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Mr Sanjiv Goenka

Purvita Chatterjee

Mumbai, Aug. 22 RPG Enterprises-owned Spencer’s Retail is in the process of finalising a partner to bring in an international non-food brand into the country. Considering that FDI is being allowed in single brand retail, the company is expecting to use the norm to include an international brand in its retail portfolio.

Mr Sanjiv Goenka, Vice-Chairman, RPG Enterprises, told Business Line: “We would be using the single brand retail route in FDI to bring in a brand in the non-food space. We are looking at an international liaison and a tie-up is expected to get finalised in a category which would be other than food.”

Expecting to grow its retail business at 12 per cent per month, Spencer’s Retail is not planning to add new formats. “All our formats have been growing but it is our hyper market model which has delivered better growth due to the depth of its merchandise,” said Mr Goenka. Spencer’s Retail already has 11 hypermarkets under the brand Spencer’s Hyper. There are plans to extend its hypermarket brand to new places such as Pune, Aurangabad, Nashik, Ahmedabad and Vadodara in the western region.

The retailer has lined up a massive expansion programme across its various formats. Currently, Spencer’s, part of the Rs 11,500-crore RPG Group, has opened 250 outlets. RPG group’s retail outlets, which include Music World, Books and Beyond and RPG Cellucom, currently stand at 500 and are expected to grow to 2,000 stores by 2009 and 5,000 stores by 2011. “We have lined up 500 new stores in the next 12 months,” said Mr Goenka.

Marking an investment of Rs 1,200 crore for its retail expansion exercise, RPG Enterprises expects to raise the money through a 1:1 debt-equity ratio.

On competition, Mr Goenka said: “Every competitor is a threat and every threat is also competition for us. At the end of the day, if one can live with the kiranawalas then one can survive. In Chennai, we have been co-existin g with the kiranawalas for the past 10 years.”

However, making money on its retail venture is still distant. “We do not expect to make profits in the next 12 months,” said Mr Goenka. Targeting the upper middle class with its retail formats, the Rs 800-crore Spencer’s Retail expects to make all-cash deals without any ‘buy now and pay later schemes’.

More Stories on : Retailing | Foreign Direct Investment | Brands

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