Ebony To Take Up Space In Malls, Develop Clusters  ( June '7,2004, FE)

Ebony Retail Holdings Ltd is reviewing its Rs 150-crore expansion plan which was mooted three years ago. Under the new thrust, Ebony’s regional expansion will involve taking position in malls and developing clusters of ‘B’ class cities and metros. Ebony—which has so far undertaken expansion in north with eight stores (combined retail space 1.4 lakh sqft)—has identified new clusters in south, central and western India and plans to set up over a dozen large-format stores by fiscal 2007-08.

Ebony is opening its ninth store in September 2004 in Lucknow (16,000 sqft) at Wave Mall. Also building on its northern cluster base of four stores in the National Capital Region (NCR) besides one each in Amritsar, Jalandhar, Chandigarh and Ludhiana, Ebony will expand into west Delhi, Gurgaon, Jaipur, Kanpur, Allahabad, Dehradun and Varanasi.

Says Ebony director HS Kohli: ‘‘Retailing is seeing a transition from high street expansion to mall development. This is an encouraging trend as taking space in malls on lease would cost around one-third of what we would pay in locations like Linking Road in Mumbai.’’

Mr Kohli added, ‘‘Three years ago when we mooted our national expansion plan of Rs 150 crore and turnover projection of Rs 500 crore by fiscal 2007-08, this level of mall development was not anticipated. Now we’re looking at opening 12-15 stores by 2007-08—all these will be located in malls.’’

Ebony’s probable locations: Mumbai, Pune, Nagpur, Surat, Vadodara, Bhopal and Indore in the west; and Chennai, Bangalore, Hyderabad, Kochi, Vizag, Coimbatore, Madurai and Thiruvanathapuram in the south. Ebony is also evaluating new business models ‘‘like joint ventures and franchisees and mergers & acquisitions for a comprehensive regional presence.’’

According to the company, ‘‘A major portion of Rs 150-crore expansion project will go towards the upgradation of skills, infrastructure and standarisation of processes. The source of the fund will be the group’s internal accruals and short-term borrowings.’’

Ebony is part of the $450-million DS Group, which has business interests in infrastructure and real estate. Ebony is said to be making profits for the past three years. Its gross revenues grew 16 per cent to Rs 81.16 crore in 2003-04. Earlier, Ebony’s revenues grew 7 per cent from Rs 65.44 crore in 2001-02 to Rs 69.77 crore in 2002-03.

Ebony has set a 17 per cent growth target to touch a turnover of Rs 95 crore in fiscal 2004-05.

Ebony chief operating officer Rakesh Malhotra said, Ebony’s current strategy is to remain focused on socio-classification segments A and B (monthly income of above Rs 15,000-Rs 25,000).