Pantaloon Management Roadmap + Views

You are Reading this First HereIn an exclusive coverage, we are presenting to you the road map charted for growing Pantaloon Retail‘s various business verticals as told by Mr. Kishore Biyani to Industry Analysts.

Key Business Verticals:

  • Food
  • Fashion
  • Home
  • Financial Services and
  • Health, beauty & wellness

Food Business:
The company will target the food space with three formats Food Bazaar, KB Fair Price Shops and recently acquired Adhaar stores from Godrej. Food Bazaar could reach around 95-100 towns, KB Fair Price Shops will be only focused on urban poor and hence the reach will be limited to the top 11 towns and Adhaar will be extended to the 900 smaller towns to enable the company to source staples from farmers as well. It is very likely that the company will dominate the business in this segment in the near future. 6 private label brands have been able to achieve 18% private label share in snack food category of potato chips.

The company is targeting revenues of Rs 4200 cr from this vertical in FY2009. The company retails fashion through its three key formats Big Bazaar, Pantaloon and Central. Fashion is likely to be the key focus area for the company going forward as it plans to build insurmountable leadership in this space. Footwear, sunglasses and watches are segments where PRIL accepted its relatively weakness in the fashion segment and its strategies to correct the same.

Home Retail:
The company is targeting Rs 21bn revenues in the home segment for FY2009. Home products are retailed through Home Town, E-Zone, Home Bazaar and Home Express. The company is already the market leader in the consumer electronics space with revenues of around Rs7bn in F2008 and expected revenues of Rs12-13bn in FY2009. The company has already been able to capture 18-20% market share in Bangalore and is planning to have a similar share in Kolkatta. In the furniture and home improvement segment, the company is nearly 3-4x larger than the closest competitor.

Health, Beauty and Wellness:
Company’s share of business in this segment is relatively very small and muted. It has decided against pursuing expansion of pharmacies and its plans to launch health & wellness clinics with Manipal Hospitals has failed. JV with Talwalkars for a gym rollout is the only exciting venture on its cards.

Financial Services:
Through its listed subsidiary, Future Capital, the company plans to distribute insurance, mutual funds, consumer loans and foreign exchange to its captive customers. We believe that this space is really crowded and mismanaged to the best due to poor qualifications of Financial Advisors. In a financial market situation like that of today, Investors / Customers are irked and may never comeback seeking products. We believe this Segment is likely to under perform.

Related Reading:
India Retail Business Insight and Analysis – Part -1
India Retail Business Insight and Analysis – Part -2