Croma, the consumer durables and infotech (CDIT) chain of Tatas, is getting into a new retail format to offer best-selling products from its stores. It also plans to set up shop-in-shops inside Star Bazaar, the hypermarket chain of group company Trent, to boost revenues.
The stores under the new format are called ‘Croma’ and will be of 4,500-6,000 sq ft in size. The chain already has Croma Megastore (8,000-12,000 sq ft) and Croma Zip (less than 3,000 sq ft).
The chain plans to set up eight stores under the new format in the coming months, including three in Chandigarh, Panchkula and Mohali in two months. It already runs two such stores in Bangalore and Pune.
“We can not get 8,000 to 12,000 sq ft space in all cities and sometimes not sure about opening of malls, but we do not want to miss these localities. These stores have better per sq ft realisations. The initial stores are doing exceptionally well,” said Ajit Joshi, chief executive officer of Tata Sons-owned Infiniti Retail, which runs Croma stores.
Croma also plans to set up shop-in-shops in Star Bazaar. Next, the CDIT chain of Videocon, already has a shop-in-shop arrangement with Star Bazaar for the latter's Aurangabad store. “Based on the pilot project, we will decide to open more such shops, but we will not open in a city where Croma’s stores are not present,” he said.
It initially opened large stores of 20,000-22,000 sq ft on the lines of its Australian partner, Woolworths, which had a format, Power House. But later it came out with stores of smaller sizes.
“Very soon, we corrected ourselves because we don’t have such blocks. Then those kind of properties were blocked for big retailers. Big brands do not necessarily have the kind of width and breadth they have abroad in India,” Joshi had told Business Standard in a recent interview.
“One golden rule we followed from day one is that we do not repeat SKUs (stock keeping units) in our stores. If we display one particular 32 inch model of a television, that is it. We will not put one more set on display. That forced us to reduce the size of our stores,” he added.
However, Next, which competes with Croma, is coming out with larger stores to offer better product mix and ambience. It has also adopted the franchisee route to increase its footprint.
The CDIT market in India is estimated to be around Rs 1,00,000 crore and organised players account for a fourth of the total pie.
Set up in 2006, Croma runs 64 stores and posted revenues of Rs 1,540 crore for 2010-11. It expects to achieve break-even at the company level by this financial year.
Out of Croma’s total revenues, 55 per cent comes from IT products and accessories.
