Dabur to spin off retail business

Fast moving consumer goods (FMCG) major Dabur India will look for strategic investors for its retail subsidiary, H&B Stores, which operates New U stores across India.

“We would spin off the retail business eventually. With the government opening foreign investments in retail, we would essentially look for foreign retailers as strategic investors,” said Dabur India Chief Executive Officer Sunil Duggal. However, the company could also ink pacts with domestic established retailers.

There are 50 New U stores across the country, and Dabur plans to double it to 100 over the next three years. About 0.8 per cent of Dabur’s domestic revenue comes from its retail business. Domestic business contributes about 70 per cent of the company’s total business. The business has already reached its break-even point. However, the next step would require further investments and structured retailing, said Duggal. “This would take some time but the idea was to incubate the business under Dabur and then to spin off as a different entity in strategic alliances,” he added.

The company could also explore entering retail services business in the personal care space, but that would be associated with the retail arm, Duggal said, adding, “Nothing has been finalised yet”.

New U is a retail chain that sells cosmetics, skin care, hair care, fragrances, herbal care, beauty implements and accessories, men and children toiletries, health foods and ayurvedic products of Dabur’s own private labels and other domestic and international brands. It also sells products online.

New U stores have presence in Delhi, Gurgaon, Faridabad, Ghaziabad, Noida, Hyderabad, Bangalore, Lucknow, Ludhiana, Chennai, Pune, Mysore, Chandigarh, Indore, Amritsar, among others.