Savemax looks to add five new outlets this fiscal
The retailer will invest close to `25 crore per store in about 20 outlets across 7 lakh sq. ft of retail space in smaller cities
New Delhi: Savemax, a modern wholesale retail chain, is looking to add five new outlets within this fiscal year in markets such as Karnal and Kundli in Haryana, Indirapuram in Ghaziabad and parts of Punjab.
Savemax, which offers consumers products at wholesale prices, currently has three stores in Delhi. It sells everything from groceries, FMCG, electronics, fresh vegetables to apparels.
The retailer will invest close to ₹ 25 crore per store in about 20 outlets across 7 lakh sq. ft of retail space in smaller cities in Andhra Pradesh, Punjab, Uttar Pradesh, West Bengal, Chhattisgarh and some parts of North East. It expects to touch a revenue of ₹ 170-190 crore by end of the current fiscal year, up from ₹ 100 crore in the year-ago period.
The company, launched by Vaibhav Singhal in 2011, is part of the ₹ 1,200 crore Golden India Expotrade Pvt. Ltd, which deals in rice exports and domestic trading. “We’re looking to invest about ₹ 300 crore which includes initial marketing expenses, stocks along with capex," said Singhal.
Eventually the company wants its own land and buildings and is willing to put in ₹ 150 crore for the purpose. “We will have 40-50% properties owned by us," said Aman Mittal, chief operating officer, Savemax, adding, “35,000 sq. ft per store is an ideal size in the Indian scenario."
Currently, Savemax’s parent company Golden India Expotrade is investing in the expansion. “We have sufficient investments to build 20-25 stores, beyond that we will have to look at private equity funding or reaching out to public markets," said Singhal.
“The next level of growth will come from focusing on tier 2 and tier 3 markets. Metros are competitive so companies are looking to expand beyond the metros," said Gaurav Gupta, senior director, Deloitte Touche Tohmatsu India Pvt. Ltd. According to Gupta, smaller markets lack good quality products creating a window of opportunity for new retailers to penetrate the market with private labels.
Savemax offers its private labels under two brands “Purani dilli" for processed food, groceries, bakery items and packaged snacks and “K3" for apparels, home decor and kitchen utility items.
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