Diversified retail player Vishal Retail today said the group is undertaking re-negotiation of rent agreements with property owners for a 25-50 per cent reduction in rentals and also plans to close down, relocate and resize stores to achieve economic viability.
The company's comments came close in the wake of its announcement last week to close down two of its stores in Mumbai and Jodhpur, respectively.
"We are in the process of re-negotiating rentals with many of our property owners and are looking at achieving 25-50 per cent reduction in rentals, in line with the downslide in realty prices," Vishal Retail Group President Ambheek Khemka told PTI.
"We are also planning to relocate stores, which are economically not viable or whose rentals are more than market rates and resize others to make them more profitable," he said.
He said the company is undertaking a study to look at economic viability and rental state of all its stores.
"We are identifying stores to find out where we need to resize them, close down or relocate to some other location. The process will take some time to complete," he said.
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Vishal Retail's latest stand comes a few months after the retail giant cut down its turnover target to Rs 1,500 crore for the current fiscal, down from Rs 1,800 initially planned.
The company, which has currently around 185 stores, including hypermarkets and small-format stores across India, had clocked a turnover of just over Rs 1,000 crore in 2007-08.
When asked about plans to close down any more stores, Khemka said: "Not immediately. We will first finish the viability study and then look into the matter."
He admitted that the company's stores, specially the ones in metros and Tier I cities, have witnessed reduction in footfalls and sales.