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Amit Rai
Ankit Surana
Anish Pandey
Abhishek Tiwari
Anubhav Srivastava
Retail Industry
2
Evolution of Indian Retail Industry
4
Industry Description
Indian retail Industry is Fifth
largest in the world.
5
Tax Impacts and Regulatory Environment
The retail sector has not been conferred an industry status till now. Hence,
there are no specific rules and regulations governing the sector. However,
there are certain laws pertaining to the establishment of stores and conduct
of activities, which retailers need to follow:
The Shop and Establishments Act
In addition to the above law: Retail companies have to follow certain regional
rules and regulations on the basis of their stores location; different states
have different laws to regulate the retail trade.
6
Tax Impacts
Customs duty
Central Value Added Tax (CENVAT)
Service tax
Central Sales Tax (CST)
State value added tax
Central value added tax
Entry tax
GST implementation :-In order to integrate all of these taxes into a single
unified tax system and bring about broad-based reforms in the indirect
tax regime, the government of India has envisaged The introduction of
a uniform Goods and Services Tax (GST) across the country.
7
Regulatory Environment
Effective forecasting
Strong balance sheet
Stock control
Market position
Proximity to market
Creating Systems In Retail
Hiring the Right Employees
Marketing
Buying The Right Merchandise
Customer Service
Risks for Retail Sector
Low-growth consumer markets
Regulation and compliance
Inability to control costs/rising input prices
Inability to benefit from e-commerce
Wrong price image
Supply chain disruptions
Inability to penetrate emerging markets
Failure to respond to shifting consumer behavior
Sourcing
Volatility in commercial real estate markets
Opportunities for Retail Sector
Retailers always face stiff competition and must fight with each
other for market share and also with unorganized sector.
Thus retailers give each other stiff but healthy competition which is
evident from their aggressive marketing strategies and segment
policies.
SWOT Analysis
Strengths
Major contribution to GDP: the retail sector in India is hovering
around 33-35% of GDP as compared to around 20% in USA.
High Growth Rate: High Potential: since the organized portion of retail
sector is only 2-3%, thereby creating lot of potential for future players.
On the supply side, retailers are slowing down their expansion plans
and many real estate developers are falling behind schedules in their
shopping mall projects, considering the credit crunch.
The Retail sector in the small towns and cities will increase by 50%
to 60% pertaining to easy and inexpensive availability of land and
demand among consumers.
Markets for the Products
India has emerged as the fifth most favourable destination for
international retailers.
Schwarz Unternehmens
Treuhand KG $77,220.00 German
Costco Wholesale $77,946 USA
Home Depot $67,997 USA
Target $67,390 USA
Aldi GmbH & Company
oHG $58,000 German
Company Name Net Sales(Billion $)
Pantaloon Ret 0.79
Shoppers Stop 0.37
Trent 0.16
Brandhouse 0.14
REI Six Ten 0.11
Provogue 0.11
Koutons Retail 0.10
Kewal Kiran 0.05
Cantabil Retail 0.03
Arunjyoti Enter 0.01
Prozone Capital 0.00
Major Players
Provogue Koutons Retail
Others 6% 6%
12%
Pantaloon Ret
Trent 43%
7%
Pantaloons Retail India Ltd. is market leader with 43% of the market
share in terms of turnover
Followed by Shoppers stop, Brandhouse, Trent, Provogue
Source Moneycontrol.com
Cost Structure
Profit Trend
ROCE
Trent
The Company’s operations consist of Westside stores, Star Bazaar and Landmark
stores.
The Westside stores include a private label fashion apparel format. During fiscal
year ended March 31, 2012 (fiscal 2012), 13 stores were opened, including the
Bhopal (DB City Mall), Pune (Phoenix Market City), Mumbai (Infinity Mall), Varanasi
(Dhanushree Complex ), New Delhi (Moments Mall), Mumbai (R-City Mall), Bilaspur
(City Mall), Udaipur (Rkay Mall) and Bangalore (Orion Mall).
The Star Bazaar is the discount hypermarket format. As of March 31, 2012, there
were 15 operational stores (three in Mumbai (Andheri, Dahisar and Thane), four in
Bangalore, two in Ahmedabad and Pune, one each in Aurangabad, Surat, Chennai
and Kolhapur).
The Landmark stores include the format retailing inter-alia books, music, toys and
gaming, which are managed by a subsidiary of the Company, Landmark Limited.
The company disclosed rise of 24.70% in standalone net profit on y-o-y basis to Rs
127.64 million, while total income rose 12.65% y-o-y basis to Rs 2.20 billion for the
quarter ended June 2012.
Key Financials (Trent)
Period & months 2012/03 2011/03 2010/03 2009/03 2008/03
Net Operating Income 8698.8 6861.5 5633.3 5117.3 5141.6
Cost of Sales 8827.3 6789.3 5479.1 5029.7 4958.6
Reported PBDIT -128.5 72.2 154.2 87.6 183
Other Recuring Income 902.5 695.8 430.7 259.7 42.9
Adjusted PBDIT 774 768 584.9 347.3 419
Depreciation 159.5 136.3 118.5 92.3 88.5
Other Write-offs 0 0 0 0 0
Adjusted PBIT 614.5 631.7 466.4 255 330.5
Finanical Expenses 77.1 123 95.1 43.3 42.9
Adjusted PBT 537.4 508.7 371.4 211.7 287.6
Tax Charges 100.7 172.3 105.7 30.7 47.4
Adjusted PAT 436.7 336.5 265.7 181 240.2
Non-recurring Items -91.6 94.7 122 66.1 85.6
Other Non-cash Adjustments 127.6 -0.8 14.5 20.5 2.9
REPORTED PAT 472.7 430.4 402.2 252.1 325.8
Shoppers Stop
Incorporated as a private limited company on June 16, 1997
The foundation was made by K Raheja Corp
Shopper's Stop Limited (SSL) is engaged in the business of retailing
variety of household and consumer products and books through
departmental stores.
As of March 31, 2012, SSL operated through 51 departmental
stores.
As of March 31, 2012, it opened 13 departmental stores, which
includes two stores in Chennai and Pune and one each at Indore,
Vijayawada, New Delhi, Mysore, Latur, Ahmedabad, Mumbai,
Bengaluru and Gurgaon.
During the fiscal year ended March 31, 2012, the Company also
opened seven HomeStop one each at Lucknow, Vijayawada, Pune,
Bengaluru, Ahmedabad, Mumbai, hydrebad taking its tally to 11
stores.
In May 2012, it opened Shoppers Stop store at Jalandhar.
Key Financials (Shoppers Stop)
Period & months 2012/03 2011/03 2010/03 2009/03 2008/03
Net Operating Income 20,347.60 19,290.00 15,683.70 13,275.10 11,460.10
Cost of Sales 17,134.20 16,264.90 13,122.20 11,478.70 9874.2
Reported PBDIT 3213.3 3025.2 2561.5 1796.4 1585.9
Other Recuring Income 186.9 90.8 43.2 79.5 1131.1
Adjusted PBDIT 3400.2 3116 2604.7 1875.9 1669.4
Depreciation 377.2 310 310.3 631.3 392.7
Other Write-offs 0 0 0 0 0
Adjusted PBIT 3023 2806 2294.4 1244.6 1276.7
Finanical Expenses 2039.1 1668.3 1601.1 1556.4 1131.1
Adjusted PBT 983.9 1137.7 693.4 -311.8 145.6
Tax Charges 335.5 386.5 211.3 58.9 62.8
Adjusted PAT 648.4 751.2 482.1 -370.7 82.8
Non-recurring Items -5.8 0.5 38.6 -266.5 -0.5
Other Non-cash Adjustments 0 0 -18.4 0 -12.7
REPORTED PAT 642.6 751.8 502.3 -637.2 69.7
Provogue
Provogue (India) Limited (PIL) was incorporated on 17th November
1997 as Acme Clothing Private Limited.
Divisions of the company include accessories, women's wear and
men's wear.
The EPS of company has dropped from 12.56 in 2012 to 2.17
currently.
The sales and Net worth have also dropped significantly.
PAT has come down to -25.08 crores from 17.85 crores from last year.
The tactical marketing policies, aggressive promotional campaigns,
and unique distribution techniques through malls, stores have helped
Provogue grow to become a leader in the garments segment in India.
This concept of being different has carved out a definite niche in the
hearts of the buyers.
Overall the outlook looks very strong and positive and is the best bet in
the companies among retail.
Key Financials (Provogue)
Period & months 2012/03 2011/03 2010/03 2009/03 2008/03
Net Operating Income 6095.9 5622.6 4806.7 3567.6 3361.4
Cost of Sales 5499 4921.6 4287.1 3211.6 2885.4
Reported PBDIT 596.9 701 519.6 356 476
Other Recuring Income 152.7 151 187.4 231.7 164.2
Adjusted PBDIT 749.6 852 707 587.8 565.5
Depreciation 118.1 119.3 122.8 95.1 81.1
Other Write-offs 0 0 0 0 0
Adjusted PBIT 631.5 732.7 584.2 492.7 484.4
Finanical Expenses 322.1 260.4 199.5 149.7 164.2
Adjusted PBT 309.4 472.3 384.7 343 320.2
Tax Charges 45.8 85.6 119.4 109.5 63.5
Adjusted PAT 263.6 386.8 265.3 233.5 256.7
Non-recurring Items -13.3 -48.3 13 60.1 7.5
Other Non-cash Adjustments 0 -4.4 5.3 1 -6.1
REPORTED PAT 250.3 334.1 283.5 294.6 259.7
Brand House Retail
Brandhouse Retails was established as a pure play retail
organization. As a company that caters to the entire spectrum of the
socio-economic stratum in the Indian market
BHRL’s retail expertise extends from mid-price to the lifestyle and
luxury segment.
HRL is amongst the leading fashion retailers in India. It currently
manages the retailing of the following brands through exclusive
brand outlets across India Reid & Taylor, Belmonte, Carmichael
House and dunhill.
A network of 784 company-operated and franchise stores across the
country of approximately 8.93 lac sq ft. each one focus on garments,
fashion accessories and home furnishings offering international &
domestic brands.
91 Cities, 784 Stores and 6.6 Sq. Ft of retail area covered.
Key Financials (Brand House Retail)
Period & months 2012/03 2011/03 2010/03 2009/03 2008/03
Net Operating Income 7834.8 7374.5 6574.6 5523.5 3137.9
Cost of Sales 7286.5 6777.8 6010.2 5108.2 2833.8
Reported PBDIT 548.3 596.6 564.4 415.3 304.1
Other Recurring Income 0.9 2.7 22.9 0.6 38.8
Adjusted PBDIT 549.2 599.4 587.3 415.9 311.6
Depreciation 97.4 98.8 85.6 82.8 47.1
Other Write-offs 0 0 0 0 0
Adjusted PBIT 451.8 500.6 501.7 333.1 264.5
Finanical Expenses 297.7 283.1 191.6 87.8 38.8
Adjusted PBT 154.1 217.5 310.1 245.3 225.8
Tax Charges 54.3 60.5 113.8 104 95.1
Adjusted PAT 99.7 157 196.4 141.3 130.7
Non-recurring Items 0 -0.2 0.1 -4.1 0.5
Other Non-cash Adjustments -14.7 44.4 -34.4 -3.4 -0.1
REPORTED PAT 85 201.2 162.1 133.9 131.1
Pantaloon Retail (India) Ltd
Pantaloon Retail India Limited (PRIL), a retailer was incorporated in 12th
October of the year 1987, headquartered in Mumbai
Company operates through primarily the Lifestyle' and Value' formats
through multiple delivery mechanisms and lines of business, some of them
being, fashion, food, general merchandise, home, leisure and entertainment,
financial services, communications and wellness.
The Company has stores in 51 cities across the country, constituting over 6
million square feet of retail space.
Caters to the Lifestyle' segment through its 35 Pantaloons Stores and 5
Central Malls, as well as through 78 Big Bazaar hypermarkets, 113 Food
Bazaars.
In the year 1991, the company had launched BARE, the Indian jeans brand.
Initial public offer (IPO) was made in May of the year 1992
Multiple retail formats including Collection i, Furniture Bazaar, Shoe Factory,
EZone, Depot and futurebazaar.com are launched across the nation in the
year 2006
Key Financials (Pantaloon Retail (India) Ltd)