 "Reliance Retail shuts down Centro locations to focus on in-house brands")
Reliance Retail is temporarily closing several stores under its department chain, Centro, as part of a strategic repositioning. The aim is to focus more on its own brands and labels, many of which it has launched in India as a licensed partner, according to a report by The Economic Times.
In September 2022, Reliance Retail rebranded Future Group's Central stores as Centro, taking over leases at locations where Future Group had earlier surrendered properties.
Store closures and renovations
Reliance has already shut down three Centro outlets and plans to close another 20 by the end of this month. The report quoted sources as saying that companies with inventory in these stores have been asked to retrieve their goods and fixtures due to the renovations. A letter sent by Reliance Retail to its brand partners confirmed that all Centro locations would pause operations as part of the revamping process.
The letter also instructed brands to remove their merchandise, promotional materials, and other items from the outlets, the report added.
Shift to in-house and partner brands
While it remains unclear if local and international brands will be featured in the redesigned stores, Reliance is reportedly planning to introduce a shop-in-shop model focusing on its own brands, the report mentioned. These include brands like Azorte and Yousta, as well as international labels such as Gap and Superdry, which Reliance Retail has acquired or partnered with in recent years.
Centro’s market position
Centro, which currently carries around 450 local and global brands, competes with other department store chains like Lifestyle International (based in Dubai) and Shoppers Stop, owned by the Raheja Group. Despite a slowdown in retail sales expansion — growing by just 4 per cent last year after the post-Covid-19 surge in consumer spending — Reliance Retail remains a dominant player in the Indian retail market.
Challenges and revenue decline
In its latest earnings report, Reliance Retail reported a 3.5 per cent drop in revenue for the quarter ending in September. Weak demand in the fashion and lifestyle segments, along with a strategic focus on improving margins in its wholesale business, contributed to the decline. This marks the first revenue drop for Reliance Retail, excluding pandemic-related store closures.
Chief financial officer Dinesh Taluja emphasised that despite the macroeconomic challenges and the decline in apparel and footwear sales, the company remains focused on long-term growth through investments in technology and design capabilities.