Biyani chases growth, revamps Big Bazaar
SELLING WITH A DIFFERENCE Move towards small goods and smaller stores to avoid home delivery, cut costs
MUMBAI: Hurt by sluggish sales growth, Kishore Biyani-led Future Retail is restructuring its businesses to focus more on apparel and fast moving furniture while closing down some shops and expanding others.
Future Retail will restructure its home improvement retail business, Home Town, with the company looking to exit from segments such as heavy furniture, plumbing and flooring and other products that need to be delivered home. It will focus on stocking products that shoppers can just pick up and go, such as kitchen essentials, according to people in the know. Also on cards are more smaller stores, which will help cut costs.
“Home Town is being restructured to reduce inventory and cut losses… We don’t rule out Future Retail exiting the segment completely,” said Amnish Aggarwal and Gaurav Jogani, analysts at Prabhudas Lilladher.
In the October-December quarter, Home Town’s samestore sales grew just 2% year-onyear, down from 7.4% in the JulySeptember quarter. Same-store sales measure sales at stores that are at least a year old.
As of December-end, Future Retail had 34 Home Town stores, down from 39 at the end of December 2012. Total selling space is down to 1.39 million sq feet from 1.54 million sq feet.
A spokesperson for Future Retail said the company is not restructuring Home Town.
“There has been no specific restructuring at Home Town. We are only testing Home Super Market, a new format, which will essentially stock items you can pick and go. These stores will not stock items that require to be delivered to your home,” the spokesperson said.
The economic slowdownhas hit areas like home improvement and consumer durables. Even in value retail, such as Big Bazaar hypermarket and Food Bazaar supermarket, Future Retail reported a same-store sales growth of just 3.3% in OctoberDecember, compared with 8% in the July-September quarter and 10.4% in April-June.
According to Prabhudas Lilladher, 15 Big Bazaar and 18 Food Bazaar outlets have shut in 2013. The Future Retail spokesperson said only those Food Bazaar stores that were a part of Pantaloons chain had closed.
“Future Retail demerged Pantaloons to Aditya Birla Group in April 2013. The Food Bazaars that were part of the Pantaloon outlets have closed as Aditya Birla Group has their own More brand of super markets,” the spokesperson said.