Business Daily from THE HINDU group of publications
Wednesday, Oct 04, 2006
Marketing - Strategy
Corporate - Alliances & Joint Ventures
Tata retail arm ties up with Woolworths
First store to be launched in Mumbai on Oct 9
The stores will offer 6,000 products across eight categories
Going multi-brand: MR R.K. KRISHNA KUMAR (right), Director, Tata Sons, and Mr Ajit Joshi, Chief Executive Officer, Infiniti Retail Ltd, at a press conference in Mumbai on Tuesday to announce its plans to operate a national chain of multi-brand outlets of consumer electronics and durables. -- Picture by Paul Noronha
Mumbai , Oct. 3
The Tata Group, through its retail brand Croma, is set to enter the electronics and consumer durables market.
Tata Sons has set up a wholly owned subsidiary, Infiniti Retail Ltd, to run Croma its national, multi-brand retail chain. And Infiniti has entered into a sourcing agreement with Australian retail company, Woolworths Ltd.
With a pan-India footprint, the retail chain is touted to be the first of its kind in the country offering "seamless" branding, pricing and after-sales services, said Mr R.K. Krishna Kumar, Tata Sons' Director. Tata Sons will initially invest Rs 400 crore in the venture, he said. Others in the segment are regional players.
The first Croma store will be launched in Juhu, a Mumbai suburb, on October 9.
In the first 18 months, Infiniti plans to launch 30 such stores across the country.
The stores will have 6,000 products across eight categories.
From home-entertainment products and white goods, to computers and peripherals, communication products, music, imaging products and gaming software, there would be everything for the palate of a gadget-freak. Several brands, including Whirlpool, Voltas, EMI, Casio and others, would be available under one roof.
The deal with Woolworths is a technical association with no equity or financial investment, Mr Krishna Kumar said. Woolworths will provide strategic sourcing from its global network, giving Croma the benefit of the economies of scale, he added.
Pointing out that foreign direct investment is currently "forbidden" in multi-brand retail, the new venture will comply with regulatory guidelines, he said. Since the law does not permit sale of equity to a retail partner, Tata Sons will revisit the deal when the law changes, he said, replying to a query.
The company looks to hire about 60-80 people per store, he added.
Mr Ajit Joshi, Chief Executive Officer of Infiniti Retail, said they would set up 60 outlets by 2009, and 100 by 2010. He told Business Line that the new chain would not be run on a franchisee basis and the outlets would be owned by the company.
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