Provogue to set up 6 malls at Rs 1,500 cr

Provogue India, through its joint venture Prozone Liberty, will set up six malls in the country. The joint venture will invest a total of Rs 1,500 crore (Rs 250 crore apiece) in these malls.

The JV has already finalised locations in Aurangabad, Mysore, Indore, Jaipur and Hyderabad. The malls will have a whole range of retail formats including hypermarkets, speciality stores, supermarkets, multiplexes, book and music stores, exclusive brand outlets, said Provogue Managing Director Nikhil Chaturvedi.

The malls will bear the name of Prozone and the joint venture will follow a lease model while letting out property in malls.

Stepping up discount retailing operations, Provogue will set up six stores, to be called Promart, by the end of this fiscal. The company plans to take this number to 20 by 2009, said Chaturvedi.

The stores will sell as many as 70 brands, both domestic and international, in womenswear, kidswear, and menswear, at a discount. The company will focus on B and C cities and each store will have a space of 50,000 sqft. The first store will come up in Ahmedabad and the company is scouting for properties in Pune, Jaipur, Kolhapur, Nasik, Chaturvedi said.

On the revenue model, he said it would depend on location to location and a mix of fixed rent and revenues. "It will be a distribution medium for brands. Internationally, discount retailing is quite popular and in India also, it is catching up very fast. It will greatly help retailers whose cash is always blocked in unsold inventory. Brands need this and there is a huge opportunity for us. We will invest in the infrastructure and the brands will take care of fixtures," he said.

As a precedent to its foray into malls and discount retailing, Provogue had entered into a joint venture with UK-based Liberty International called Prozone Liberty through its subsidiary Prozone.

Liberty had invested Rs 202 crore in the venture and owns 25 per cent in the joint venture. Liberty runs one of the largest shopping centres in the United Kingdom.

Provogue also raised Rs 146.25 crore by placing preference shares with six investors at Rs 450 per share. New Vernon, Blackstone, Fidelity, Genesis Capital, Artis Capital and Liberty International bought 32.50 lakh shares of Provogue.

"We will leverage on the Rs 350 crore we raised through private equity and JV," he said. On the company's growth strategy, Chaturvedi said, "Now we have a portfolio of brands. We are investing in malls with pure retail play. Provogue will evolve into a consumer-focused retail company," he said.