Mumbai: Future Group, which runs retail chains such as Pantaloon, Big Bazaar and Central, plans to sell its private label products to other retailers, to expand this business and increase awareness of its in-house brands. This could happen as early as March 2008.
Private brands, or those that are exclusively created for and sold at a retail store or chain, are fairly common even though organized retail is still fairly nascent in India.
Department store chain Westside (from Trent Ltd, a Tata group company) sells mostly brands created exclusively for it while Shopper’s Stop Ltd, another department store chain, sells outside brands and some of its own.
Future Group stores sell a mix of both private labels and other popular brands both in food products and apparel. Its move to put its brands on the shelves of other retailers will be the first such step in India, and comes at a time when large organized retailers have been accused of eating into the business of smaller mom-and-pop stores, taking away customers from them in the main cities where they operate.
Future Group is working on increasing its advertising to make its brands better known and more popular in smaller towns and cities, apart from the metros and other large cities. It has launched television advertising for John Miller shirts, which could be among the first Future Group brands to become independent.
“Having generated a certain amount of consumer franchise, we would like to extend the reach of our brands to places where our retail chains have limited or no presence,” said Santosh Desai, chief executive of Future Brands Ltd (FBL), a firm that is part of the Future Group and which manages brands belonging to it.
Over the next year, three to four of the group’s apparel brands, including John Miller, denim wear brand Buffalo jeans and mass market fashion wear brand DJ&C, will become available at other stores. Later, food brands, including Tasty Treat and Fresh-n-Pure, will also be sold through kirana stores, or small neighbourhood shops and local stores.
Future Group is the parent of India’s largest listed retailer Pantaloon Retail (India) Ltd. The brands it plans to grow and sell elsewhere are currently available at the 35-store strong department store chain Pantaloon and the 75-store strong hypermarket chain, Big Bazaar, among others.
A retail consultant said Future Group would have to acquire new skills to do this.
“Such a business needs a distribution network, which is similar to clothing brands or consumer companies,” said Arvind Singhal, chairman of Technopak Advisors, a New Delhi-based retail consulting firm. “They will have to become a Marico, HUL, or Nestle apart from being a retailer.”
HUL, or Hindustan Unilever Ltd, is the biggest manufacturer and distributor of fast moving consumer goods in India and sells brands such as Lux and Colgate.
FBL “will have to build brands in a way that people will know them and want them”, Gibson Vedmani, chief executive of the Retailers Association of India, said. “The brands will have to be well known and not have a store name attachment to be sold independently.”