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Anjali Prayag

Bangalore, Nov. 3 Megamart, the value retail chain of Arvind Brands, will take the franchising route to reach its targeted turnover of Rs 1,000 crore in the next two years.

“We want to increase our focus on the franchising model and concentrate on Tier II and Tier III towns in the next few years,” said Mr K.E. Venkatachalapathy, Chief Operating Officer, Megamart.

The value retailing chain, which currently has 115 stores across the country, plans to increase its footprint State-wise.

“We’ll do this by saturating the Southern states first and then move into other parts of the country,” he said.

The company is expanding its presence through two formats: small stores (2,000-4,000 sq. ft) with an investment of about Rs 50 lakh-Rs 60 lakh per store and large format outlets (40,000-60,000 sq. ft) with an investment of about Rs 2 crore – Rs 3 crore each.

Megamart has three large outlets located at Chennai, Pune and Bangalore.

The plan is to have 25 large stores and 500 small stores in about five years, Mr Venkatachalapathy said.

The discount retailing market in India, valued at about Rs 10,000 crore, is estimated to be growing 25 per cent year-on-year and is expected to be worth about Rs 25,000 crore by 2013.

The country currently has four to five significant players in the segment that offer 25-50 per cent discount on brands throughout the year.

“People have started hunting for value and even during a slowdown like the one now, we are least affected,” Mr Venkatachalapathy said, quoting Megamart’s October sales figures.

The company recorded a turnover of Rs 40 crore during October this year, compared with Rs 16.5 crore during the corresponding period last year, with about Rs 11 crore coming from the three large format stores.

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