Shrunk expansion plans
Attribute it to slowing down of global economy.March 13, 2012 | comments ( 0 ) |
Retailer of international clothing and accessories brands in India, Planet Retail Pvt Ltd, has squeezed its expansion and investment plans with the slowing down of the global economy and sales. Moreover, the company is also likely to miss its 2015 break-even target.
Planet Retail brands in India include Guess, Body Shop, Accessorize, Next and Nautica.
According to reports, the company now plans to restructure and reduce the pace of expansion across brands and recast investment plans to half. Planet Retail also has a licence to run a chain of Debenhams lifestyle stores in the country.
“Macro-environment issues, such as rupee depreciation, weak retail sales in the last two quarters, which were not at par with expectations for most premium brands, and the entry of FDI (foreign direct investment) in the retail sector not happening anytime soon, are some of the reasons that forced us to restructure business,” said chairman Ramesh Tainwala.
The retailer has shrunk its investment plan of Rs 200 crore by half and is deciding on whether it should focus its capital on the existing brands or on a few strong ones such as Debenhams and Accessorize. “We will consolidate our brand portfolio and exit one-two brands if required. For both Next and Guess, we will do an honest evaluation of their potential over the coming months,” said Tainwala.
Planet Retail had intended to grow aggressively to 300 stores by 2014 from 80 now, but the expansion will be scaled down now.
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