When the big retailers go belly up

Hypermarket brand V Mart of grocery retail chain Varkeys has been shut for years. — Photo: H. Vibhu  

Survival of the fittest applies not just to humans but to business as well.

Some of the big players in the city’s market space have crumbled in the past. And the trend has not ended yet.

One of the largest textile sales outlets at Edappally, Emmanval, closed shop from first of this month. A spokesman of the management told The Hindu that the showroom, spread over 5 lakh square feet, is under renovation and the space will be converted into a mall, with outlets of jewellery, electronics and other consumables set to step in. It would mean lesser space for the textile business there. The new facility will be opened within three to four months, according to the spokesperson of the group.

Commenting on the development, a prominent player in the textile and jewellery segments in the city, which has outlets in Kerala and outside, said businesses which were not based on firm foundations could collapse. “It has nothing to do with market conditions,” he said. His group is doing well at all places, he said.

He said some enter the business field with a bang but peter out too soon. They want to achieve a spectacular jump in the sales and go all out to woo the masses. But such gimmicks fail to click in the long run, he said.

The Edappally-based textile group is understood to have been functioning on rented premises. The overhead costs exceeded Rs.1 crore per month and no ordinary sales could make up for such spending spree, market sources said. The sales structure begins to erode when the group fails to honour the monetary commitments to the supplier. The failure of the much hyped business model is attributed to the lack of proper planning and over ambition to defeat established players.

Ernakulam has witnessed fall of business giants in the past. Remanika, a former high-profile player in the textile segment, had faced an unceremonious exit earlier in a similar fashion. Kerala-based supermarket grocery chain too had crumbled a couple of years ago.

Evaluating the market scenario, Benny Immaty, president of Kerala Samsthana Vyapari Vyavasayi Samithi, said extravagance beyond one’s capacity could shake the very foundations of business empires.

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Printable version | Oct 21, 2021 6:41:19 PM | https://www.thehindu.com/news/cities/Kochi/when-the-big-retailers-go-belly-up/article4881823.ece

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