Tata Group’s retail company to expand in tier-II, III cities via franchises

The delay in opening of malls, closure of retail complexes and surging property rentals, among others, have prompted Trent, the Tata Group’s retail company, to opt for the franchise route to open its Wesbside chain of department stores in tier II and III cities. Under the franchise deal, Trent will own and provide the stock to the franchises.

Trent has 30 company-owned Wesbside stores in Mumbai, Delhi, Kolkata, Lucknow, Baroda, among other cities. The stores, which sell womenswear, menswear, kidswear and cutlery, range from 15,000 to 30,000 sq ft each in size.

The company plans to open nearly 30 stores under franchisee route in the next couple of years in smaller cities, such as Allahabad, Patna, Guwahati, Madurai, Aligarh and Jammu. The franchise-run stores will be half the size of the company-owned stores at 8,000 to 12,000 sq ft, a Wesbside release said.

Neeti Chopra, head of marketing, Trent, said, “The company will own stores in top 30 cities and open stores under the franchise route in the rest of the cities. The franchise route will help us to overcome the property challenge in these cities and scale up our operations quickly. We will also get the first mover advantage in these cities, which do not have much retail presence”.

Trent and franchise holders will share profits from the stores at an agreed percentage. The company is expecting Rs 6 crore to 10 crore sales per store from the franchise stores.

3 Comments

  1. Pune Builders
    Posted May 23, 2008 at 4:09 am | Permalink

    It’s great that big companies like Tata are entering smaller markets…

  2. Posted May 30, 2008 at 5:26 am | Permalink

    With an upsurge in realty prices in metro and talent crunch, the $11 billion Indian BPO industry is now thinking to move to the Tier II cities in the country. Many feel that movement to lower-cost cities within India is likely to result in additional 15-30% reduction in operating cost despite lower employability and higher management costs.For more view- realtydigest.blogspot.com

  3. Posted June 3, 2008 at 3:06 am | Permalink

    That will be better for all.But if we see the other point of view there are lot of departmental store are already opened in the whole market areas like reliance fresh,subiksha,6 Ten,Big Apple etc.

2 Trackbacks

  1. […] While India, Russia and China remain important destinations, high real estate prices in big cities and growing competition have decreased the attractiveness compared with the last years and forced retailers to look for opportunities in Tier II and III cities. […]

  2. […] dearer, this is still a excellent time to buy property. Property experts even say switching to Tier II and Tier III cities is a good option. With the RBI raising repo rates to 8.5 %, one can expect a decline in […]

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