The Hindu Business Line : Life Style plans to add 13 more outlets in 2 years

LIFE STYLE International (P) Ltd is targeting a turnover of Rs 450 crore in the next two years along with an expansion drive which would add 13 more stores to its retail chain, according to its Managing Director, Mr Kumar S. In 2003-04, the company's turnover was Rs 240 crore and the net profit was 5 per cent of the turnover.

As a retail brand, Life Style revolves around five concepts — men, women and teens apparel called Splash; children's wear called Babyshop; footwear; furniture and home accessories; and the health and beauty sections.

Mr Kumar told Business Line that in general, apparels drive the business. When Life Style set up its first store in Chennai, the company was worried as to whether the market was ready for it. But five years down the line, the store has outgrown its 27,000 sq.ft. of space.Since it has been getting ``an above average number of footfalls'', it has decided to move to a mall.

The new store in Chennai in Citi Centre on Radhakrishnan Salai will have a large offering of furniture and home accessories, he said. This store will be the anchor store and will have a lot more space for furnitures, some of which are imported from Denmark, Malaysia and Italy. The new store will be in three levels and will cover 75,000 sq. ft.

At present, besides the Chennai store, the company has seven stores, which occupy an average of 55,000 sq.ft. each. Each store costs about Rs 10 crore to be set up. There are plans to increase the number of stores to 13 in two years, and to 21 in three years. The expansion is funded by internal accruals and bank borrowings. The cost of the first phase of the expansion would be around Rs 140 crore, Mr Kumar said.

The store holds two off-season sales to flush out the old stock. Mr Kumar admitted that margins do get eroded at these sales but the large volume of sales generated by the discounts ensures that there is no loss. Most of the stores break even in the second year.

Organised retailing continues to be just 2.5 per cent of the $200-billion retailing industry in the country, which is largely in the unorganised sector. The industry has been growing at a rate of 30 per cent.

The future of large department stores in India lies in malls where there would be other attractions to drive the traffic, such as books and music stores, food plazas and games. Over 200 malls are likely to come up in India and this infrastructure will define the retailing industry in the country, he said.

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Life Style plans to add 13 more outlets in 2 years