Vishal Retail's Rs 110 crore IPO may have been over-subscribed 81 times, but the road ahead for existing organised sector retailers is not that smooth. While most firms, such as Vishal, have aggressive plans to expand their store network, sales in existing stores are growing at a pace that's slower than expected. In the case of Pantaloon, a research note by CLSA Asia Pacific Markets points out, in just the three months between March and May 2007, Pantaloon added almost a million square feet to its existing retail space. The problem, however, is that sales growth in existing stores has plummeted "� while sales growth does slacken off in the summer months, this year's slowing has been unprecedented. The slowdown in the value retailing segment, according to CLSA, is the real problem since 60 per cent of revenues come from this segment. While it's early days yet for Vishal Retail (it began in 2001 and has 50 stores with 1.3 million square feet of space which will more than double in two years), its same store sales' growth has also fallen, from 21.3 per cent in 2005-2006 to 11.9 per cent in 2006-07.
