New Delhi: Retailer Indiabulls Retail Services Ltd, under fire for non-payment of dues to several vendors and coping with an economic slowdown that has seen retail sales in India fall by between 10% and 12%, is convinced the situation calls for some cheer and is preparing to unveil a new name, Happy Store, a new logo, a smiley face transposed on a cheerful yellow shopping bag, and a new tagline—“A bagful of smiles”.
“Common sense” dictates that Indiabulls Megastore isn’t a name that may “connect too well” with consumers, said Anil Lepps, chief executive officer of Indiabulls Retail, who declined comment on how much the company plans to spend on its rebranding effort.
Indiabulls Retail, the retail arm of Indiabulls Group, a company with interests in businesses such as infrastructure, real estate, financial services, multiplexes and power, entered the business through its late-2007 acquisition of Piramyd Retail Ltd from the Ashok Piramal Group for Rs208 crore. The Piramyd chain was rebranded Indiabulls in January; the 33 smaller grocery stores were branded Indiabulls Mart and the nine bigger lifestyle ones, Indiabulls Megastore. By September, Indiabulls Retail had shut four of the nine stores, and at least 20 of the grocery stores.
Many of its payment disputes date back to late 2007 and are legacy of the Piramyd acquisition, Lepps told Mint in a 13 December story.
Lepps said the new identity would be promoted through television and print ads and explained the company’s restructuring efforts in recent months as a run-up to creating a new identity.
“We thought we had this car which needs some repair…we repair(ed) a little bit...,” said Lepps, referring to Piramyd. “Then we realized the car we inherited is so badly damaged that it made sense to put it in the workshop for 10-20 days, fix it nicely and then take it out and start driving.”
Indiabulls’ effort to create a new identity comes at a time when the retail business in India is slowing as a result of the overall economic slowdown. Zahir Abbas, associate director, retail and consumer business at consulting firm Technopak Advisors Pvt. Ltd had said in the 13 December story that retail sales across the country were down 10-20%.
Another expert said a new identity could solve Indiabulls’ image problem.
“I think its a smart thing to do...I don’t (think) there has been enough time or opportunity of the right kind for Indiabulls to establish in a strong way so there is no downside,” says Jayant Kochar, managing director of retail consultancy Go Fish Retail Solutions. “I think they would use this opportunity to come up with a brand name. I think they will come up with something that's more customer-centric.”
Indiabulls Retail aims to be among the top modern retailers in India and is up against competition from established firms such as Pantaloon Retail (India) Ltd and other deep-pocketed business groups that have entered the business including Reliance Industries Ltd, Aditya Birla Group, and Bharti Enterprises Ltd. The companies are competing for the modern retail business which accounts for only 5% of India’s $300 billion retail business, but is expected to grow rapidly.
Lepps said Indiabulls’ integrated play in retail would include stores, multiplexes, and food courts in malls owned or leased by the company. He added that the first mall housing all these would open for business early next year at Faridabad near the Capital.
According to Lepps, much of Indiabulls’ energy in the past months had gone into fixing “legacy” issues inherited from Piramyd. “We were trying to look backwards and forward at the same time,” he says. “That was a mistake as every time you were looking backwards, you were not looking forward.”