Arvind Mills to invest Rs400 crore in retail

23 January 2008

New Delhi: Textile giant Arvind Mills is planning to invest Rs400 crore to expand its retail business in the next four years.

To begin with, the company will invest Rs300 crore in setting up 30 large-format retail stores (Megamart stores), and Rs100 crore in 20 smaller stores. The stores would open across 100 cities in the country by 2012. The company, at present, has 75 stores across the country.

The company will fund the retail business through internal accruals.
During the quarter ended March 2007, Arvind Mills reported a net profit of Rs5.4 crore, a fall of 75 per cent from the year before.

The company is shifting focus to branded retail hoping that its 14 Arvind brands will account for half of the company's business by 2010.

The company's biggest brands are Excalibur, Arrow and Flying Machine. The company is planning to increase the number of Excalibur stores to 200 by the end of this financial year while that of Arrow and Flying Machine will increase to 75 and 50, respectively. Total investment for these brands should be around Rs125 crore in next three years.

Sanjay Lalbhai managing director, Arvind Mills said that the retail division's contribution to the company's turnover would rise from 8 per cent at present to 50 per cent by 2012.
Arvind Mills plans to invest Rs8-10 crore in each outlet. The company's first Megamart outlet has opened in Chennai while the second one would open in May in Pune, followed by outlets in Hyderabad and Bangalore.
The Indian retail market is worth about Rs11,000 crore and is estimated to grow by 30-40 per cent over the next decade. The company is targeting a turnover of Rs2,000 crore by 2012 in this sector.