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| Dabur to rope in strategic investor for retail venture |
| Seema Sindhu / New Delhi Aug 23, 2010, 00:46 IST |
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Dabur India would bring in a strategic investor in its retail venture christened “newu”, once it breaks even in the business. The company has managed to bring down its losses in the venture by half.
In financial year 2008-09, the company reported around Rs 18-crore loss in the business, which has come down to Rs 9 crore in financial year 2009-10. Its revenue rose to Rs 9 crore in financial year 2009-10 from Rs 6 crore in financial year 2008-09. It expects the venture to break even by financial year 2012.
“We are not looking to exit but we might look at a strategic investor. Once the business breaks even, we will require substantial capital infusion to take the business to the next level, which we won’t like to do through Dabur.
Then we will talk to prospective investors” said Sunil Duggal, CEO of Dabur India, during an interaction with Business Standard. Dabur would prefer a foreign partner with apt expertise as its niche portfolio of products is unlikely to attract domestic partner. Moreover, by then, the FDI policy in multi-brand retail will also be in place.
 At present, it has 19 newu stores. Through newu, it sells international and national beauty and health brands, personal care, babycare and fashion accessories. It plans to add 31 more stores, taking the total count to 50 by the current financial year.
In the beginning, the company had opened stores of average 3,000-6,000 sq feet floor area. Last year, it started shrinking the stores size to 800-1,000 sq ft, which it says are performing better. These stores are generating revenues of about Rs 1,000 per sq ft which has helped the company to bring down the loss. In addition, it is now more focused on high-demand categories like high-end personal care and toiletries.
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