The Hindu Business Line : Globus proposes 100 stores by 2008

GLOBUS Stores Pvt Ltd, the retail chain promoted by the Rajan Raheja group, is planning to scale up the chain to 80-100 stores by 2008. The chain, which at present has 12 outlets across the country, intends to set up at least 12 or 13 more by the next festive season to take its tally up to 25 stores.

The chain, according to Mr Vinay Nadkarni, CEO, Globus Stores Pvt Ltd, plans three more in Mumbai, three in the NCR region, two in Bangalore, two in Chennai, one more in Indore and one in Kanpur. Each store would have a carpet area of about 10,000 sq ft and the chain will look at setting up shop mostly in malls.

Mr Nadkarni said all the stores will be financed through promoters' funding and the chain would not approach the capital market despite retail being regarded as a `hot' sector. "We are in the process of building value and only then will we get a better valuation. We are looking at a three-year time frame," said Mr Nadkarni.

He said the chain's foray first into a tier-2 town, Indore, in 1999, had paid off, as it is richer for the experience. It will also look at setting up stores in smaller cities such as Lucknow, Ludhiana, Rajkot and Coimbatore. Each store would entail an investment of Rs 2.5 crore to Rs 3 crore.

Mr Nadkarni said the Globus chain earlier experimented with a parallel, value format store, Pavilion, in Chennai where the store hawked its own brands. He said the learnings from that single store in Chennai, which has since been rechristened Globus, were useful.

Selling other brands did not really create value for the Globus brand. In its expansion, the Rs 100-crore Globus chain will now look at selling at least 80 per cent of merchandise under its own labels - Globus and F-21 — and the rest will be reputed brands. "While it does build customer loyalty and helps get better margins, we do take a risk as we need to be consistent with fashion trends," he explained.

The chain will only sell apparel and accessories and the core target group will be in the age group 18-35, said Mr Nadkarni. The chain has broken even at the store level, he added.

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