The Hindu : Business : Spencer’s Retail ties up with U.S. bakery chain

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Wednesday, Jul 16, 2008
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Spencer’s Retail ties up with U.S. bakery chain

Special Correspondent

To set up back-end factory in Bangalore

Shop-in-shop stores to be launched across the nation
Forms joint venture named Novel Confectioners

KOLKATA: RPG enterpise Spencer’s Retail has tied up with Au Bon Pain, a U.S.-based fast dining and bakery café chain to launch outlets across India beginning with a flagship store in Bangalore by December this year. Au Bon Pain means ‘the place of good bread’ in French.

Sanjiv Goenka, Vice-Chairman of RPG Enterprises, said that an agreement had been signed for a master franchisee which would be owned by a joint venture of Spencer’s and Varin Narula, director and promoter of Au Bon Pain, Thailand, the brand’s first outlet outside the U.S.

A joint venture, called Novel Confectioners Ltd, has been formed in which Mr. Varin will have a small equity.

To invest Rs. 50 crore

Addressing a press conference here on Tuesday, Mr. Goenka said Rs. 50 crore would be invested to set up a back-end factory in Bangalore and 100 standalone stores, mostly in the south.

“While we felt that Bangalore, with its international population, was a great place to launch a brand like this, the other stores would be in Hyderabad and Chennai and Tier-1 and Tier-2 cities in the next 18 months. The menu would include soups, sandwiches, salads, stews and bakery items.”

Shop-in-stores

Later, shop-in-shop stores would also be launched with a pan-India roll-out covering the north and the east.

Bernard Platt, Senior Vice President, Franchising, said the Boston-based brand operates in over 200 locations in the U.S. and other countries. Mr. Narula, who has been associated with the brand’s first foray outside the U.S., said that based on the success in Thailand over the last 11 years, he was confident that Au Bon Pain would soon become “India’s finest bakery café”.

To queries as to whether the delay in the Kolkata launch of the U.S. brand was linked with the problems encountered recently over a Spencer’s hyper store in Gariahat here, Mr. Goenka said although sales had been affected but they were picking up and “now the issue is behind us”. He declined to elaborate further on this.

Spencer’s, which opened its first store in Chennai in 1863, sustained its operations to emerge as India’s first modern retail format store when it launched its first hypermarket in Hyderabad in 2000. It now has 400 stores and is planning to open 200 more this year, targeting a Rs. 2,000 crore turnover.

This is Spencer’s second international tie-up this year, the first being one for kids’ toys with Woolworths of the U.K.

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