Spencer’s plans standalone apparel stores

Spencer’s Retail, the RPG Group’s retail division is taking cautious approach in the slowdown. It is going for a focused expansion approach and is putting a thrust on high-margin products.

According to sources, the company is mulling plans to set up standalone apparel stores that will house private labels apart from brands of other companies.

Instead of going in for a simultaneous pan-out across the country, sources said, Spencer’s will focus on select geographies such Tamil Nadu, Andhra Pradesh, Bangalore and Kolkata, which it believes are faring better than other regions.

It aims to add 3-4 lakh square feet of retail space to its existing 13 lakh square feet.
The emphasis will also be on high-margin products like apparels and general merchandise. These reap margins of about 30% against around 15%, for say, staples, fruits and vegetables and FMCG products, experts said.

“Retail rentals are down about 25% and retailers will obviously try to cash in on this scenario and reap the benefits during the boom later,” a real estate dealer in Kolkata said.

It is learnt that Spencer’s is still mulling on the target audience, size and store branding aspects where standalone apparel stores are concerned.

“Apparels within Spencer’s retail stores will remain.

This is part of a dual strategy and the plans are still being worked out as to whether these could be 2,000 sq ft stores or larger,” a source said.