In just over two years, Reliance Retail, Reliance Industries’ retail subsidiary, has emerged as India’s 2nd largest retailer with retail space of 4.2m sf (Pantaloon consolidated 10.5m sf).
Its equity capital as on Mar-08 was Rs40.5bn and as on Dec-08 it had invested Rs52bn. Over the last six months, the company has been reviewing its formats, operations and strategy.
It has closed over 20 stores out of 900 [see chart below exclusively prepared for our readers], right-sized stores and laid-off some 600 out of 24,000 employees and associates. In Aug-07, it had launched India’s largest hypermarket store across 1.6m sf. This store has now been reduced to 1m sf. While it has cut the size of hypermarket stores and some specialty formats, the size of Reliance Fresh (convenience store format) is being increased.
As per the management, 75% of the stores have achieved break-even and carry just one month’s inventory. Management is reportedly re-negotiating rents for most of the properties to lower them by 20-30%.