Globus launching small stores to build private label biz

28 Aug 2007

Mumbai: The Rajan Raheja-promoted Globus Stores Private Limited is seeking to move away from a multi-branded retail chain format, and instead implement its new strategy of becoming a single store label brand.

In a new strategy, Globus plans to launch smaller stores under its private label.

With 90 per cent of its present merchandise already under the Globus brand, the company now plans to convert the balance into its private label brand as well, with Globus being the mother brand, according to Vinay Nadkarni, CEO, Globus Stores Pvt Ltd.

For its single brand strategy, Globus plans to undertake a brand build exercise by roping in actress Kareena Kapoor as its brand ambassador.

According to Akshay Raheja, vice-chairman,Globus Stores, "There are higher margins in private labels, but at the same time it is a harder model for retailers. It is going to take additional effort to build the private label business, but that is the new business strategy we have decided for our stores."

With designing as its USP, Globus plans to rely on its design studio to create new fashions which target youth between 18 and 30.

Globus has decided to create smaller format stores, especially in the malls which are mushrooming across the country. The company plans to have smaller stores with an average floor space of 10,000 sq ft., and wants to position itself as an ''affordably priced fashion brand''.

Globus plans to invest Rs800 crore in the opening of new stores. It intends raising money for the endeavour via internal accruals, combined with a portion of debt and equity. The company is not looking at a public issue.

The company plans to allocate around 6 per cent of its turnover towards advertising spends, with Kareena Kapoor replacing actress Soha Ali Khan as the face of its brand.