Vishal Retail Ltd plans 150-200 stores by 2010

Delhi-based retail house, Vishal Retail Limited is eyeing to set up around 150 to 200 of its Vishal Mega Mart stores by 2010. For the financial year 2007-08, the company is looking to set up 32 more stores across the country.

The company has also announced its debut into capital market with a public issue of equity aggregating Rs 110 crore to fund 22 of its upcoming stores.

Targetting the middle and lower middle class segment, Vishal Mega Mart stores average across an area of 25,000 sq.ft. and require a typical investment of Rs 5-6 crore per store.

"We will be using the capital raised through the IPO to fund 22 of our 32 upcoming stores this year. Already realty deals for 19 stores have been finalised. Going by the present rate at which we are growing, we hope to open 150-220 Vishal Mega Mart stores by 2010," said Ritesh Rathi, Chief Operating Officer, Vishal Retail Limited.

Adding that the company would like to grow faster than the present rate, Rathi said,"We are attaining a CAGR of 86 per cent. In FY'07 we made Rs 603 crore sales revenue compared to Rs 288 crore in the previous year. Given these rates, we believe we will be a Rs 5,000 crore company by 2010."

Around 63 per cent of the stores' revenues come from the apparel segments, while 22 per cent comes from non-apparels and 15 per cent from FMCG. Differentiating Vishal Mega Mart from its peers in retail, Rathi said,"Unlike other major retail houses, we target Tier-II and Tier-III cities as well as middle and lower middle class customers."

Vishal Mega Mart stores feature around 17 different categories for in-house brands, some of which are manufactured by the retail house itself. Rathi added that the company sets up stores in cities with a minimum population of 5 lakh.

Of the 32 upcoming stores, most of them will be opened in the southern states like Karnataka, Tamil Nadu, Andhra Pradesh. Rathi reasoned that the company is looking to have a pan-India presence and are opening stores in states where they are not present presently.

In Gujarat itself, the company is looking to open its second store in Surat and will be setting up two more stores, one each in Baroda and Rajkot in the coming months.