Reliance Retail registers 25% growth in FY12

Monday, 14 May 2012

Reliance Retail, a part of the Mukesh Ambani-controlled Reliance Industries posted a 25 per cent revenue growth in 2011-12 as demand at existing stores remained robust, Reliance Industries said in its annual report. Reliance, which disclosed its retail unit’s performance for the first time, reported revenues of Rs 75.99 billion in 2011-12.

Its same-store sales growth jumped 20 per cent in most of its retail formats. Same-store-sales growth records the performance of stores that are at least a year old and is a key to gauge profitability for retailers. Reliance, which added 200 stores across various formats in 2011-12, runs 1,300 stores at the end of the fiscal March 31, 2012.

Reliance Brands, which has agreements with global brands such as Diesel, posted a loss of Rs 18.7 crores on a turnover of Rs 30.9 crores. Reliance Trends, which runs fashion stores, incurred a loss of Rs 11.35 crores on a turnover of Rs 489 crores. However, some of RIL’s speciality retail units have reached break-even or are nearing the point. Reliance Gems & Jewels posted a profit after tax of Rs 0.84 crore on a revenue of Rs 475.5 crores. Reliance Footprint made a loss of Rs 0.6 crore on a revenue of Rs 155.4 crores.

According to experts, apart from apparel category where margins are higher, even others, such as Aditya Birla Retail, Spencer’s Retail, are yet to see break-even at the entity level due to the continuous need for capital and long gestation period in the business.

Out of the total store count, it operates 700 hypermarkets — supermarkets under its value format—which is the largest contributor to its revenues. The company operates over 15 distribution centres for fresh food and over 50 facilities comprising collection centres and processing centers.

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