Tie up with Woolworths of Australia for technical support and sourcing
Subsidiary Infiniti Retail formedMega stores branded as `Croma'
MUMBAI: Tata Sons will operate a national chain of multi-brand outlets of consumer electronics and durables through a 100 per cent subsidiary, Infiniti Retail. The mega stores, branded `Croma', will offer a wide range of products across categories and brands.
Infiniti has entered into a technical and sourcing agreement with the Australian retail giant, Woolworths, which operates more than 2,000 stores across Australia in 12 different formats. While Infiniti will own and run the retail operations in India, Woolworths will provide technical support and strategic sourcing facilities from its global network.
Addressing the media here on Tuesday, R. K. Krishna Kumar, Director, Tata Sons, said, "The key challenges are getting real estate and a strategic location in the hinterland and the second is sourcing because much of the success in retail depends on how structured or effective sourcing is to provide a range of products.''
First store in Mumbai
The first Croma store covering 20,000 sq. ft. will be launched in Mumbai's suburb of Juhu on October 9 and in the first 18 months, Infiniti Retail plans to launch 30 such large format stores.
Croma will offer consumers a choice of over 6,000 products spread across eight categories including large appliances, small appliances, computers, communications, entertainment, movies, music and gaming. The Tatas are already present in the retail space through Trent's Westside for apparel and Titan Industries' watches.
Rs. 400 cr. investment
There is no equity or financial investment by Woolworths and the Tatas will be investing around Rs 400 crore initially. According to Mr. Kumar, the aim is to have 30 stores by March 2008, and scale it up to 100 stores by March 2010. The stores will each be located in High street locations or malls and span 15,000-20,000 sq. ft. He said that initially, the profit margins would be 8-10 per cent but this could change later.
The company was looking at a pan-Indian presence in consumer electronics and consumer durables, while others in this segment were all regional players. "This is the first time, there will be a national brand to provide the products in a seamless manner,'' said Mr. Kumar, adding that the Tatas were also looking at a foray in real estate, but in a different manner and that the details would be announced later. He indicated that at some point later, Infiniti would look at introducing private label brands.