Pantaloon’s fast pace of growth in retail shelf space will continue over the next few years.The company will add about 1m sq of space in each of the next two years. The company aggregate capex over the next two years is about Rs 1.5bn and its gearing may increase to 1.5-2.0. Management is seized of the fact that delivering on the promised schedule of store openings and management bandwidth to manage this growth are critical challenges ahead. To cope, the company has strengthened the second line of management and is beefing up its systems and processes. Pantaloons brisk growth in the last one year has been in value retailing (Food Bazaar and Big Bazaar).
Pantaloon is the only retailer in the country to have demonstrated success across multiple retail formats viz. Pantaloons-the departmental store, Big Bazaar-the food and grocery store. Post establishment of its business model it is planning rapid scale up. Pantaloon – is the leading retail company in India today. Currently 42 stores located in seventeen cities, more stores are slated to come up in yet other cities across different zones.
Within existing cities, more stores are being launched through the different formats that the company specializes in (Pantaloons, Big Bazaar, Food Bazaar, Central). While the Pantaloon is the original apparel store, the Big Bazaar is the discount hypermarket and Food Bazaar is, of course, for grocery and edibles. Central is India’s first seamless Mall which was opened in Bangalore in May 2004. The company’s growth has been by strategy and design. The format strategy proved to be a huge success. However, the growth was not restricted only to formats and it has added significantly to its existing retail space. In 2002–03 the retail space stood at 0.56 million sq feet, currently it has crossed 1.1 million sq feet.
As per the space sign till date, the company expects to cross a whopping 3 million sq feet in the next two years. The impressive performance of the company is reflected adequately in the financial results of the company. The turnover increased from Rs 444.83 crores in 2002–03 to Rs 658.31 crores in 2003-04, while the net profit increased from Rs 11.41 crores to Rs 19.78 crores. The future plans of the company remains focused on growth. In fact, the frenetic pace with which the company is growing should make it shortly touch its target turnover of Rs 1000 crores. A special strength of the company has been to recognize the changing dynamics of the Indian market in the coming years. It has gone beyond the existing boundaries and implemented a more holistic approach in their strategy. They are now following a multi pronged approach, which comprises geographic strategy, product strategy, customer experience strategy, communication strategy and margin strategy.
Pantaloon has the status of being an anchor tenant in India. As the country witnesses a mall-making frenzy (250 nos. in the building process), the company is able to get bigger and better deals from the property dealers and builders. As a matter of fact, the company aims to improve its margin through various means. With established formats and increasing retail space, it is in position to bargain better and source directly from the manufactures. It has also stepped up momentum on the private label front. In addition, to almost doubling the existing private labels in Pantaloon; it has launched in-house label in both Big Bazaar and Food Bazaar. The total numbers of private label is now almost 50. This has resulted in more variety low price for the customers.
Since Pantaloon has a vertically integrated structure and manufacturing expertise – it is poised to reduce the current time to market and launch cutting edge fashion, which will have a positive impact on the existing margins. In the last decade, Pantaloon came to be known as India’s family store. The latest demographic studies indicate that India’s Population is getting younger. Pantaloon now plans to be more relevant to the younger consumers and will position itself differently in terms of identity, merchandise, and retail concept. According to the principal partner of KSA Technopak, a leading retail consultancy firm, Mr Harminder Sahni, “To continue opening stores at the rate at which he is doing without being exhausted, is something most players in this sector have not been able to manage.” Says the retail market watchers: pantaloons will be the Indian equivalent of Spanish fashion retailer Zara.
Pantaloon Retail (India) Limited was incorporated as Manz Wear Private Limited by Kishore Biyani on 12 October 1987, converted into a public limited company in September 1991, renamed as Pantaloon Fashions (India) Limited a year later and thereafter into Pantaloon Retail (India) Limited in July 1999. The company is headquartered in Mumbai. Mr Kishore Biyani is the Managing Director.