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9, December 2006 Pragati Maidan, New Delhi.
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Mukesh Ambani-led Reliance Retail, which was in a deadlock with India's largest durable companies over margins, has now settled for a 13-14% margin on the maximum retail price as against its demand of 30-40%. Reliance Retail is now set to open its first consumer durables stores in north India by next month. This will be followed by two other stores in south India which could be either in Chennai, Bangalore or Hyderabad. Sources informed that Reliance Retail would open 8-10 speciality stores and numerous hyper markets by the year end. Reliance Retail will be second only to Tata-Woolworths' Croma stores to open a speciality chain for durables in the past six months in lieu of the retail boom in India with big Indian and foreign names like Bharti-Wal-Mart, Aditya Birla group, Godrej and Reliance announcing their foray into retail. The speciality store, which covers 15-40,000 sq feet, will have only high-end consumer electronics and home appliances products across categories whereas the hypermarkets would store only mid- and low-end products. Early last month, Reliance Retail had sought margins in the region of 30-40% from majors like LG, Godrej, Samsung, Whirlpool, Onida and Electrolux who had rejected the demand. They were willing to give only 13-14%--exactly what they give to retail associates currently.
Date: 15-Feb-2007
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