The Hindu : Business : Trent draws up investment plan for new hypermarkets

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Trent draws up investment plan for new hypermarkets

— PHOTO: SHASHI ASHIWAL

EXPANSION SPREE: Noel Tata, Managing Director, Trent, launching Star Bazar in Mumbai on Friday.

MUMBAI: Trent, the retail arm of the Tata Group, has drawn up a Rs. 2,000-crore investment plan for setting up 50 hypermarkets, Star Bazaar, over the next five years, a top company official said.

“We are launching 50 new hypermarket stores ‘Star Bazaar’ in the next five years at an investment of around Rs. 2,000 crore,” Trent’s Managing Director Noel Tata told reporters here on Friday.

Trent aims to expand to 100 stores across formats by 2009-10. Funds would be raised through internal accruals only, Mr. Tata said.

The company has launched its second Star Bazaar at Andheri in Mumbai on Friday. Spread across nearly 75,000 sq. ft. over two floors, Star Bazaar is a one-stop shop.

“Higher property price has hit retail expansion. In hypermarkets, property is a major and significant cost in our business,” Mr. Tata said.

Commenting on inflation affecting the retail business, Mr. Tata said, “People are looking for better value in inflation. This is the right time for us to be opening hypermarkets to provide value to customers.”

“We have huge pressures on cost, both in terms of raw material and staff. We have been able to absorb quite a substantial portion of those increased costs,” he said, adding that the best way of driving cost down was growing the business as fast as possible. The company has established 31 Westside departmental stores measuring 15,000-30,000 sq. ft. each in Mumbai, Bangalore, Hyderabad, Chennai, Pune, Delhi, Noida, Gurgaon, Kolkata, Nagpur, Indore, Baroda, Surat and Ludhiana.

The company hopes to expand rapidly with similar format stores that offer a fine balance between style and price retailing.

“We have taken up aggressive expansion programmes by opening 12 new Westside stores, five Landmark and a few hypermarkets,” Mr. Tata said. Trent is also planning to launch three more European brands, he said. Last year, Trent tied-up with Italian apparel retailer, Benetton Group SpA, to run and manage the latter’s premium fashion brand, Sisley, in India. Trent currently manages six Sisley stores in India.

Trent has posted revenues of Rs. 716 crore and a net profit of Rs. 33.64 crore on a consolidated basis in 2007-08. It has clocked a turnover of Rs. 631.86 crore and a net profit of Rs. 33.20 crore in 2006-07. — PTI

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