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Pantaloon – Future Group – Controlled Growth Strategy

September 30, 2009


You are Reading this First HereThe Management of Pantaloon Retail India Ltd has told during an interaction about the company’s calibrated approach to growth. Here is an excerpt on its strategy going forward.

Company is looking at unlocking value in the value retailing (Big Bazaar) format, where they believe they have reached a critical size. Management said they are in 6-7 strategic discussions with different parties. They didn’t specifically comment on Carrefour, Bain etc.

Mr. Kishore Biyani said,

PRIL got into too many spaces, too soon, in trying to capture consumption at various levels. Also, the company expanded in a growing high cost economy, for beating competition. Now sober from the slowdown, the company will take a more calibrated approach towards expansion. We are envisaging some strategic moves on the insurance and financial services business (Future Capital).

PRIL will look at consolidating its existing businesses in three buckets: (a) retail, (b) financial services and (c) support businesses (Future logistics etc), in that order of priority. Anything that doesn’t fit in any of these three would be disposed off.

Inventory psf is targeted to be brought down to Rs1600 (from Rs1849 psf in FY09) through big investments in the supply chain, back-end and warehouse management.

New private Label Ekta – Ekta is a branded food staples product directed at specific communities. The company is also planning to launch its own brand of toothpaste.

Space addition of 3m each is planned over the next three years (consolidated entity). Future expansion will be centered on food, fashion, home, general merchandise and electronics.

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