The Hindu Business Line : Megamart super store plans to be lifestyle value retailer

Chennai, Nov. 9 Arvind Brands, a division of Arvind Mills Ltd, which runs its discount retail format under the Megamart label, now, true to its name, is on the verge of opening its first mega store of 40,000 sq ft in the city. And, according to Mr K.E. Venkatachalapathy, Business Head, Megamart, the new super store will be a full value retailer selling men’s, women’s and kids apparel and not just retailing surplus or out-of-fashion stock from the Arvind Brands’ stable. It will also stock a clutch of private labels and a whole host of competing brands as well.

To change perception

Arvind Brands, which runs a clutch of 75 Megamart stores across 25 cities with sales of Rs 102 crore, wants to scale up the format and change the perception of the brand from a mere discounter to a retailer, offering a great shopping experience at value prices, says Mr Venkatachalapathy. The mega store coming up in a Chennai suburb in an unused garment factory premises, he says, has been designed by a UK-based design consultancy, JHP. Across three floors, he says, the store will have all the attributes of any lifestyle store and will retail at prices 12-15 per cent less.

The store will also retail luggage, home furnishings, bed, bath and personal accessories, footwear, kitchenware and personal electronics. “We are an independent SBU and operate at arm’s length from our parent, Arvind Brands. We are in discussion with several other brands to stock them in our store,” explains Mr Venkatachalapathy. It will also feature a utility counter where customers can pay bills, a food court, kids’ play area, all ingredients to make it a complete shopping mall. There will also be a “marketplace” where unsold discounted goods will be sold at even deeper discounts.

Megamart, he says, will look at setting up three large-format value stores this financial year with stores in Pune and Hyderabad also coming up. The company plans to invest Rs 400 crore to set up at least 30 such large stores over the next three-four years, says Mr Venkatachalapathy. Simultaneously, the company will continue expanding its existing smaller format stores from 75 to 90 in the next few months and to 200 in the next two years, he adds. The brand expects to spend Rs 15 crore on advertising the new identity.

Asked whether the Megamart format will not cannibalise a brand’s sales from its prime outlets, Mr Venkatachalapathy pointed out that value stores are generally away from the prime areas where top-end customers shop. “It’s part and parcel of running a brand. If you have to be fashion forward you need to have new collections and run the risk of having surplus stocks. But, instead of being stuck with it you have outlets such as Megamart which offers a good channel to dispose of stocks,” he points out. For Arvind Brands, 15 per cent of its sales come from Megamart.