Aditya Birla Retail to enter speciality retail segment

Aditya Birla Retail (ABRL), the retail arm of the $29.2 billion diversified Aditya Birla Group, today said it is considering to enter speciality retail segment, even as it plans to add over 160 new stores under its 'more' brand this fiscal at an investment of Rs 300 crore.

The company that currently operates 560 super markets (size ranging from 2,500 sq ft to 4,000 sq ft) and 10 hypermarkets (55,000 to 60,000 sq ft) under the 'more' brand, said it is still at a very early stage on its plans to enter speciality retailing.

"We are currently exploring some other speciality formats, like speciality but the plan is at a preliminary stage," Aditya Birla Retail CEO Thomas Varghese told PTI.

While he did not elaborate what could be the categories that the company may consider, Varghese ruled out the food and grocery, apparel and electronics segments.

"The company already has a lot of exposure to food and grocery format, we won't look at the format. Also, in apparel retailing, there are group companies which are already operating. Even electronics retailing is not lucrative as it offers very thin margins," he said.

Varghese said as and when the company decides to enter speciality retail, it will be under a different brand and not under its existing 'more'.

Commenting on the expansion plan this fiscal, he said: "In the current fiscal, ABRL will expand very aggressively, we have plans to open 150 new supermarkets and 12 new hypermarkets this fiscal with a planned investment of Rs 300 crore." The company today opened a new hypermarket in Delhi.

ABRL currently operates in 12 states across the country at the moment and might enter Orissa with its hypermarket format.

The company closed last fiscal with a turnover of Rs 1,650 crore and expects sales of Rs 2,400 crore by the end of the current fiscal.

"We expect 16% growth to come from same store sales and the rest will come from new store additions," he added.

The company that had acquired South India based retail chain 'Trinethra' in 2007, is focusing on building scale rather than making acquisitions.

"We are not wanting go grow through acquisitions. There is a due diligence going on at the moment for a possible acquisition of an existing retail chain, but I don't think we will do it," Verghese said.

The company expects to break even by 2014, post which it might consider making an initial public offer.

"We expect to be profitable by 2014 and would look at making an IPO only once the company comes close to profitability," he added.