The Hindu Business Line : Nilkamal to scale up retail business with @home chain

Chennai, Sept. 21 Plastic moulded furniture major Nilkamal Ltd, which entered retail with its @home brand of lifestyle stores two years ago, expects a Rs 70-crore turnover from its retail business by March 2008. It expects the business to contribute over Rs 350 crore by 2010. The group turnover is expected to touch Rs 750 crore by the end of the financial year.

Mr Manish V. Parekh, Director, Nilkamal, told Business Line that the company aims to have 38 stores operating by 2010. The Chennai outlet of @home is being opened on Saturday. It is the ninth outlet, the earlier eight spread across Mumbai, Pune, Bangalore, Hyderabad, Nasik and Ahmedabad.

By March next, 16 stores would be open, he said, adding that the company had firmed up launches in Coimbatore, Ghaziabad, Faridabad, Surat, Vadodara, Thane and one more in Pune.

The Chennai outlet is the largest so far, spanning 33,000 sq. ft. Nilkamal has spent Rs 50 crore on the retail business and will invest Rs 75 crore more in the next three years. The funding is a mix of internal accruals and loans, Mr Parekh said. On an average, Rs 2.5-3 crore is being spent on setting up each store, including the deposit, inventory and interiors.

Home accessories

At @home, 25 per cent of the products are home accessories. The rest comprise furniture for various sections of the house. All the products are sourced from other companies, and are mostly imported, Mr Parekh said.

Nilkamal has tied up with Sleek, a Mumbai-based modular kitchens company, whose models are displayed in the stores. @home also offers a computerised service for customers to plan the look of their homes with merchandise bought there. Its after-sales service would distinguish it from the rest of the lifestyle stores in the country, Mr Parekh said.

High-end display

Nilkamal will also create Nilkamal corners in these stores to display its own moulded plastic furniture. However, only the premium products such as the cabinets, wrought iron-style chairs and high-end dining tables will be on display. Nilkamal, with 33 per cent market share, is the top manufacturer of moulded plastic furniture in the country, Mr Parekh said.

About five years ago, Nilkamal had tied up with its distributors to set up 300-400 sq. ft. exclusive outlets called Home Ideas to showcase its range of plastic furniture. There are 24 such outlets but the company plans to expand. There are 800 main distributors for its furniture which is in turn distributed to more than 15,000 outlets, Mr Parekh said.

Nilkamal also makes crates that are used to transport products. This, coupled with its furniture, accounts for the bulk of the turnover. The company has made a foray into the real estate business but its main focus is its core business of plastics and now, retail, Mr Parekh said.

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