InterGlobe in talks to exit news cafe business at Delhi Metro

InterGlobe Retail has been looking for a buyer for its retail business started in 2011 with travel retailer Hudson through a franchise pact with Swiss firm Dufry

Suneera Tandon, P.R. Sanjai
Updated25 Apr 2014, 12:07 AM IST
Travel retail in India has met with success only at some airports, as people have to check in early and thus have some time in hand. People using the Metro, on the other hand, are in a hurry. Photo: Pradeep Gaur/Mint<br />
Travel retail in India has met with success only at some airports, as people have to check in early and thus have some time in hand. People using the Metro, on the other hand, are in a hurry. Photo: Pradeep Gaur/Mint

New Delhi/Mumbai: InterGlobe Enterprises, which runs IndiGo airlines, is talking to potential buyers for its Hudson News Café convenience stores at Delhi Metro stations, two people familiar with the negotiations said.

“Retail is not its (Interglobe’s) core business,” said one of the two people. “The move is indicative of their exit from retail altogether.” Both the people declined to be named.

InterGlobe Retail has been looking for a buyer for its retail business started in 2011 with travel retailer Hudson in India through a franchise agreement with Swiss company Dufry AG, owner of the Hudson Group.

The company was “evaluating options, including looking at rationalizing the location of a few outlets in consultation with Delhi Metro Rail Corp. Ltd,” an InterGlobe spokesman said by email.

“Travel retail, except for busy airports, is a new concept in India and will evolve over the next few years. We see a potential in this business on a long-term basis.”

A typical Hudson store stocks books, confectionery, accessories, beverages and snacks. There are 37 Hudson News Cafes in Delhi.

The Hudson group operates cafes, bookstores and speciality retail stores at airports and metros stations in 15 countries. At the time of launch, the company had announced it will open 57 stores in Delhi Metro.

“We do not comment on rumours,” the head of group corporate communications at Dufry Management Ltd said in an emailed reply.

“We have been in talks with various chains including Hudson, but no deal has been inked,” said an executive at a Delhi-based retailer, who spoke on condition that neither he nor his firm be named.

“Travel retail is a high-rental and low-margin business, where scale plays a crucial role,” said the retailer said, adding while it has the potential to grow in India, it will still continue to be a niche market.

Travel retail in India has met with success only at some airports, as people have to check-in early and thus have some time in hand. People using the Metro, on the other hand, are typically in a hurry.

“The profile of consumers using the metro in India is not as evolved as it is in its western counterparts,” said Gaurav Marya, chairman at Franchise India Holdings Ltd, a consultancy outfit. Retailers have shown more interest in airport shops, Marya said.

In 2010, British retailer WHSmith partnered with Aventus Retail and Travel News Service to open 20 stores in India at metro stations and airports.

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First Published:25 Apr 2014, 12:07 AM IST
HomeCompaniesInterGlobe in talks to exit news cafe business at Delhi Metro

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