Wednesday, April 15, 2009

RETAILERS REVAMP BUSINESS MODELS TO CUT COSTS, UP SALES

Supriya Verma Mishra, Mumbai
The Economic Times

The month of March has been very fruitful for the organised retail’s biggest player, Future Group. The company is going in for a complete revamp of its business model. Investors seem to have taken a cue from this, as the company’s stock has zoomed more than 60 percent in the last one month.

Pantaloon Retail’s monthly sales grew 32.4 percent year on year against 31 percent in February. Its value retail format grew 25 percent, while lifestyle retail grew 17 percent. Same store sales growth stayed at the same level as last month with VR growing at 5 percent, LR at 4 percent and Home retail (HR) seeing a 10 percent dip. Other retailers are going in for similar strategies to beat the downturn.

In order to keep costs under control and to derive the most out of their economies of scale, a lot of retailers are revamping their supply chain, closing down unviable stores, concentrating on IT infrastructure and also consolidating stores.

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