Vivek to start 100 new stores

Vivek Ltd, the leading consumer durable retailer in the south, is planning to add 100 stores to its existing 54 stores in Tamil Nadu and Bangalore, by the end of fiscal 2009-10. The retailer is also starting to look northwards and plans to establish a nationwide presence.

In the first stage, the company will add 30 stores in Delhi, Hyderabad, Vishakhapatnam, Vijayawada and other areas in Tamil Nadu, Karnataka and Kerala. It has 45 stores in Tamil Nadu and 9 in Bangalore.

"The consumer durable industry in north hasn't grown. There is big business but it is highly fragmented. So we think there is potential for us to grow", said B A Kodandarama Setty, managing director, Vivek Ltd.

The retailer will invest Rs 125 crore for the opening of 100 new stores between April 2006 and March 2009. The company is mulling an initial public offering or private placement, with a combination of debt and equity, to raise capital required for investment. A final decision on this will be taken soon.

The company, which is estimated to close the current fiscal with revenue worth Rs 310-325 crore, is also planning to introduce its private labels. These private labels, which are expected to be launched in the first quarter of 2006-07, will contribute 10-20 per cent of revenues in the long run, said Setty.

Senior executives from the company have been visiting China, Thailand and Singapore for possible sourcing arrangements. Setty does not rule out sourcing from local manufacturers.

With consumer durable retailers planning aggressive expansion across the country including Reliance, Vivek claims it has not only a headstart but also an understanding of the business unlike others.