Welspun spins new mobile store format

Welspun spins new mobile store format
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First Published: Sun, Dec 21 2008. 10 56 PM IST
Updated: Sun, Dec 21 2008. 10 56 PM IST
Mumbai: Welspun Retail Ltd, part of the Welspun Group, is adopting a new format to cope with rising costs and an economic slowdown.
The retailer’s Welhome brand has introduced Wheel Home for the home décor segment that will go to a customer’s home, said Welspun Retail’s director Deepali Goenka.
That could cut costs by 20-25% compared with fixed retail stores and achieve earlier break even, she claimed.
“In the current scenario, where cost-cutting is imperative, this kind of format helps a lot as it doesn’t call for huge investments, but still reaches the right audience,” she said. Welspun will also cut the number of varieties it carries in Welhome to 2,000 from about 5,000, she added.
Wheel Home “stores” will have only between 50-100 offerings, Goenka said. “We have introduced the format not only to save on real estate costs, but also to create brand awareness.”
She claimed the mobile stores could help identify consumer behaviour in certain areas and help in future store location-planning decisions.
Welspun has leased five vans, which will go up to seven by end-January. Goenka declined to give financial data for the mobile stores. The plan is for the vans to replenish inventory from nearby stores, said Goenka, adding there is often a store within a 40km radius. Wheel Home will be launched in Uttar Pradesh, Rajasthan, Maharashtra and Punjab within eight months, with two vans for each region. Welspun has around 250 Welhome stores, of which 102 are company-owned and the rest franchised.
“Like other retailers, we have also re-negotiated rentals,” said Goenka. “In prime localities, the rents have come down by around 25-30% while in other locations, it has come down by around 40-50%.” While the company plans to close some unviable stores, Goenka declined to provide details.
“The home décor business requires a large (inventory) base and to display all of it in a mobile van is difficult,” said Retailer Association of India CEO Gibson Vedamani. “Customers will definitely want more options and variety, for which they will want to visit the stores. It has also to do with the experience of shopping.”
jharna.m@livemint.com
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First Published: Sun, Dec 21 2008. 10 56 PM IST