Grabal Alok to set up Store 21 outlets in India

After turning around Hamsard, a loss-making retailer in the UK, Grabal Alok Impex, a part of Alok Industries, is planning to launch Store 21, previously owned by Hamsard, in India soon.

Grabal Alok Impex, a joint venture between textile company Alok Industries and Austria's Grabal Group, acquired Hamsard in 2006. Grabal Alok is planning to set up 500 stores of Store 21 in the country in five years. The first store may start next year.

Grabal Alok is eyeing Rs 500 crore revenues from the venture on an investment of Rs 250 crore. The joint venture's subsidiary Grabal Alok UK has nearly 205 stores in England, Scotland and Wales.

Grabal Alok bought a 75 per cent stake in Hamsard , which owned QS chain, for 16.4 million pounds in December 2006. Post-buy, Hamsard was renamed as Grabal Alok UK and QS as Store 21. Hamsard had a topline of 110 million pounds in 2006-07. The company plans to open 300 Store 21 stores in the UK in the next few years.

Grabal Alok effected many changes such as price cuts, change in sourcing and rebranding to turn around the loss- making Hamsard, said Dilip Jiwarajka, managing director, Alok Industries. The chain had losses of 20 to 26 million pounds every year for the last three years.

According to him, the shifting of sourcing from Europe to Asia could be a major factor in achieving better margins.

"Currently, we source nearly 35 per cent of products from India. We will take it up to 70 per cent ,'' said Jiwarajka. Hamsard used to source about 80 per cent of its garments from the UK.

The company also cut prices of its merchandise at Store 21 by 40 to 50 per cent to compete with local retailers such as Primark and Peacock which have a similar profile.