Tata Infiniti opens new flank in retail war

The Tata Group today announced the formation of its second retail company, Infiniti Retail, to spearhead the group's entry into selling consumer electronics and durables. The Tata Group already has Trent, headed by Noel Tata, present in apparel retail and hypermarkets.

Infiniti Retail, a 100 per cent subsidiary of Tata Sons, plans to set up 100 stores of 15,000-20,000 square feet each by March 2010.

The first of these mega stores, branded Croma, will open in Mumbai next week and the company plans to have a national presence with 30 stores in the next 18 months. Tata Sons has infused an equity capital of Rs 400 crore to kick-start this venture.

"There are a couple of sectors that are of great interest. Retail in many forms is cascading to different parts of India and has been an area of sharply focused interest for the group," said RK Krishna Kumar, director, Tata Sons.

Infiniti has entered into a technical and sourcing arrangement with Australian retail giant Woolworths. According to it, Woolworths will manage the entire back-end operations of Croma and provide technical support and strategic sourcing facilities from its global network. The tie-up will give Infiniti access to about 6,000 products across eight categories.

Woolworths already runs a cash-and-carry operation in India through its Mumbai headquarters.

"The collaboration with Woolworths will capture a slice of exploding demand in India," said Kumar.

The company has also tied up with logistics service provider DHL to take care of product delivery to customers. Kumar said the company was also looking at developing private label retailing at Croma at a later stage.

Kumar added that for attracting retail talent for this initiative, the group plans to play its trump card of promising executives work across customer-facing businesses from retail and telecom to hospitality as they make a career progression. The group has already hired a former Shopper's Stop executive, Ajit Joshi, as CEO for Infiniti Retail.

At present, the organised retail format in consumer durables is restricted to regional players like Vijay Sales in the west and Viveks in the south. In the past, Raymond India has ventured into consumer durables retail with its Plugin chain of stores.