The debt-ridden Future Group is looking at scaling up its flagship Big Bazaar's high-margin apparel business for a better future.
The Future Value Retail (FVR) that operates the 165 hypermarkets will follow a dual strategy to grow its apparel business known as Fashion Big Bazaar (FBB). It will grow as FVR opens more Big Bazaar stores besides adding standalone FBB stores.
"Apparel has always been an important part of Big Bazaar. We have recently started playing up the fashion business as it promises better margins," said Pawan Sardah, chief marketing officer, Future Group.
FVR is a wholly-owned subsidiary of Pantaloon Retail (India) Ltd under which its retail business, led by its format divisions, Big Bazaar and Food Bazaar operate. Besides having a presence in the 165 Big Bazaar hypermarkets there are 25 standalone FBB stores.
At present FBB contributes 30% to Big Bazaar's topline, which is about Rs. 7,350 crore for the period 2010-11 (ending June 2011). For the same period the company's borrowing stands at Rs. 2,702 crore. "We are looking at doubling the FBB stores and revenues over the next twelve months," said Sardah.
The standalone FBB stores will be smaller with average space of 15,000-25,000 sq ft.
FBB targets the similar consumer group that visits the Big Bazaar stores looking for value-for-money deals. "FBB is an offshoot of the Big Bazaar and has its DNA. There is no question of cannibalisation between Pantaloon's apparel business and FBB," said Sardah.
In the last one year Big Bazaar has added about 20 stores and is looking a similar number this year.