The Rajan Raheja Group promoted Globus Stores plans to launch independent stores under its largest private label brand - F21- a unisex youth oriented apparel brand.
“We could not launch independent stores under the private label last year due to difficult market conditions, but hopefully by next year we should be able to hive off the private label as an independent store with formats between 1,000 and 1,500 sq ft. We expect to have 4-5 stores next year,” said Vinay Nadkarni, CEO, Globus Stores.
After facing a difficult year in retail, the Mumbai-based Globus Stores is staying away from large format stores. “The average size of our stores is 6,500 sq ft and we would launch only smaller format stores. We are looking at opening new stores in places such as Jammu, Bareilly, Bangalore where we do not have presence,” he added.
At present, Globus has 36 stores, of which only two are large format stores measuring 33,000 sq ft. Focusing primarily on youth-oriented apparel and accessories, the 13-year-old chain has been a private label driven brand and opened its first store in Indore in 1999.
Extending the scope of its private labels such as Globus and F21, the retailer is now entering footwear. In fact, due to its private label strategy, Globus does not plan to rope in a partner in spite of FDI being allowed in retail. “A foreign partner would like to bring in their own brands, while we would like to develop our own labels. It would make no sense to have a partner for our retail chain,” said Nadkarni. Today, it has private labels such as Globus, F21, Essentials and Poetry.
Apparel prices have been increasing over the past two years and with weak consumer demand, most apparel retailers have been reeling under the impact of the slowdown. “The first part of the year was not good, but the second half saw demand picking up. As a company, we have managed to cover costs and have achieved break even at a store level and launched our e-commerce operations this year,” he said.
Over the past two years, apparel prices have been increasing by 35 per cent, but it has stabilised and is unlikely to rise any further. Apparel prices have already reached their peak, said Nadkarni, who is optimistic about 2013.