mr Shrikhande.

     

    Rival Lifestyle International, which operates stores under the Lifestyle and Max brands, said it clocked sales of over Rs2,500 crore last fiscal and has targeted revenues of Rs4,500 crore by 2013-14.

     

    “The second half of last year was not good and it’s apparent in our bottom line,” said Lifestyle International MD Kabir Lumba. He refused to divulge figures as the company is unlisted. “Given the current market conditions, we have lowered our growth estimates by around 10 per cent,” Mr Lumba added.

     

    Pantaloon Retail posted an increase of 7.6 Pantaloon Retail in sales for the three-month period ended March 2012, but same-store sales rose just 3.6 per cent – the lowest in 13 quarters. Retailers say demand is subdued in the first two months of the current fiscal as well. “The overall sentiment has been poor and it is reflecting even in May,” said J Suresh, CEO of Arvind Lifestyle Brands and Retail. The 10 per cent excise duty on branded garments last fiscal has impacted Arvind’s value format Megamart, which posted a growth of 11 per cent in same-store sales during the quarter against an 18 per cent increase in the year-ago period. However, its lifestyle brands business – which includes Arrow, US Polo and Flying Machine brands – grew 27 per cent in the fourth quarter in terms of same-store sales.”

     

    Same-store sales have slowed down despite retail chains extending end-of-season discounts and advancing them by up to three weeks to liquidate inventory. “This helped them post higher sales on a sequential basis. However, margins of most retailers took a hit,” said Sangeeta Tripathi, a senior analyst with Sharekhan. Margins were further squeezed by higher interest rates, fuel and real estate costs.

     

    The slowdown in like-to-like sales has forced retailers to explore new strategies to drive sales. Shoppers Stop, for instance, is focusing on store events as well as new loyalty card schemes and has recently lowered prices of private label brands by 5 per cent.

     

    Experts say stores can boost sales by improving shelf displays and promoting private labels. “Significant work can be done to make the product on the shelf more compelling for the buyer, both in terms of merchandising and placement. Retailers can also differentiate by looking at their private labels, not just as additional margins but as brands that fill a gap,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight.

     

    Source: The Economic Times
    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

  • The two decided to part ways in India by the end of this year after they developed differences over expansion strategy

    Dutch retailer Spar to end ties with Max

    By A Correspondent

     

    Dutch retailer Spar International and Dubai-based Landmark Group’s Max Hypermarkets have decided to part ways in India by the end of this year after the two developed differences over expansion strategy.

     

    While Spar was keen on partnering multiple national and regional retailers to expand in the country, Max Hypermarkets wanted a strategic investor for the business, Dr Gordon Campbell, managing director of the 31-billion euro (approx Rs2 lakh crore) Spar International said. The companies will now pursue separate growth plans in the country, they said in a joint statement. The two have decided not to renew the licence after it expires in December.

     

    Max Hypermarkets operates 13 Spar Hypermarkets across Karnataka,

    Maharashtra, Andhra Pradesh, New Delhi and the national capital region under a licence agreement signed in 2007.

     

    Viney Singh, MD of Max Hypermarkets India, said the company will rebrand its hypermarkets (large-format food & grocery stores that also stock general merchandise, electronics and apparel) once it decides on its future course. “We believe that it is good to have, in the long term, strategic investor partners to run the hypermarket business in India,” he said.

     

    Spar, which has 12,000 stores across 35 countries, does not financially invest in any market, but signs license agreements with independent retailers in different markets to use the Spar brand name.

     

    It also provides technical know-how and expertise for the front-end and supply chain for its partners. In fact, it had first entered the Indian market with Mumbai-based  Radhakrishna Foodland in 2004.

     

    Spar is now looking for multiple partners in India. “Given our experience now, we believe we have the opportunity for other partners to develop it (stores) at a quicker speed. We would be interested in tying up with 4-5 partners for different regions,” said Mr Campbell, on a call from Amsterdam.

     

    He said Spar has established contact with a few partners across regions, but refused to clarify whether they were corporates or standalone chains. Mr Campbell said Spar is willing to open supermarkets in India. The size of its supermarkets are around 1,000-2,000 square metres, while hypermarkets are above 4,000 sqm.

     

    Spar aims to finalise new relationships quickly so that its brand does not have to wind down. Campbell said this would be possible if new partners have operational stores that can be converted into Spar.

     

    Analysts say there is limited risk to brand Spar if it is absent from the Indian market for a few months because its footprint is limited. “Food and grocery is bought within a limited radius. As long as the brand’s reappearance is handled well, there is no real damage expected,” said Devangshu Dutta, chief executive of retail and consumer goods consultancy Third Eyesight.

     

    He added that it would not be difficult for Max Hypermarket to find a foreign partner, given Landmark Group’s presence in India and international retailer interest in the market. Landmark Group operates department store Lifestyle International in India.

     

    “They could also come up with their own brand and partner a financial investor as they would have the operational expertise now,” said Mr Dutta.

     

    The $12-billion organized food and grocery retail market that is projected to grow at a compounded rate of 30 per cent over next five years, according to estimates by Technopak Advisors.

     

    Source: The Economic Times
    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

     

     

  • Analysts expect all leading FMCG companies to post strong results in the fourth quarter ended March and maintain their margins in the current fiscal

    FMCG players upbeat after Q4 sales boom

    By Ratna Bhushan & Sagar Malviya

     

    Consumer goods companies and retailers expect a spurt in demand this fiscal, buoyed by indications of better-than-expected earnings in the January-March quarter backed by a revival in consumer sentiment.

     

    Analysts expect all leading FMCG companies to post strong results in the fourth quarter ended March and maintain their margins in the current fiscal, even as gung-ho investors have pushed shares of most companies to their 52-week high on the Bombay Stock Exchange this month.

     

    “The last two quarters seem to have stabilised in terms of consumption though there have been price hikes,” said A Mahendran, MD, Godrej Consumer Products. The maker of Cinthol soap and Good Knight mosquito repellant expects its fourth quarter earnings to be better than analyst forecasts of 16-22 per cent increase in revenues.

     

    Growth in FMCG product sales signals revival of consumer sentiment over 2011 when market growth slipped to 8 per cent from 12 per cent the previous year.

     

    Companies now look to ride on high-margin products, rural demand and innovations to maintain the growth momentum without taking a hit on their margins.

     

    NO DOWN TRADING

    They are buoyed by the fact that there is no significant indication of down trading, or the trend of switching to a cheaper brand due to price increase, by consumers despite 5-10 per cent increase in prices of daily use items like soap, toothpaste and hair oil. “We have not seen downtrading,” Anand Burman, chairman of Dabur India, which makes Vatika shampoo and Amla hair oils, said. He added that a combination of rural consumption and growth from mass-priced products in urban markets were triggering demand for Dabur’s hair care and oral care products.

     

    But Harsh Mariwala, chairman and MD of Marico Ltd, which makes Parachute hair oil and Saffola edible oils, warned that margins may remain under pressure. “We expect healthy top line in continuation of the previous quarter…in terms of bottom line though, margin pressures will remain because of fluctuating raw material costs and complex global cycles,” he said.

     

    Prices of menthol have shot up 40 per cent over the past two months, while palm oil prices have surged 10 per cent in the last one month. But analysts expect margin pressure to ease with innovation gaining centrestage. Then companies will gradually increase their advertising and marketing expenditure, Edelweiss Financial Services research analyst Abneesh Roy said. “We expect margins to begin slow northward trajectory in the coming months as raw material prices cool off and rupee depreciation reverses,” Roy wrote in a report early this month.

     

    APRIL BOOM

    The country’s top retailer says that retail sales have picked up speed in the past two weeks and expects healthy demand to continue in the next two quarters. “While the January-March quarter was good and grew better than the same period last year with most retail segments growing by high single digits, we are seeing an upsurge in sales in the last two weeks across all formats,” Kishore Biyani, chairman of the country’s largest organised retailer Future Group, said.

     

    He said there is an upsurge in sales of even consumer durables April onwards, adding that Pantaloon, Big Bazaar and Home Town have witnessed high double-digit growth. Apparel, toys and footwear retailer Lifestyle International’s MD Kabir Lumba said its sales grew the most in the fourth quarter. “We have seen a lift from the lower trading conditions of September to November. While we grew 22 per cent overall last year, the fourth quarter grew faster,” he said.

     

    DURABLES STRUGGLE

    Makers of home appliances such as fridges and ACs are, meanwhile, reeling under the double whammy of late summer as well as price hikes. AC sales were down by 30-35 per cent year-on-year during the quarter, while there has been a marginal 3-5 per cent growth for refrigerators. “The overall market is down due to sluggish sales of cooling products. Temperatures are yet to rise to induce AC purchases, while the price increase for input cost and excise too have been a big dampener,” Kamal Nandi, VP (sales and marketing) at Godrej Appliances, said.

     

    Prices of products have gone up by 10-15 per cent due to input cost hikes, upgradation in star ratings for energy labelling and increase in excise duties in the Budget.

     

    While consumer sentiments had improved during the Republic Day period in January due to aggressive discounts and promotions by retailers, sales were muted in February and March. Whirlpool VP (corporate affairs and strategy) Shantanu DasGupta, however, said the new fiscal year has started in positive note. “April has started off okay, but it is early days yet,” he said.

     

    “Individual companies may be growing, but that’s not due to demand. Instead, it’s led by innovation in new launches and distribution gains,” Mr DasGupta added. Electronic firms are now betting more on LCD and LED televisions, washing machines and microwave ovens for growth.

     

    “Flat panel televisions continue growth momentum since this category did not see any significant price changes this year,” Samsung VP (audio-visual business) Raj Kumar Rishi said. Samsung expects sales of summer products like AC and refrigerators to gather momentum in the second quarter.

     

    (With inputs from Writankar Mukherjee and Sarah Jacob)
    Source: The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved