News: Tatas still on retail recce, look for foreign brands

(DNA 21/05/2006) New Delhi - The Tata Group appears keen on carving out a niche for itself in the retail space. Which is perhaps why despite having a dedicated retail arm, Trent Ltd, the Group is going ahead with plans to begin a parallel retailing business under a different company. In fact, sources say that Trent - which has Noel Tata at the helm of affairs - will have nothing to do with the Group’s impending retail foray. To begin with, the Tatas are partnering with Australian major Woolworths for starting a consumer durables retail network.

Trent currently operates three retail formats - apparel chain Westside, bookstore chain Landmark and hypermarket Star Indian Bazaar. Sources say that the parallel retail foray of the Tata Group will most likely avoid these existing formats and instead look for foreign brands that want to establish a base in India. In fact, the Tatas are believed to be in dialogue with several other international majors to launch their brands in India besides Woolworths. Industry sources say Home Depot, the US-based do-it-yourself home hardware store and UK-based consumer electronics chain Dixons, are among the foreign retailers in talks with the Tatas for their Indian foray.

When contacted, a Tata Group spokesperson declined to comment on any retail plans. However, in an e-mail response, a Woolworths spokesperson said: “Woolworths is working with Tata to establish Dick Smith Electronic stores in the country. We are in the final stages of planning and intend on opening our first DSE store in India in the near future.”

While Woolworths will provide the backend support such as sourcing consumer electronics items from brands in India, the Tatas will handle the retailing aspect. The first Dick Smith Store, spread over 15,000-20,000 sq ft space in Pune, is expected to open by September, followed by 3-4 stores in other metros.

For now, consumer durable retailing is fragmented with local retailers like Vijay Sales and Viveks in the South. However, the Tatas will have enough competition, since Reliance Industries and Big Bazaar are also set to enter consumer durables retailing. Big Bazaar is believed to be readying stores spread over 20,000 sq ft across 25 locations.