US furniture chain in SEZs as part of India retail plan (Lead)

July 14th, 2008 - 8:10 pm ICT by IANS  

Chennai, July 14 (IANS) Indo Rama Retail Holdings Pvt Ltd, the Indian franchisee of the US-based Office1Superstores, is planning to set up stores inside special economic zones (SEZ) as part of its ambitous plans to set up a chain of stores across the country to cater to the growing demand for quality office stationery. Indo Rama is the retail venture of the promoters of Indo Rama Synthetics (India) Ltd and is the country franchisee for Office1Superstores, a stationery and furniture retail chain in the US.

“We are talking with the developers of SEZs and also participate in real estate exhibitions. As of now we have an outlet in Noida SEZ,” A.K. Srivastava, chief operating officer of Indo Rama, told IANS on the sidelines of a media meet here Monday.

According to Srivastava, only those having a unit inside the SEZ can own the retail outlet.

“Though sales will be restricted to other units inside the SEZ there are several tax benefits available,” he added.

Srivastava said the SEZ store plan is part of the company’s second phase of expansion.

“Our idea is to have at least 50 major outlets and 100 sub dealers in tier 3 and 4 cities by the end of this fiscal,” he remarked.

With other foreign retail chains in this segment - Office Depot and Staples - setting up shop in India, Srivastava said: “It is only we who follow the franchisee route. Others follow the company owned showroom concept.”

Apart from opening its own stores, Indo Rama Retail also appoints regional franchisees. The regional franchisee in turn appoints sub-franchisees including dealers who sell just the private label Office1Superstores products.

The company has three retail store formats viz., company owned and company operated, franchisee owned and sub dealers. Indo Rama Retail plans to open 25 stores in major cities within the overall target of 200 stores over the next three years’ time.

According to Srivastava, the outlets would stock branded as well as private label products in the ratio of 70:30. “Going forward and to earn higher income, the private label stock will be increased to 40 percent.”

He said stores located in major cities could do a turnover of Rs.10 million (nearly $250,000) a year.

“The information technology sector is growing and so are the other industries. Further every home is now becoming a home cum office needing office stationery,” he remarked.

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