Hit by the downturn, retailers are moving away from standalones to shop-in-shop formats to give their sagging sales a prop.
BANGALORE: Hit by the downturn, retailers are moving away from standalones to shop-in-shop formats to give their sagging sales a prop.
Thus, breaking way from the single-brand silo are some prominent players like Reliance Retail and Future group’s Indus Clothing.
Reliance Retail, which earlier this month entered into a 50:50 JV with Pearle Europe to launch an eyewear brand Vision Express, plans to make room for the label within its existing formats such as Reliance Mart, Wellness, Hypermarket and Time Out. The company plans to set up 150 shop-in-shops within its existing stores.
Reliance Retail is also planning to set up by the year end 60 standalone stores, measuring 1,000 sq ft each, across Karnataka, Andhra Pradesh, Tamil Nadu, Kerala, Delhi, Rajasthan, Punjab and Gujarat. The company is planning to rollout 15 stores in Karnataka alone.
Jarek Widomski, chief executive officer, Vision Express, said the company was making room for the brand in its existing formats. “This will help us expand faster,” he added.
Vision Express plans to expand its footprint in the $900-million organised optical wear market, which is growing at 15-20% year on year.
Future Group-promoted Indus League Clothing Ltd (ILCL), which owns brands like Sculler, Jealous, Indigo Nation, Urban Yoga and Urbana, is also looking at shop-in-shop formats to boost sales. Rachna Aggarwal, chief executive officer, ILCL, said the company’s aim is to utilise the existing space by bringing together two brands under one roof.
The firm, which has already started putting twin brands in its existing stores, is re-negotiating rentals in the wake of slender sales.
“We have slowed down on our store rollouts to keep a tab on our finances,” Aggarwal said.
Indus League Clothing plans to add 20 exclusive outlets by 2009-2010 in North India. It currently has 100 standalone formats for all the six brands. Since the past year, Aggarwal said, mall owners have been charging double of what they would deliver. “It is not viable for a single brand to pay 50% more than floor occupancy. For instance, if I have taken 1,000 sq ft, I get only 50% of the built-up area, but pay for 1,000 sq ft,” she explained.
Analysts, however, warn the current trend of retailers experimenting with their formats could mean more trouble for mall owners, who are already offering discounts to prospective tenants. The practice could lead to lower demand for mall space and rentals could plummet further, an analyst said.
k_sobia@dnaindia.net 
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