Welspun Retail plans network expansion

MUMBAI: Welspun Group's retail venture Welspun Retail is planning to scale-up its pan-India network over the next three years, besides setting its footprint in the Middle-East.

The company, which hopes to break-even in FY 08, buoyed by the retail boom in the country, is targeting a turnover of Rs 500 crore and a profit after tax (PAT) of around Rs 50 crore by 2010.

Welspun Retail, which runs its business in two formats - Spaces and Welhome - would be expanding both, Welspun Group's Director Dipali Goenka said on Wednesday.

"We plan to have a Welhome network of 300 stores by FY'08 from the present number of 100 and further scale it up to 800 by 2010," she added.

Welhome is targeted at the middle and upper middle-class consumers who harbour strong aspirations but simultaneously look for value. "We will be expanding our network in those towns which have over 1.2-million households," Goenka said, adding "there are nearly 800 such locations in the country."

Each Welhome store would be between 800-2,000 sqft and would stock around 40 per cent of its own products such as terry-towels and bedsheets, while the remaining 60 per cent products would be of other companies.

Presently, 60 per cent of Welhome stores are franchised while the remaining 40 per cent are company-owned.

At the high-end Spaces Home & Beyond brand, Goenka said its network would be expanded to 100 from the present 30 by 2010.

"Our presence is very strong in the west. Now we will expand aggressively in the north and south as well," she said.

Welspun Retail is also mulling taking Spaces Home & Beyond overseas, especially to the Middle-East.

"We are presently strengthening ourselves in India. In a couple of years, we plan to enter the Middle-East," he said.

Spaces would be stocking around 35 per cent of Welspun's own products.

"Welspun makes some world-class products such as organic cotton towels, soyabean bedsheets, etc and these will be retailed through Spaces," Goenka said.

"Spaces may go multi-brand in the time to come. We will decide on this within a year," she said.

Welspun Retail is also bolstering its back-end operations, IT backbone and merchandise outsourcing, and has tied-up with SAP for both its front-and-back-end operations.

The company, which presently supplies products to retail giants such as Shopper's Stop and Landmark, is in talks with a few other mega-retail chains as well, Goenka said, but did not divulge any details.

On whether the company was considering a listing or roping in a strategic partner, Goenka said there were no such plans presently but going forward the company's strategy would be dictated by market dynamics.