Mumbai: Buoyed by 110% growth in the current fiscal, Aditya Birla Retail chain ‘more...’ plans to roll out 80 stores this year, but may wind up 10-20 existing outlets as part of a clean-up operation.
“We want to take our network of stores to 720-730. So we will open 80 stores, but its not actually 80 because we may close another 10-20,” Aditya Birla Retail (ABRL) CEO, Thomas Varghese said.
The company operates just two hypermarkets at Mysore and Baroda and will set up six to eight stores in the format by end-March.
“This fiscal, we are focusing on hypermarkets. We are definitely looking at six to eight hypermarkets,” he said.
ABRL is eyeing a sales turnover of about Rs1,600-1,700 crore in FY10, a 45% jump in growth compared with the previous fiscal.
“We grew by more than 110% last year. We may not be able to keep up that scorching pace, but we’ll grow by about 40-45% this year,” Varghese said.
Sales turnover for FY09 was close to Rs 1,150 crore.
Starting with the acquisition of south-based Trinethra in early 2007, Aditya Birla Retail created a network of 710 stores in 20 months, of which it shut 76 in the last six months.
”That was part of my cleaning up operation. The last six to eight months have been a wake-up call for the industry. We are going to focus on consolidation this year,” he added.
The retailer will open one hypermarket each from June till September in Aurangabad, Indore, Mumbai and Bangalore.
It is also in the process of renegotiating rentals and may wind up its Baroda hypermarket if it “cannot get the rents down”, Varghese said.
“We are not going for hypermarkets beyond 65,000 or 70,000 square feet, because our experience with Baroda has not been very good, which is spread over 85,000 square feet,” he added.
With operations spanning 13 Indian states, ABRL now wants “to saturate a state” by venturing into smaller cities.
“Our new supermarkets will be opened primarily in the South. The whole effort this year is to make the South network profitable, because it is already coming very close to protability,” Varghese said.
He ruled out the idea of bringing onboard strategic investors, but said the company is open to funding from private equity players.
“We are not looking for strategic partner,” Varghese said, adding “We would not want to divest any equity at all, because I personally think that this is going to be a very valuable company.”