Pantaloon Retail India Limited (PRIL) will hive-off its value segments–Big Bazaar and Food Bazaar–into a separate company called Future Value Retail from January 1, 2010.
The BSE-listed company has completed all formalities and gained shareholders approval through a postal ballot to hive-off this segment, PRIL’s Managing Director, Kishore Biyani, said here on Wednesday.
The value retailing segment of the company consists of supermarket Food Bazaar and hypermarket Big Bazaar, which constitutes up to 55 per cent of PRIL’s total revenues.
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“At the company level (PRIL), we are expecting growth to jump by 30-40 per cent,” Mr. Biyani said, indicating that the Indian retail industry has finally crawled out of the woods.
PRIL plans to open 140 Big Bazaars and Food Bazaars over the next four to five years, in addition to the current 120 stores.
Mr. Biyani said that Pantaloon Retail will spend close to Rs. 400 crore in the remainder of this fiscal (till June 2010) for expansion. The company plans to open 10-12 stores of its lifestyle format ‘Pantaloon’ in various parts of the country as a part of its capital expenditure.
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PRIL has also decided to concentrate on its neighbourhood store format KB’s Fair Price Shop, though no time-frame has been specified for the same. “With respect to KB Fair Price Shop, we have moved out of all other cities and are concentrating only on the three cities of Mumbai, Delhi and Bangalore. The idea is to open around 1,200 stores in this format,” said Mr. Biyani.
The company is shutting down unviable stores of KB Fair Price Shop in other cities and claims to have made the format profitable through this move.
Private food labels of PRIL may increase in the face of short-term mounting food inflation.
“Inflation has been quite severe and quite high,” said Mr.BiIyani, adding, “I don’t think in the next three months, there will be any increase in prices (of our private labels in food) but if consistently there are pricing pressures on products, there may be a change in pricing.”
The company has registered an average growth of 20 per cent across all its formats since Diwali and expects to see a higher growth of 30-35 per cent in the next two months, he told reporters here.
Mr. Biyani said that his Future Group has already started the process of consolidating its financial services business under one umbrella and expects to execute the whole process within the next four to six months.
“We want to consolidate our financial services business (Future Ventures, Future Money, Future Capital Holdings and Future Generali) in one single place. It depends on a lot of regulations,” he said. “The process has started and we want to complete it in the next four to six,” he added.