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| Tata's Croma to break even by 2011, see higher revenue |
| BS Reporter / Mumbai Sep 03, 2009, 01:23 IST |
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Croma, the electronics retail chain of the Tatas, is expected to break even by the next financial year, a top company executive said today.
The chain plans to add more stores, launch new private labels and boost margins to achieve this. The chain runs 34 stores and is expecting upwards of Rs 1,000 crore in revenues in the current financial year, a big jump from the Rs 657 crore of 2008-09.
“Out of our total stores, 17 to 18 are already profit-neutral and we are seeing ascending intensity among others. We are close to break-even by next fiscal,’’ said R K Krishna Kumar, chairman of Infiniti Retail and director of Tata Sons. Infiniti Retail, a unit of Tata Sons, runs Croma stores.
There were media reports that the Tatas have made significant investments in Infiniti Retail, of Rs 220 crore, despite losses incurred by the chain in the past two years.
“Profit margins have improved in the last year or so, because of our negotiating powers with vendors and economic growth in the country. A spurt in the number of townships and apartment clusters is driving the sales of consumer durables,’’ Kumar said.
Each store is recording a topline of Rs 30-35 crore and the chain is seeing a same-store growth of 14 per cent, he said. “Barring one or two, every store is seeing steady growth. I think 15 per cent growth is feasible.’’
The chain is planning to double the number of stores by the end of 2011 and will invest Rs 150 crore to open 18 more stores in the country by the end of this financial year, Kumar said.
“We do not have presence in the east now. By 2011, there will be major national expansion for Croma. Since electronic retailing is consumer-facing, it goes well with the group’s strategy of growing consumer-facing businesses,’’ he said.
Croma is also strengthening its presence in private labels in the current year, with launch of products such as LCD panels, ultra slim TVs, washing machines and so on, said Ajit Joshi, managing director and chief executive of Infiniti Retail.
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