Megamart to tap tier II cities in South

Megamart, the retail arm of Arvind Brands, that has lined up a Rs 400 crore expansion plan, intends to tap into the secondary and tertiary cities for growth in the next one year.

At present, South India is the biggest market for Megamart since Arvind Brands is based in Bangalore. It intends to set up Megamart stores in Mysore, Mangalore, Guntur, Vijayawada, Salem, Vishakapatnam, Pondicherry and many other emerging cosmopolitan cities in the four southern states.

"Most of the apparel brands of Arvind Brands are doing extremely well in these secondary and tertiary cities. There is a huge demand for some of the premium brands like Arrow. We expect significant sales in these cities," Megamart Business Head K E Venkatachalapathy said.

Megamart has 75 outlets spread across 25 cities with each store measuring 3,000-5,000 square feet. "At present, Bangalore alone is the largest contributor in terms of sales for the company," he pointed out.

Apart from Arvind Brands, private labels, including international brands are sold through Megamart.

The company plans to adopt a dual retail strategy. It includes setting up 30 large format stores called 'Megamart Outlet Centre' and increasing the number of existing small format Megamart stores to 250 in the coming years across the country.

The 'Megamart Outlet Centre' will sell all Arvind Brands (Excalibur and Flying Machine), VF-Arvind Brands (Nautica, Gant, Kipling, Jansport) and retail 80 other national and international brands.

They also include Madura Garments, Raymond, Reebok, Nike and Adidas. The large format stores will be modelled on the lines of lifestyle stores such as Shoppers' Stop and Lifestyle.

"Megamart Outlet Centre will be just like any other big retail store. We see a lot of demand for a variety of lifestyle goods from the consumers. We will cater to such consumers," he stated.

While 70 per cent of the goods sold will be apparel, the remaining 30 per cent will be made of footwear, luggage, home furnishing, accessories such as belts, caps and wallets, and personal electronic goods like laptops, mobile phones and i-Pods.

"All products that an urban consumer looks for will be available at the Megamart Outlet Centre. We will not retail white goods," Venkatachalapathy pointed out.

The large format stores (40,0000-60,000 square feet) are being set up in Chennai, Hyderabad, Pune and Bangalore.

"The focus will remain on generating sales from both large format and small format stores. South India will continue to drive the growth," he added.

Venkatachalapathy said the company expected a turnover of Rs 160 crore for the present fiscal. "The retail expansion plan is aimed at enhancing the turnover to Rs 400 crore next fiscal," he said.