Croma to invest Rs 28 crore in seven new stores

Infiniti Retail, a Tata company announced the launch of its 25th Croma store in India at Phoenix Mills, South Mumbai spread over 15, 000 sq ft area. The total investment on the store is around Rs 4 crore of which 1.9 crore went into fittings and fixture and Rs 2 crore into product inventory, the store is tenth in Mumbai. The total equity investment from Tata Sons towards Infiniti retail stands to Rs 350 crore.

Croma plans to launch additional seven stores in the country by March 31, 2009 of which one store will be launched in Mumbai, three in Hyderabad and three in Delhi and the total approximate cost would be Rs 28 crore. By March 2010, Croma aims of having a total of 50 mega stores across India for which it is currently reviewing cities like Chandigarh, Chennai, Kolkatta, Jalandhar and Bangalore.

“We are not shutting any of the existing stores. When the tough times are over, we will be far ahead of the competition,” Ajit Joshi, CEO and Managing Director, Infiniti Retail said. Joshi even ruled out the option of laying of any employees and said that the stores have witnessed increasing size of cash memos. “November this year was the only tough period for the mall and retail industry where we must have experienced around 11-12 per cent slump in sales but it has returned to normalcy from December 10. We foresee better times ahead by April 2009,” Joshi added.

Besides the Croma Zip store at the Mumbai Airport, the company is also planning to launch a few more in the country that would be not bigger than 2500-6000 sq. ft. and will have limited but variety in product offerings.

The retail giant has arranged special partnership for Samsung’s upcoming laptops in India and also forged partnership with brands like Sony, LG, and HP for their entire range of products. Though he did not disclose the name of the brand, Joshi informed, “We are soon going to announce for the first time, the availability of an international entertainment brand in India that consumers are absolutely going to love.”

Croma is also expecting it’s newly launched private label to contribute 20 per cent to its total sales revenue that consists of products like- mobile air conditioners, foot massagers, two categories of irons, and three categories of microwaves- which Joshi claims are 10-15 per cent cheaper than existing brands. It is even looking at adding newer products to the range very soon.

“The idea of having a private label was to increase volume at our stores which would further help us to negotiate in the Chinese market. With the commodities price of steel and aluminum going down, production costs of electronics have also decreased,” Joshi informed. The private label products are purchased from the best factories in China and checked for quality, an additional layer of quality check is done at Hong Kong and by a private agency in India. To avoid the risk of any product defects, the store has combined a year’s product replacement warranty with each private label product.

Additionally, Croma has a partnership with Australia based retail major Woolworths that has a $47 billion turnover.