LNB Textiles to double retail outlet space soon

LNB Textiles, holding company for the apparel retail brand Shree Krishna Collection (SKC), is to more than double its retail outlet space soon to gain critical mass before the retail sector is opened up to foreign direct investment.

LNB's managing director Praful Bisani told a press conference today that the company plans to ramp up its retail space from the current level of 67,000 square feet to 1.62 lakh square feet shortly.

The expansion will happen in two stages. SKC will open a 25,000-square feet showroom in Coimbatore this week, besides a new showroom in Chennai. Each showroom is to be opened at an investment of Rs 10 crore (SKC operates through both owned and leased showrooms). A month later, another 35,000 square feet of space would be added to its old showrooms in Chennai.

SKC retails its own as well as other apparel brands. An official explained that the aim now was to ramp up the company's retail space before MNCs with deep pockets get in once the sector is opened up.

With a critical mass, a company such as SKC would be in a position to withstand competition, he added.

In addition to apparel, SKC may soon start selling other items such as watches. The aim is to stock items that have begun to attract the attention of youth, who are expected to emerge as the biggest spenders, the official said.

SKC's announcement is in line with the strategy of other south India-based retailers such as Viveks who have begun to look for funding to rapidly grow in size. Retailers have said that critical mass was the key to survive in a more competitive era.

Bisani said that SKC plans to expand its base outside of Tamil Nadu too.

The increase in retail space and thereby volume is considered the key to offer merchandise at competitive rates.

SKC recorded a turnover of Rs 57 crore in 2004-05. Company officials said that following the expansion of retail space, the turnover was expected to reach Rs 175 crore by 2007.

Panagal Park makes big biz

The shopping area in Chennai around T Nagar's Panagal Park is the largest (in terms of business) in the country, said Praful Bisani, managing director of LNB Textiles.

Bisani estimated that retail outlets around Panagal Park generated business of at least Rs 5,000 crore every year.

Officials from the company estimated that textile and jewellery showrooms made up about Rs 2,000 crore each of the business. The balance came from miscellaneous items.

More than half the business around Panagal Park is in the form of cash transactions, the officials said. A lot of shoppers in the area come from outside Tamil Nadu.