Top

Pantaloon Retail to focus on Lifestyle

February 11, 2007


Faced with margins pressure and competition from Mukesh Ambani and Bharti-WalMart, Kishore Biyani has taken a “U” turn in his directions for Pantaloon Retail India and may eventually get out of food-grocery business and play only in the lifestyle business segment.

For the quarter ending Dec-2006, Pantaloon recorded a sales growth of 63% and PAT growth of 37%. Most of the growth came from newly opened outlets. Same store growth for Value and Lifestyle retailing were 14% and 16% respectively.

Margins on Food and Grocery retail is mere 12-15% depending on the strength of your backend, Lifestyle retailing offers a healthy 30-45% margins. With deep pockets, Mukesh Ambani will definitely control a majority of this market until Bharti-WalMart establishes itself. Pantaloon’s backend is not strong enough and I recommend a total exit from the business ASAP and strengthen in Lifestyle retailing.

Kishore Biyani Said,

We are looking at business margins at the end of the day. We have to be in grocery retail which is significant part of consumer spends. But the margins will come from Lifestyle retail.

Kishore Biyani wants to retail every product without realizing how much he can do.

Comments

Comments are closed.


Bottom