The Hindu Business Line : Call of the mall

Getting to meet Ness Wadia, the Joint Managing Director of Bombay Dyeing, can take a while. The scion of the Wadia Group has his hands full handling the group's real estate, retail and shopping centre business, as the textile major gets ready for a greater presence in the area of retail and real estate.

To this end, it will seek new partners along the way. "Some new businesses would require partners and some won't. In textiles we don't believe we need one but for retail we may seek a partner in terms of manufacturing, where it would make sense from a business perspective," states Wadia. Considering the Wadia group already owns a significant amount of real estate, extending it into mall development and retailing would be natural extension for textile major.

Wadia and his team are busy locating real estate within Mumbai and across the country for mixed-use development. This would include building residential complexes along with shopping centres and malls across the country. However, for this Bombay Dyeing is segregating the clusters into luxury, mid-premium and mass use development.

Explains Wadia, "We are segmenting the business because eventually different expertise is required for the luxury, mid-range, premium and eventually mass communities that we build for. The purpose is to build communities which are destinations to live and enjoy.'' In fact, the company's latest venture, Springs, a town centre project being planned in Dadar, is being targeted at the middle-to-premium segments keeping in mind the mixed-use approach. The Worli property is slated to become a luxury destination.

Similarly, the malls too will be segmented under different brands depending on the location they are in. Beginning with luxury destinations, its next luxury mall is planned at Ballard Estate in Mumbai while other are expected to come up in places such as Bangalore, Delhi, Hyderbad and Kolkata. "Although the potential is not huge, we are planning 8-10 luxury shopping centres over a ten-year period. These would be luxury destinations which would have restaurants, spas, salons and a lot more than what is available in today's mall,'' claims Wadia. Such malls would sport the best of world-class brands from Louis Vuitton to Gucci. Even premium Indian brands would have a chance to find place in these malls. "We are not only getting in the best from the West but also enhancing whatever is available in India today. These could be in the area of services like restaurants or even established Indian designers,'' says Wadia. He estimates the shopping centres/malls will cost nearly Rs 200 crore each.

Bombay Dyeing is also exploring opportunities in a host of retail formats. These would range from building hypermarkets to partnering foreign brands eyeing the country. "The retail business has become a cool thing to be in. It is clear that there is a massive opportunity in organised retail but we have to see which segment of retail we want to be in,'' says Wadia. "We are looking at retail not only from Bombay Dyeing's side but also from the group's perspective. There could be certain businesses within retail which could be synergistic with Bombay Dyeing, but there may be others that we may put into a separate company, which could be privately or publicly held,'' he adds. For instance, joint ventures with apparel or bed linen companies could be with Bombay Dyeing itself while international luxury brands may need a different kind of expertise from the group to enter the Indian market. "Some of the luxury brands that we are looking at might privately come in as the skill is not there within the organisation. It would be suited to the environment of the business and where the skill in the group lies. Retail would be housed in a company where there is skill and we feel we have the best to offer,'' says Wadia, who is still exploring options ranging from a joint venture to a licensee agreement.

Wadia is keeping his plans on retail formats close to his chest. "There has been speculation about us entering the hypermarket business. But tomorrow if we feel the business is not viable we will not get into it. We certainly will not put our money in something that we believe is not going to work for us,'' admits Wadia, alluding to the uncertainties of FDI (foreign direct investment) in retail in the country.

But there is still no ballpark figure of the investment in the new businesses. Wadia is sceptical about reeling out random numbers. "It would be easy for me to say we are investing Rs 10,000 crore in the next three years. I am not saying that we don't have plans but businesses change quickly and what is good to be in now may not be that good next year. There are uncertainties,'' says Wadia.

Bombay Dyeing's existing retail operations are being revamped. With upgraded shops, services and products, the textile brand has been attempting a makeover for a while. Wadia describes it as an `evolution' for the company, having faced bad times in the past. "Yes, we did lose focus on the products and the customer and the Bombay Dyeing outlets were just pathetic. Today, however, we are re-inventing our textile division, the company is making profits and the retail division is growing at 30 per cent year-on-year,'' says Wadia.

Like the joint venture with Proline a couple of years ago, it is also looking for more brands in the ready-to-wear segment. "We are looking at acquiring domestic brands in the ready-to-wear and bed and bath segments,'' states Wadia.

More young blood is being inducted into the company. "My job is to hire people younger and cleverer than myself. Bombay Dyeing has to move from a family professional business to a professional family business and that is going to be the key to whatever we do,'' states the 36-year-old Wadia, before leaving for yet another overseas business trip.

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Call of the mall