Textile majors ramp up retail shop investments

With textile retailers expecting over a 25 per cent rise in outsourcing from India in the post-quota free scenario, sector majors such as Welspun India, Alok Industries, Vijay Textile Ltd and Bombay Dying are planning to raise investment in retail shops in the country.

"We are planning to invest heavily in opening exclusive 'Spaces' stores across the country and Welspun would run the stores itself. We aim at opening 20 such concept stores in the next one year to exploit the potential in the Indian home furnishing segment," said B K Goenka, vice-chairman and managing director, Welspun Group.

The stores would be owned and run by Welspun's domestic retail division and would function as independent profit centres. Recently Welspun had hired Anshuman Singh as chief executive officer to handle its domestic retail division.

Welspun accounts for a quarter of the total home textile exports from India, which makes it the fifth largest producer of towels in the world and the largest in Asia.

The company exports more than 90 per cent of its towels to more than 34 countries. Internationally the company exports more than 68 per cent of its production to the US, 23 per cent to Europe and the rest to the Middle East, Australia and Mauritius.

The company's strategy is to create an end-to-end presence from fibre to home textile retailing.

"We are stressing on improving our quality of terry towel and also adding manufacturing capacity of terry towel. The focus also would be on the domestic market where we are planning to start setting up our own exclusive set of showrooms to sell terry towel and bed linen under the Spaces brand," said Swapan Nath, director, Welspun India.

Currently, over 90 per cent of the company's revenue is generated through exports and the company have targeted over a Rs 2,000 crore turnover in the home textile segment in the next five years, with exports continue to constitute around 50 per cent of the turnover.

Singh said, "The Indian home furnishing market is lying neglected as there is no focus on fashion in the country's home furnishing sector which has been emerging fast with the rise in people's purchase power. The retail outlets would be initially set up in metros, following which we would open stores in the B and C category cities. Print and electronic media campaigns would be unfolded soon to back our retail initiative."

Welspun would aim at wooing the super-premium segment. Apart from concept stories, Welspun would also sell Spaces brand products through 22 distributors across the country with a presence in 800 multibrand outlets.

The Secundrabad-based Vijay Textiles, an integrated manufacturer of home furnishings, has embarked its expansion plans. The company plans to invest over Rs 50 crore in the opening of a chain of speciality retail stores in India and abroad for the home furnishings segment, said a company press statement.

"We put lot of effort in creating new designs for producing exclusive home furnishings. We do not mass produce high quality designs in order to retain exclusivity. As a result, we do not have the economies of scale to compete on price, which an exporter should possess in a free market economy," said Vijay Gupta, managing director, Vijay Textiles.

The company will be replicating its successful pilot outlet at Hyderabad into another retail store in the city, which is expected to be operational by mid-2005.

The company plans to open such retails stores in Vijaywada and Vizag in the next financial year. These outlets will cost Rs 10 crore each. The estimated pay-back period is expected to be below three years.

The company is also considering to establishing franchisee stores in Atlanta, Chicago, New Jersy, Singapore, UAE and Australia.

Alok Industries is rapidly expanding capacities to create scale for impressive progress in the home textile business. The company is currently running a strong order book in both the home textile and fabrics business.

Even Bombay Dyeing is looking at opening its retail outlets, get into the malls and infuse in around Rs 400 crore for updating its machines and to bring in the necessary changes.

The company in September 2003 had launched a range of home linen after staying low profile for almost a decade. This move was part of its market activation programme to focus on the changing lifestyle of customers and evolving market place.

Recently, the company had organised a distributor's meet where the complete range of home linen in more than 150 designs in bed and bath category, sarees and dress material were on display.

Bombay Dyeing's new home linen range is of international quality with new designs, colours and patterns. Subsequently, the company has launched three promotional campaigns in the last 18 months.