Ratings agency Fitch has forecasted a stable outlook for the retail sector in 2012 as factors such as expected sales growth-driven expansion and efficient working capital management are likely to benefit retail companies. No wonder, a lot of retail companies are focussing on expansion despite experiencing sluggish growth last year. Dubai-based Landmark Group’s, Lifestyle International is one of them. It reported a 56 per cent jump in its revenues at Rs 2,001 crores for the year-ended March 2011 and has even overtaken K Raheja-backed Shoppers Stop. Shoppers Stop the eponymous department chain on the other hand posted a 23 per cent rise in sales at Rs 1, 931 crores.
Analysts have attributed the growth of Lifestyle to its aggressive store expansion that helped ramp up sales. While Shoppers Stop added over 300,000 sq .ft. of retail space by opening six department stores, one Home Stop, seven Clinique stores, five MAC stores and an Estee Lauder outlet. Lifestyle International added nearly thrice as much retail space in 2010-11 with 10 Lifestyle department stores and 19 Max outlets.
Max-which has smaller shops of 12,000-15,000 sq. ft. helped Lifestyle International enter Tier II, III cities. Max competes with Reliance's Trends format, Pantaloons and Westside and has also opened large properties in metros. It plans to add 15-20 Max outlets this fiscal. Landmark Group's food and grocery format Spar Hypermarkets and hospitality arm, Citymax India, are not included in Lifestyle International's results. Kabir Lumba, MD, Lifestyle International feels the chain will grow by 30 per cent this fiscal despite increasing signs of slowing consumer demand after the Diwali festive season.
The company plans to open add 15-20 Max outlets this fiscal. Overall, Lifestyle's private labels-including women's ethnic wear brand Melange, youth brand Ginger and western wear brand Code-accounted for one third of all its merchandise, while Shoppers Stop's private brands' share lowered to 17.5 per cent, keeping with the firm's bridge-to-luxury positioning which necessitated more national and international brands. While Lifestyle posted same-store sales of 19.4 per cent in the period, Shoppers Stop grew 17 per cent.