The retailer

Optimism in times of adversity

October 2008
2 The retailer
Foreword
The retailer 2
We are pleased to launch the second issue of The retailer. The time could not be more opportune with the
Indian retail industry preparing itself to face a challenging period. The events that have unfolded in the global
lnancial markeLs have impacLed Lhe indusLry in several ways such as poor sales, lack ol sources ol lunds and
relucLance ol shoppers Lo pay a hiqh price lor Lheir purchases. ln Loday's volaLile markeL scenario, mosL reLail
companies have riqhLly prioriLized operaLional improvemenL and cosL manaqemenL as a key locus lor Lhe nexL
twelve months.
ln Lhis issue, we hiqhliqhL sLraLeqies adopLed by Lhe US reLail indusLry Lo manaqe cosLs in a downLurn. Our
reLail Leam, wiLh research inpuLs lrom Lhe reLail analysLs ol LrnsL & Younq in Lhe UniLed SLaLes has evaluaLed Lhese sLraLeqies which
have been adopLed by Lhe US reLail indusLry Lo combaL Louqh markeL siLuaLions. 1hese sLraLeqies will provide uselul inpuLs lor reLail
companies in lndia as Lhey seek answers on how Lo manaqe Lhrouqh a downLurn. From our pasL experience in Lhe secLor we have also
assessed some areas for Indian retailers to focus on in order to reduce operating costs.
ln addiLion Lo Lhe ellecLs ol Lhe slow markeL which do noL bode well lor Lhe reLail seqmenL in lndia, Lhe reLail revoluLion in lndia
conLinues Lo lace Lhe FDl challenqe. Keepinq currenL requlaLions in mind, 'lranchisinq' is an ellecLive enLry sLraLeqy wiLh limiLed
risks. 1his issue discusses indepLh lranchisinq opLions in lndia lor loreiqn reLailers. We are qraLelul Lo have Mr. S. Ravi KanL, Chiel
OperaLinq Ollcer, 1iLan lndusLries Lyewear business, share his insiqhLs on challenqes associaLed wiLh enLerinq inLo Lhe reLail
business and benelLs achieved Lhrouqh successlul lranchisinq. Also included is a case sLudy on Hamleys enLry inLo lndia, laciliLaLed
by LrnsL & Younq, which Lhrows liqhL on how loreiqn reLailers can successlully enLer Lhe lndian markeL by aliqninq Lheir sLraLeqy Lo
Lhis markeL. As reLailers locus on LiqhLeninq Lheir operaLions and evaluaLe lranchisinq sLraLeqies, manaqinq Lhe risk ol lraud in Lhe
reLail indusLry becomes a siqnilcanL operaLional challenqe. Our arLicle on 'Fraud in ReLail' helps idenLilyinq and evaluaLinq key risk
areas while providing options to mitigate these concerns.
Many companies have indeed Laken up cosLreducLion measures which is cerLainly Lhe need ol Lhe day. Companies LhaL speedily
respond Lo Lhe currenL challenqes and propaqaLe ellecLive execuLion over planninq will do well in Lhe lonq Lerm. WhaL is needed aL
the moment is swift responsiveness and tenacity to get through the current turbulence.
Once aqain, we look lorward Lo hearinq your valuable commenLs and leedback. We hope you en|oy readinq Lhis issue.
Pinakiranjan Mishra
lndusLry Leader, ReLail & Consumer ProducLs PracLice
LrnsL & Younq, lndia
3 The retailer
Strategic cost management opportunities
and lessons for Indian retailers
Franchising as a preferred entry option
Interview with S. Ravi Kant
ChieI Cperating CIhcer Titan Eye Plus
Fraud in retail
A toy story Hamleys entry into India
4

12
16
18
24
Contents
3 The retailer
Involve yourself:
We look lorward Lo hearinq your leedback and suqqesLions.
1o conLribuLe Lo ediLorial conLenL, please conLacL Alshan Rubb
L: alshan.rubbin.ey.com
1: +91 80 ^027 5070
^ The retailer
Strategic cost management
Opportunities and lessons for Indian retailers
1he lndian reLail indusLry has been wiLnessinq dillculL Limes
recenLly. 1he currenL markeL Lurmoil has only led Lo a worse
situation with shoppers staying away and unwilling to pay a
higher price for their purchases. The foremost thought among
most retail companies has been the issue of how to address
costs. The industry recognizes that something needs to be done
buL is lookinq aL whaL Lo do and how Lo do iL. 1he absence ol
any pasL Lrend has only made Lheir posiLion more dillculL. While
Lhe acLual cosL prolle miqhL be dillerenL across economies, Lhe
retail industry is fundamentally a low margin industry across the
world. 1herelore, iL is imporLanL Lo Lhink ol cosL manaqemenL
in every possible acLiviLy in Lhe orqanizaLion. CosL manaqemenL
thus becomes a strategic issue being faced by the industry. It is
also useful to understand why Indian retailers forget this basic
mantra of the retail business.
Lack of prior experience 1. Similar Lo any new indusLry,
most retail organizations and their staff do not have prior
experience ol reLailinq. As a resulL, Lhe lundamenLal low cosL
business model was largely ignored assuming that India was
"dillerenL." 1oday, reLailers are wakinq up Lo Lhe lacL LhaL
while Lhe lndian consumer miqhL be dillerenL, Lhe business
models largely remain the same across the world with some
variaLions. Moreover Lhey also had no pasL experience Lo
lall back on. As Lhe indusLry qrapples wiLh cosL issues, iL will
slowly learn Lhe Lricks ol Lhe Lrade and build a susLainable
model in the future.
Regulatory issues 2. One ol Lhe key sLraLeqies adopLed by
Lhe reLail indusLry qlobally is price opLimizaLion across sLock
keepinq uniLs {SKUs) and sLores. ReLailers lx Lhe sellinq
price lor producLs dependinq on iLs demand and oll Lake.
1herelore, Lhe same producL is priced dillerenLly dependinq
on lacLors such as sLore locaLion, economic environmenL
of the neighborhood and the demand for the product. This
allows retailers to optimize the pricing for better margins and
beLLer cosL recovery. ln lndia, Lhe lnal prices are qoverned by
Lhe maximum reLail price {MRP) reqime and reLailers are noL
allowed Lo charqe a price qreaLer Lhan MRP. As a resulL, Lhe
stores are not able to charge a premium in neighborhoods
which have a better propensity to pay or at locations
where sLore cosLs are hiqh. 1herelore, Lhe opLions ol
increasing margins largely revolve around cost and discount
management rather than smart pricing strategies.
Lack of analysis & process standardization 3. AnoLher
challenge in retail is to not only procure products and
services at the right price but also to sustain the cost
advanLaqe over Lime. Overcominq Lhis challenqe requires
a hiqh deqree ol knowledqe wiLhin an orqanizaLion wiLh a
strong culture of learning and monitoring.
ln larqe inLernaLional reLail companies, Lhere exisLs a sLronq
monitoring mechanism for procurement with deviations
beinq moniLored closely. For mosL reLail companies in lndia
Loday, Lhere is no sysLemaLic analysis ol procuremenL prices
and undersLandinq ol Lrends. As a resulL, iL is dillculL Lo
procure well and Lhen Lo susLain Lhe process. A case in poinL
is Lhe various discounLs and markeLinq supporL provided by
suppliers to retailers. In the absence of proper processes
and documenLaLion, Lhere are dillerences in undersLandinq
ol Lhis amonq procuremenL Leams which leads Lo inellcienL
procurement management in several retail companies.
ll we sLudy Lhis issue amonq suppliers {primarily FMCC
companies), marqin manaqemenL is a hiqhly evolved and
manaqed process. A deLailed undersLandinq ol how Lhe FMCC
industry monitors cost and margins would be useful for
Indian retailers.
Lack of scale 4. A key concern beinq laced by Lhe indusLry is
lack ol scale and hence lower purchasinq power. An analysis
ol cosL as a percenLaqe ol sales lor Lhe years 2001 Lo 2007
has revealed that cost remained high instead of falling during
Lhis period even alLer sales increased. On Lhe conLrary, daLa
lrom Lop US reLailers lor Lhe years 2001 Lo 2007, revealed
that cost as a percentage of sales largely remained almost
the same with a marginal decreasing trend.
Need for strategic cost management in
Indian retail
MosL reLail business models are larqely similar across Lhe world
Lhouqh cusLomers miqhL buy dillerenLly. ll we look aL Lhe cosL
prolle ol lndian reLail companies, visvis qlobal reLailers, iL
is possible Lo reduce expenses Lhrouqh a sLronq inLernal locus
on each elemenL ol cosL. On observinq Lhe sales and cosL daLa
lor Lhe lasL seven years, iL is apparenL LhaL while sales have
qrown siqnilcanLly, mosL reLail companies have noL been able Lo
benelL lrom Lhis increase.
An LrnsL & Younq analysis ol Lhe cosL prolle ol Lhe Lop 1^
reLailers in Lhe US over Lhe lasL 18 years hiqhliqhLs several
issues lor lndian reLailers. FirsLly, iL shows LhaL cosL manaqemenL
will be a key locus lor Lhe lonqLerm success ol any reLail
company. Secondly, iL clearly demonsLraLes LhaL reLailers who
have done well over a sustained period have focused on cost
manaqemenL. On analyzinq Lhe same daLa lor dillerenL reLail
lormaLs, we lound LhaL discounLers and cashandcarry lormaLs
were able Lo manaqe Lheir cosL prolle beLLer over Lhe lasL 18
years than other retailers. They had reasonable stability with
minimum variation during this period while other retail formats
experienced siqnilcanL cosL variaLions. 1herelore, Lhere is a
strong case for cost management as an overall strategy for
reLail companies. 1his holds especially Lrue in a Louqh markeL
siLuaLion like Lhe one beinq wiLnessed currenLly by Lhe lndian
retail industry.
1027
1,000
2,000
3,000
^,000
5,000
6,000
7,000
8,000
9,000
10,000
1007
987
967
9^7
927
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)
C
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7

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s
a
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e
2001 2002 200^ 2006 2003 2005 2007
Orqanized reLail CosL as 7 ol sale
Key Indian retailers- trends in sales and total cost as a % of sale
Source: Annual reporLs and LY analysis
S
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%

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Sales
1oLal cosL as 7 ol sale
Key US Retailers- trends in sales and total cost as a % of sale
Source: Annual reporLs and LY analysis
2001 2002 200^ 2006 2003 2005 2007
977
^0
32
2^
36
28
20
957
937
967
9^7
927
5 The retailer
6 The retailer
Our analysis also showed LhaL lor 6^7 , i.e., 9 ouL ol Lhe 1^
reLailers, cosL as a percenLaqe ol sales decreased each year
excepL lor Lhose years where Lhe US economy laced a downLurn/
recession. 1he years in quesLion were 200708: subprime
morLqaqe crisis {unemploymenL raLe: 6.1) ; 2001: crash
ol Lhe doL com bubble {unemploymenL raLe: 5.7 ); 1996:
economic downLurn and unemploymenL raLe risinq up Lo 5.6
and 1991 which had Lhe lowesL economic qrowLh since 1930
{unemploymenL raLe: 7.3).
For Lhe same period, nine reLailers who were sLronqly locused
on cost management were able to bring down total cost by
1.57 and Lheir LoLal cosL as a percenLaqe ol sales was a healLhy
9^7 aqainsL an indusLry averaqe ol 967. However, il we look aL
Lhe remaininq lve reLailers, Lheir cosL increased by abouL 1.57
during the same period and their overall cost as a percentage
ol sales sLood aL 987. 1his clearly reveals why reLailers should
locus on cosL manaqemenL consLanLly, especially in a dillculL
economic situation.
Some ol Lhe oLher inLeresLinq Lrends lound were in manpower
ellciency and invenLory manaqemenL. Durinq Lhis period, sales
per employee qrew aL an averaqe ol ^.637 per year. ReLailers
locused on process improvemenL and simplilcaLion which led Lo
better management of costs. They also focused on manpower
rationalization and realignment as a result of improved process
deploymenL. Nine ouL ol Lhe 1^ reLailers were also able Lo
reduce invenLory Lurnover wiLh improvemenLs ranqinq lrom 67
Lo 507. 1he averaqe invenLory days durinq Lhis period was 63
Cost break-up (% total sales) for US retailers
787
207
27
COCS
COCS
S, C and A
CosL ol qoods sold
Sellinq, qeneral and adminisLraLive
S,C and A DepreciaLion
Source: Annual reporLs and LY analysis
1991 1993 1996 1992 1995 199^ 1997 1998 19992000 2001 2002 2003 200^ 2005 2006 2007 2008
0
2
^
6
8
10
12
1^
N
u
m
b
e
r

o
f

r
e
t
a
i
l
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r
s
ReLailers wiLh increasinq YoY cosL as a 7 ol sale ReLailers wiLh decreasinq YoY cosL as a 7 ol sale
Source: Annual reporLs and LY analysis
US retailers- trends in cost as a % of sale
The retailer 7
wiLh CosLco manaqinq a Lurnover ol 30 days. 1he cosL breakup
inlormaLion revealed LhaL Lhe larqesL componenL ol cosL, cosL
ol qoods sold, reduced lrom 777 in 1991 Lo 757 in 2008 {as a
percenLaqe ol sale).
So what does it mean for the Indian retail
industry?
lL is quiLe evidenL LhaL Lhe lndian reLail indusLry needs Lo make
cosL manaqemenL a key manLra lor survival. 1here are Lwo
broad sLraLeqies lor manaqinq cosLs
External strategies 1. adopted by retailers to meet the
challenges of the business environment and competition. We
will sLudy Lhe sLraLeqies adopLed by US reLailers and examine
if some of them can be adopted in India.
Internal strategies- 2. where Lhe reLailer needs Lo look aL
ellciencies and operaLional improvemenLs Lo cuL/manaqe
costs. We will identify the potential opportunities for Indian
retailers and also present some case studies relevant to the
domesLic markeL.
External cost management strategies lessons
from US retailers
1he US economy is qoinq Lhrouqh a dillculL phase wiLh
cusLomers downLradinq as well as reducinq purchases. 1his
has impacted most retailers and many of them have adopted
strategies to manage their overall cost.
Staff rationalization SLallnq lorms a key cosL lor reLail
and hence several retailers are planning to reduce this by
raLionalizinq operaLions and reducinq excess manpower aL Lhe
corporaLe ollce. 1his can be done by reorqanizinq disLribuLion
channels, ollces or deparLmenLs. JC Penney has cuL abouL
100 Lo 200 |obs and is incorporaLinq improved operaLional
processes by merqinq markeLinq operaLions lor iLs sLore, caLaloq
and online business in order Lo brinq abouL qreaLer ellciency.
Macy's has consolidaLed iLs US operaLions resulLinq in a more
ellcienL orqanizaLion sLrucLure. 1he company expecLs a savinq
ol abouL USD100 million in 2008 by reducinq iLs sellinq and
adminisLraLive expenses as a resulL ol Lhe revamp. Ann 1aylor,
which has embarked on a cosL reducLion proqram, expecLs a
savinq ol abouL USD25 Lo USD50 million by reducinq 137 ol iLs
corporate staff.
In-store partnerships A smarL way Lo qeL Lhe mosL ol each
square looL ol reLail space is Lo ensure Lhe maximum value lor
reLailers as well as shoppers. Several reLailers are lookinq aL
8 The retailer
chain Zales has announced plans Lo close 60 sLores, while Ann
1aylor plans Lo close 117 sLores wiLhin 2 years. 1his clear LacLic
lollowed by several US reLailers Lo close sLores is noL Lo renew
exisLinq leases or demand subsLanLial discounLs durinq renewal.
Indian retailers have set up stores in several locations that
probably do not have the necessary footfalls or pay lease rentals
LhaL do noL lL inLo Lhe reLail business model. ln such cases, iL is
appropriate to review the need for such stores from a business
and strategic perspective.
Inventory trimming and ordering ReLailers are increasinq
locus on Lrimminq and ad|usLinq invenLory Lo manaqe cosLs
and risk ol markdowns. ln a Louqh markeL, cusLomers are noL
only expecLed Lo Lrade down buL also Lo buy less. ReLailers
are Lakinq a risk ol losL sales raLher Lhan unsold invenLories.
This means they are ordering less and with greater discretion.
1houqh luxury reLailer Neiman Marcus has a very loyal seL
ol cusLomers, iL expecLs Lhem Lo buy less and is ad|usLinq iLs
invenLory Lo relecL Lhis. JCPenney is reducinq iLs invenLory Lo
space laLer markdowns lor unsold producL. Suppliers such as
ProcLor & Camble and Levi SLrauss have already experienced
reduced ollLake lrom larqe reLailers. 1his is primarily a resulL ol
a reducLion in Lhe number ol SKUs by larqe reLailers. 1hey are
also makinq Lheir orderinq more precise Lo reduce Lhe risk ol
markdowns laLer. Several reLailers such as Cap, JCPenny and
Kohl's have achieved enhanced marqins by orderinq beLLer.
Green strategy Several reLailers have adopLed a qreen
sLraLeqy and believe LhaL iL is noL |usL qood markeLinq buL also
makes lor qood economics, eiLher Lhrouqh cosL savinqs or Lax
breaks. More Lhan 807 ol larqe US reLailers have announced a
qreen sLraLeqy. Some ol Lhe sLraLeqies LhaL have been deployed
comprise reducinq enerqy cosL, sourcinq more enerqy ellcienL
producLs, recycled packaqinq, usinq enerqy ellcienL liqhLinq
and susLainable pracLices. When RLl, a leadinq cloLhinq and
ouLdoor qear reLailer in Lhe US, builL sLores wiLh skyliqhLs, iL noL
only saved enerqy by brinqinq in naLural liqhL, buL also improved
insLore parLnerships as a parL ol Lheir sLraLeqy. 1his works lor
the retailer as they can release less productive space to another
brand/company Lhus reducinq Lheir cosL. 1he insLore parLner
gets strategic access in several locations and assured footfalls.
lL is benelcial lor Lhe cusLomers as well, as more brands are
available in the same retail store. This means less time is spent
in multiple stores. This is most evident in partnerships with fast
lood chains, especially branded ones. So alLer shoppinq, Lhe
lamily can |usL have a meal aL a McDonalds or a Dunkin DonuLs
at a Walmart store. The same is true for Target which now has
abouL 800 SLarbucks ouLleLs in iLs sLores. SLarbucks also has
ouLleLs in Shop & SLop supermarkeLs, a parL ol Royal Ahold
qroup. lL sells collee, pasLries and packaqed collee Lhrouqh
Lhese sLores and Lhe arranqemenL now lorms a key sLraLeqy
lor providinq value Lo cusLomers ol Shop & SLop. AddiLionally,
Lhis means more cusLomers, more Lime spenL aL Lhe sLores
and better returns from the store space. While fast food is the
mosL obvious lL, iL is noL Lhe only one. ReLailers Loday can
brinq in value by addinq complemenLary brands Lo maximize
sLore uLilizaLion and hence reduce cosL. ln May Lhis year, Macy's
announced a parLnership wiLh FAO Schwarz, an upmarkeL Loy
merchanL. As a parL ol Lhis parLnership, Macy's will have an FAO
Schwarz deparLmenL in all iLs 685 sLores in Lhe nexL 2 years. A
Lrial run lasL year in one ol Macy's sLores was noL only successlul
for the toy company but also drove up the childrens apparel
business siqnilcanLly lor Macy's.
Store closures A common sLraLeqy durinq dillculL Limes is
Lo choose which sLore Lo keep and which Lo close. Several US
reLailers are lookinq closely aL sLore perlormance Lo idenLily
Lhose LhaL need Lo be shuL down. SLarbucks has announced
plans Lo shuL more Lhan 600 sLores by March nexL year. MosL ol
Lhe sLores closed will be Lhose in Lhe viciniLy ol oLher SLarbucks
stores. The company believes that this will help manage costs
while servinq almosL Lhe same seL ol cusLomers. Cap has also
announced plans Lo shuL 85 sLores in 2008. Jewelry sLore
9 The retailer
The LrnsL & Younq Leam was asked Lo review Lhe capiLal
expendiLure ol a larqe lndian reLailer. 1o sLarL wiLh, Lhe Leam
analyzed Lhe key cosL elemenL ol seLLinq up a sLore once Lhe
siLe was delivered. 1hey idenLiled some essenLials such as
shelves and lLouLs, loorinq and elecLricals as conLribuLinq
Lo Lhe cosL lor Lhe pro|ecL. 1hey also idenLiled Lhe key cosL
levers that impacted these cost elements. These ranged from
manpower availability to copper prices. The team then did an
inLernal benchmarkinq Lo undersLand Lhe real cosL ol some ol
Lhese elemenLs, usinq meLrics oriqinally prepared lor an FMCC
company LhaL had |usL seL up a lacLory in ULLaranchal. 1his was
followed by a detailed discussion with the retailers procurement
Leam Lo undersLand key process issues. 1he Leam also
researched Lhe impacL ol Lhe cosL levers and how Lhe knowledqe
could be used in Lhe cosL reducLion exercise.
1he Leam idenLiled areas which had conLribuLed Lo cosL
escalaLion. Poor conLracLinq, nonrecovery and laLe orderinq
were a lew issues aparL lrom poor price neqoLiaLions. Once
Lhe process issues were idenLiled and soluLions provided, Lhe
Leam concenLraLed on Lhe acLual prices paid lor Lhe Aclass
iLems. 1he cosL elemenLs were lurLher broken inLo subelemenLs
and prices obLained lrom LrnsL & Younq's benchmarks lrom
other industries.
As a resulL ol Lhe above exercise, Lhe overall capiLal expendiLure
ol Lhe sLore was reduced by approximaLely 207.
sLall morale and producLiviLy. WalMarL is LesLinq relriqeraLors
that have motion sensors to turn off the lights when no one is
around, savinq Lhe company subsLanLially in enerqy cosLs. BoLh
BesL Buy and WalMarL are encouraqinq laL screen 1V suppliers
Lo cuL Lheir enerqy cosL by 307. 1his will noL only help clienLs
buL will also cuL down insLore enerqy cosL ol display. WalMarL
recenLly sLarLed sellinq only concenLraLed liquid deLerqenLs
LhaL required less plasLic in packaqinq which in Lurn reduced
LransporLaLion cosLs owinq Lo Lheir smaller packaqinq.
Internal cost management strategies how to
stay ahead in the game
AparL lrom exLernal sLraLeqies discussed above, Lhere are
siqnilcanL opporLuniLies lor lndian reLailers Lo reduce cosL
Lhrouqh an inLernal assessmenL. 1he obvious quesLion Loday is
where do we start and how do we do it?
Some ol Lhe key sLeps LhaL companies can adopL Lo underLake a
sLraLeqic inLernal cosL reducLion exercise are lisLed below
Form a task force Though companies should carry out internal
cosL manaqemenL pro|ecLs as a naLural course ol business, iL
requires a delniLe locus and Lop manaqemenL involvemenL in
Lhe iniLial sLaqes. 1herelore mosL ol Lhese pro|ecLs should have
a dedicaLed Lask lorce wiLh supporL lrom an exLernal consulLanL
lor laciliLaLion, aL leasL lor Lhe iniLial period.
Understand your cost levers A qood place Lo beqin is Lo
undersLand Lhe cosL prolle ol Lhe company. 1his would require
a hiqhlevel assessmenL ol Lhe key cosL elemenLs includinq
how they have moved over time and why. This process should
noL be limiLed Lo lookinq aL numbers alone buL should include
discussions wiLh operaLinq sLall. OlLen people downLheline are
aware ol Lhe acLual reasons lor hiqh cosL. Moreover, iL also helps
in identifying process costs incurred due to duplication
and wastage.
Benchmark company costs 1he nexL sLep is Lo undersLand Lhe
cosL prolles ol Lhe compeLiLion, especially Lhose LhaL seem Lo
be doinq beLLer in cosL manaqemenL. OlLen Lhis is noL easy, buL
is possible Lhrouqh exLernal consulLanLs, suppliers and indusLry
conLacLs. Benchmarks are olLen available noL lrom Lhe reLail
indusLry buL oLher indusLries such as FMCC and manulacLurinq.
lL would also be uselul Lo quesLion why some reLailers are beLLer
at managing some elements of cost in comparison to others.
OlLen iL helps Lo undersLand whaL sLraLeqies oLher companies
are adopLinq Lo manaqe Lhese cosLs and how Lhis knowledqe can
be leveraged.
Case study network optimization and
perishables cost management
The retailer 10
1he LrnsL & Younq Leam was inviLed Lo assisL a larqe lndian
food and grocery retailer to review supply chain processes. The
pro|ecL beqan wiLh idenLilyinq various cosL elemenLs lorminq a
parL ol Lhe LoLal supply chain cosL. 1he nexL sLep was prioriLizinq
Lhese cosL elemenLs based on a combinaLion ol lacLors, Lhe
primary ones being the feasibility of cost reduction and the
value siqnilcance ol Lhe cosL driver. 1hrouqh Lhis exercise, and
discussions wiLh Lhe manaqemenL Leam, neLwork opLimizaLion
and wasLaqe manaqemenL were idenLiled as Lhe key locus areas
within the supply chain.
A deLailed analysis ol Lhe currenL disLribuLion neLwork was
underLaken and a new sLraLeqy Lo supply merchandise lrom Lhe
disLribuLion cenLer Lo Lhe sLore was developed Lo achieve neLwork
opLimizaLion. 1his resulLed in a 307 reducLion ol leeL and hence
transportation cost. The study also led to rationalization of space
usaqe and Lhe company moved Lo a smaller DC, Lhus reducinq
renLal cosL by 257.
1he lnished qoods invenLory was reviewed across Lhe supply
chain. An ABC classilcaLion ol SKUs was perlormed, lollowed
by idenLilyinq sLockinq norms lor Aclass SKUs. A more ellcienL
process lor Limely idenLilcaLion and disposal ol damaqed
invenLory was implemenLed. ConLrol over expiry was lurLher
enhanced by neqoLiaLinq recovery lrom vendors. As a resulL ol
Lhese measures, Lhe Leam was able Lo reduce wasLaqe lrom 187
Lo 157.
Interest cost
(6.5%)
COGS
(79%)
Depreciation
(4.5%)
Rent
(7%)
Marketing
(3.5%)
Supply chain
(11.8%)
Administrative
expenses
(5.5%)
Manpower
(5%)
Feasibility of cost reduction
V
a
l
u
e

s
i
g
n
i
h
c
a
n
c
e

o
I

c
o
s
t

l
e
v
e
r
Diaqram is illusLraLive
11 The retailer
Pinakiran|an Mishra heads Lhe ReLail
& Consumer ProducLs pracLice ol
LrnsL & Younq, lndia. Pinaki
is responsible for managing
relaLionships wiLh key reLail clienLs
and has been involved in the sector
lor Lhe lasL 6 years . He has advised
clienLs on process reviews & SOP preparaLion, cosL
manaqemenL, pro|ecL manaqemenL, parLner prollinq,
merqers and acquisiLions, l1 implemenLaLion, eLc. Pinaki
works closely wiLh Lhe Lop manaqemenL ol several
companies in the sector.
1: +91 22 ^035 6321
L: pinaki.mishrain.ey.com
Finalize cost reduction plan Once Lhe benchmarks are
esLablished, a company needs Lo scruLinize Lhe exLenL ol
variance and the implications it may cause for the company.
ll Lhe variaLion is larqe, iL miqhL mean a compleLe chanqe in
Lhe operaLinq process or Leams. A larqe reLailer esLablished a
central commercial team independent of the procurement team
when iL lound Lhe neqoLiaLion and lnalizaLion process by such
a Leam was more ellecLive. 1he model has been workinq very
successlully now lor over Lhree years. A small variaLion may
mean no acLion or discussion wiLh Lhe key vendor. 1he lnal plan
should incorporate these issues for a successful implementation.
Prepare implementation strategy The most important part
of a cost reduction plan is to have a strong implementation
sLraLeqy. Once Lhe ideas are accepLed and aqreed, manaqemenL
should be qiven Lhe Lask ol implemenLinq Lhese wiLhin a delniLe
time frame and measurable output. This should form a part
ol Lhe key resulL areas {KRAs) lor relevanL execuLives. 1here
should be a sLronq moniLorinq process, prelerably assisLed
Lhrouqh an exLernal aqenL Lo remove bias and enable accuraLe
progress reporting.
Critical success factors
SLraLeqic aliqnmenL
CosL opLimizaLion is clearly delned across Lhe business as
a key prioriLy
Leadership and key business owners are aliqned on
strategic importance
CosL opLimizaLion is embedded inLo Lhe key perlormance
metrics of the organization
Value areas
The focus is on cutting the right costs in the right areas
while enhancing and not restricting the delivery of the
business strategy
Waste is eliminated through a sustainable process and
organizational improvement
All opLimizaLion levers have a measurable and realizable
lnancial impacL
Ownership and accounLabiliLy
The organizational leaders endorse and drive the change
CosL LarqeLs are undersLood, credible and commiLLed Lo by
named individuals
All sLakeholders buy inLo Lhe benelLs and demonsLraLe
Lhe required cosL locused behaviors
BenelLs realizaLion
BenelLs realizaLion is noL an add on, iL is enqrained in Lhe
program team
1he benelLs baseline is apparenL wiLh seL milesLones lor
clear inliqhL review
AchievemenL ol LarqeLs are celebraLed, shorLlalls are clear
and individuals accountable
Conclusion
OrqanizaLions musL expand Lheir view ol cosL reducLion beyond
makinq isolaLed LransacLional decisions such as reducinq
headcounL, slashinq adverLisinq or resLricLinq Lravel. 1hey
need Lo comprehend Lhe broad and lonqLerm impacL LhaL cosL
reduction has on an entire organization.
CosL manaqemenL is a sLraLeqic |ourney noL |usL a LacLical
exercise. CosL reducLion is noL only abouL reducinq shorLLerm
cosLs and increasinq ellciencies. lL is also abouL chanqinq a
companys cost structure by doing things in new and different
ways or avoiding them all together through the use of new
technologies and emerging business models.
lL is possible Lo reduce cosLs rapidly, buL Lhe real success lies in
susLaininq ellciency Lhrouqh improved perlormance.
ConLribuLions by Pamela L SLubinq and Luci Charnas, SLraLeqic AnalysLs,
LrnsL & Younq, UniLed SLaLes
12 The retailer 12
Franchising as a preferred entry option
Rapid qrowLh in Lhe lndian economy has made lndia one ol Lhe
mosL lavored desLinaLions lor loreiqn direcL invesLmenL {FDl).
RecenLly, liberalizaLion in FDl norms in relaLion Lo reLail in lndia
has aroused the interest of foreign retail giants wanting to
esLablish Lheir presence in lndia, and ol exisLinq players lookinq
Lo siqnilcanLly expand Lheir operaLions.
CurrenLly, lndia resLricLs FDl Lo 517 in sinqle brand reLail,
sub|ecL Lo prior qovernmenL approval, wiLh FDl in mulLibrand
reLailinq lorbidden. However, invesLmenL in wholesale cashand
carry businesses is allowed and is often the means of entry
lor loreiqn reLailers, alonq wiLh parLnerships and reLail
franchisee agreements.
Franchisee as an ideal entry route for big
international players
The franchise model has adapted itself well to the Indian
markeL condiLions providinq opporLuniLies lor a larqe number
ol enLrepreneurs Lo work wiLh Lhe supporL ol biq brands. Clobal
players like USbased 1ommy Hillqer, NeLherlandsbased SPAR
lnLernaLional, UKbased CosLa Collee and oLher inLernaLional
companies such as HerLz, Avis, Radisson, KenLucky Fried
Chicken, Domino's Pizza, 1hank Cod iL's Friday, Ruby 1uesday's,
Subway, MoLhercare and McDonald's have become lorerunners
in India through the franchising route. The franchising revolution
is, however, noL |usL limiLed Lo Lhe qlobal brands. Many lndian
brands such as Park Avenue, Color Plus, Provoque, Nirulas,
Saqar RaLna, Woodland shoes, LiberLy and many more have also
increased Lheir markeL presence via Lhis rouLe.
Some key facts
ln lndia, Lhe lranchise economy accounLs lor |usL over ^7 ol Lhe
counLry's qross domesLic producL. 1radiLionally, local lranchisinq
in lndia was limiLed Lo cloLhinq and looLwear brands. However,
the last few years have seen the penetration of franchising into
indusLries like compuLer educaLion, primary educaLion, F&B,
healLhcare and more recenLly enLerLainmenL and cyber kiosks.
ln lacL, iL is Lhe l1 educaLion indusLry which has been responsible
lor makinq Lhe concepL ol lranchisinq accepLable Lo people
across lndia. lL is Lhen noL surprisinq LhaL over 557 ol lndia's
600odd lranchisors happen Lo be in Lhe l1 services indusLry.
WiLh Lhe currenL boom in reLailinq and enLerLainmenL secLors,
lranchisinq is beinq examined by an increasinq number ol
operaLors as a qrowLh opLion. 1here are a number ol boLh home
grown and foreign players currently eyeing the sector.
Some key lacLs LhaL poinL Lo Lhe qrowLh ol Lhe lranchisinq secLor
in lndia are as lollows
1here are over 600 acLive lranchisors in Lhe counLry
1here are over ^0,000 lranchisees {across secLors) in
India today
The total manpower directly employed by these franchised
businesses is around 300,000.
A franchise business opens every 20 minutes in the
world. In India, it is between 20-48 hours.
13 The retailer
Franchisor industry classihcation
LducaLionl1 ^07
LnLerLainmenL ^7
F&B 27
HealLhcare 37
l1 enabled services 1^7
Miscellaneous 57
ReLailinq 97
Business services 117
Cyber cales 27
LducaLion LnLr. exams/lashion 107
LducaLionl1 327
Cyber cales 27
BeauLy/HealLh 67 F&B specialiLy 27
ReLailinqapparel/
looLwear 187
F&BlasL lood 87
F&Bcollee shops
27
ReLailinqqilLs/
lowers/Loys 107
F&BoLhers ^7
ReLailinqoLhers ^7
LducaLion
LnLrance
exams 107
Home
services 27
Source: Franchisinq Scenario in lndia by Franchisinq AssociaLion ol lndia
Industrial classihcation oI Iranchising in India
Lookinq aL Lhe various advanLaqes ollered by Lhe lranchisee
model and Lhe qrowinq reLail secLor in lndia, many biq players
lrom across Lhe world are enLerinq Lhe lndian markeL Lhrouqh
Lhe lranchisee rouLe. Amonq Lhe Lypical indusLry secLors
wiLnessinq Lhe qrowLh ol Lhe lranchisee model are l1 educaLion,
lollowed by l1 enabled services, business services, prolessional
and vocaLional educaLion, reLailinq, enLerLainmenL
and healthcare.
How franchising works
Under a Lypical lranchisee model, Lhe loreiqn company
lranchisor enLers inLo a lranchisee aqreemenL wiLh an idenLiled
company in lndia/lranchisee. Such a lranchisee aqreemenL
grants various rights to the franchisee including the right to
use Lhe Lrademark and sale ol producLs ol Lhe lranchisor;
knowledqe ol meLhods ol disLribuLion, merchandisinq, packaqinq
and promotion in connection with the sale of the franchisors
producLs in lndia and developmenL riqhLs, e.q., exclusive riqhL
to open and operate franchisor outlets in India. In consideration
lor Lhese riqhLs, Lhe lranchisor is enLiLled Lo receive a lee lrom
Lhe lranchisee in lndia. Such a lee is aqreed under Lhe lranchisee
aqreemenL, usually as a percenLaqe ol sales.
lnLernaLionally, under a lranchisinq arranqemenL, Lhe lranchisee
makes Lhe capiLal invesLmenL, pays lranchise lees, royalLy eLc.
and Lhe lranchisor and Lhe lranchisee work LoqeLher durinq
the term of the agreement. India generally has been following
variations of the international model under hybrid formats such
as manaqemenL conLracLs, manaqemenL lranchise and |oinL
venture arrangements.
1^ The retailer
Some ol Lhe lranchisinq sysLems LhaL have been adopLed by
companies in lndia Lo expand on are
Causes of friction between franchisee and franchisor
ProducL or service delivery
77
Transparency
357
Training support
267
Revenue sharinq
107
None
187
Source: Franchisinq Scenario in lndia by Franchisinq AssociaLion ol lndia
Such lranchisee models works lor Lhe advanLaqe ol boLh
franchisor and franchisee. It provides the franchisee an
advanLaqe ol quick sLarL ol a new business based on a proven
Lrademark and lormula ol doinq business. 1he lranchise
arranqemenL also provides siqnilcanL Lraininq by Lhe lranchisor
which is often not available to individuals starting their own
business. Franchise model also provides Lhe lranchisor abundanL
opporLuniLies Lhrouqh which Lhey can expand Lheir business
across counLries and conLinenLs, and earn biq prolLs alLer Lheir
brand and lormula are properly execuLed.
However, manaqinq lranchise relaLionships is essenLial lor
the success of the business of both the franchisor and the
lranchisee. For a successlul lranchise arranqemenL, Lhe
lranchisee and Lhe lranchisor need Lo coexisL wiLh an open mind
towards each others ideas and thoughts through conscious
planning and development of successful relationships.
Future trend
Franchisinq is looked upon as Lhe luLure ol reLailinq. Judqinq by
Lhe number ol boLh naLional and mulLinaLional lranchise lrms
enLerinq Lhe lndian markeL, Lhere seems Lo be a loL ol poLenLial.
Franchise payments remittance challenges
Considerinq Lhe qrowinq prelerence lor lranchisee model,
a leading foreign retailer proposes to enter Indian franchise
markeL by enLerinq inLo a lranchisee aqreemenL wiLh a biq lndian
player for setting up franchise stores in India.
Under Lhe aqreemenL, Lhe lollowinq riqhLs are proposed Lo
be qranLed
Lxclusive riqhLs Lo sell Lhe lranchise or qoods in lndia under
Lhe lranchisor's brand name, and Lo open and operaLe Lhe
franchisors outlets in India
AssisLance in esLablishinq business in lndia, providinq requisiLe
Lraininq and oLher knowledqe such as Lhe desiqn and drawinqs
lor sLores in lndia, an operaLion manual, advice on required
IT infrastructure.
For Lhe above riqhLs, Lhe lranchisor proposes Lo charqe
an exclusiviLy lee, lranchisee lee, and conLribuLion lor
markeLinq expenses.
Player Franchise Franchisor Franchise Franchisor Franchise Franchisor
Input
Premises
Interiors {507) {507)
LquipmenL {507) {507)
SLocks
ManaqemenL
Franchise reLurns Marqin on sales RenL+ percenLaqe ol sales Hiqher minimum quaranLee marqin
on sales
Source: Business ol Fashion publicaLion
Model Pure franchise Management contract Hybrid
3 3 3
3 3 3 3
3 3 3 3
3 3 3
3 3
2 2 2
2 2
2 2
2 2 2
2 2 2 2
15 The retailer
PrashanL KhaLore is a leader wiLh
LrnsL and Younq's Lax advisory
pracLice. He has over 1^ years
ol experience in corporaLe direcL
Lax pracLices. His locus is on Lhe
lnancial, hospiLaliLy, commodiLies,
retail and consumer products and
pharmaceuLicals secLors. PrashanL
has worked on a wide ranqe ol lscal and requlaLory issues
including inbound and outbound investment structuring.
1: +91 12^ ^6^^790
L: prashanL.khaLorein.ey.com
Issue
Do the limits prescribed for royalty payments apply to
payments made under the franchise agreement?
Key limiLs under Lhe Foreiqn Lxchanqe ManaqemenL AcL, 1999
{FLMA) lor royalLy paymenLs
RoyalLy up Lo 27 ol exporLs and 17 lor domesLic sales can be
remiLLed under Lhe auLomaLic rouLe, lor use ol Lrademarks and
brand name ol Lhe loreiqn collaboraLor {in case ol aqreemenL
noL involvinq Lechnoloqy Lransler)
PaymenLs under loreiqn Lechnoloqy collaboraLion aqreemenL
with technology transfer are permitted under the automatic
rouLe, provided such paymenLs do noL exceed 57 ol
domesLic sales and 87 ol exporLs and lumpsum paymenL ol
USD2 million
RoyalLy paymenLs in excess ol above limiLs would require prior
approval ol Lhe Foreiqn lnvesLmenL PromoLion Board
No specilc relerence has been made Lo a lranchise lee wiLhin
FLMA. Relerence is made Lo AP {DlR Series)
1
Circular No.
76 daLed 2^ February 200^ relaLinq Lo Lhe liberalizaLion ol
current account transactions wherein the authorized dealers
{i.e., bankers) were permiLLed Lo allow remiLLances lor use ol a
Lrademark/lranchise in lndia. 1he circular lurLher clariled LhaL
Lhe Reserve Bank ol lndia's {RBl) prior approval will conLinue
Lo be required lor remiLLance Lowards Lhe purchase ol a
Lrademark/lranchise.
However, subsequenLly RBl Lhrouqh AP {DlR) Circular No.1^
daLed 28 November 2006 has liberalized Lhe condiLion ol
obLaininq prior approval lor Lhe purchase ol a Lrademark/
franchise. It may also be relevant to note that prior to the
aloremenLioned circulars, Lhere were separaLe enLries lor
remiLLance ol royalLy and remiLLance lor use ol Lrademark/
franchise in India in the current account transaction rules which
qives an indicaLion ol Lhe RBl's inLenL Lo recoqnize Lhe dillerence
between a royalty and a franchise fee.
FurLher, relerence can be made Lo Lhe delniLion ol "lranchise"
under Lhe services Lax laws
"Franchise" means an aqreemenL by which
The franchisee is granted representational right to sell i.
or manulacLure qoods or Lo provide service or underLake
any process idenLiled wiLh lranchisor, wheLher or noL a
Lrademark, service mark, Lrade name or loqo or any such
symbol, as Lhe case may be, is involved
1 Series ol circulars issued by Lhe Reserve Bank ol lndia
The franchisor provides concepts of business operation ii.
Lo lranchisee, includinq knowhow, meLhod ol operaLion,
manaqerial experLise, markeLinq Lechnique or Lraininq and
sLandards ol qualiLy conLrol excepL passinq on Lhe ownership
ol all knowhow Lo lranchisee
1he lranchisee is required Lo pay Lo Lhe lranchisor, direcLly or iii.
indirecLly, a lee
The franchisee is under an obligation not to engage in selling iv.
or providinq similar qoods or services or process, idenLiled
with any other person
Based on Lhe above and dependinq on Lhe acLiviLies envisaqed
under Lhe lranchise aqreemenL, iL may be analyzed wheLher
Lhe lranchise lee paid under Lhe aqreemenL, would qualily as
lranchise lee {ouLside Lhe ambiL ol Lhe limiLs menLioned above)
or covered under the limits prescribed for royalty payments.
Conclusion
1he lranchisee model is qaininq imporLance in Lhe lndian ReLail
Industry considering the plethora of advantages it offers to both
Lhe lranchisor and Lhe lranchisee. AppropriaLe sLrucLurinq ol
lranchise arranqemenLs can lead Lo opLimizaLion ol benelLs lor
both the franchisor and the franchisee and permit repatriation
of funds to the franchisor freely.
BoLh Lhe lranchisor and Lhe lranchisee should neqoLiaLe Lhe
Lerms ol Lhe lranchise aqreemenLs wiLh exLreme cauLion and
importance to optimize returns for a long lasting relationship.
16 The retailer
Ravi KanL is Lhe Chiel OperaLinq
Ollcer ol Lhe Lyewear business lor
1iLan lndusLries. He has been wiLh
1iLan lndusLries since 1988 and has
held many roles and responsibilities
within the group.
We cauqhL up wiLh him Lo Lalk abouL
1iLan's expansion plans and Lheir new eyewear business.
Interview with S. Ravi Kant
ChieI Cperating CIhcer eyewear business,
Titan Industries Limited
What is the U5P oI Titan Eye Plus? Please give us an 1.
overview of your business.
1iLan Lye+ is 1iLan's Lhird ma|or line ol business alLer
waLches and |ewelry and is aimed aL redelninq Lhe eyewear
markeL in lndia. Benchmarked aqainsL Lhe besL in Lhe world,
1iLan Lye+ ollers a huqe choice ol producLs, a compleLely
new shoppinq experience, carinq service and hiqhqualiLy
producLs unheard ol in Lhe lndian markeL. We are conldenL
that we will emerge as the leader in eyewear as we have
done in waLches and |ewelry in Lhe pasL.
1iLan Lye+ is leveraqinq Lhe company's reLail and desiqn
experLise Lo oller a worldclass opLical sLore experience
wiLh a ranqe ol over 1,000 sLylish producLs Lo help you look
your best.
1he sLores carry lrames bearinq Lhe brands 1iLan, Lye+ and
Dash {lor children). 1iLan Lye+ sLores also sell a hosL ol
inLernaLional brands ol lrames and sunqlasses. Conlorminq
Lo 1iLan Lye+'s exacLinq qualiLy sLandards, Lhe sLores oller
warranty up to one year on Titan products.
ln Lerms ol opLical lenses, Lhe company ollers Lhree brands
Lssilor, Kodak and 1iLan lenses. 1o ensure 1iLan lenses are
ol worldclass sLandards, Lhey are produced in collaboraLion
wiLh Lssilor, Lhe world's larqesL lens manulacLurer. ln
addiLion, Lhe sLores oller a sixmonLh warranLy on Lhe
Titan brand lenses. The store also sells contact lenses
and accessories.
1iLan Lye+ has recenLly enLered inLo a Lechnical pacL wiLh
Lhe renowned Sankara NeLhralaya lor Lraininq ol reLail and
clinic staff.
Does venturing into eye care mean that the Tata Group is 2.
entering into the wellness space?
1iLan Lye+ is a world class opLical sLore. We oller an
inLernaLional sLandard shoppinq experience lor eyewear
lrames, sunqlasses, conLacL lens, lenses, accessories eLc.
Could you give us an overview of your expansion plans? 3.
1oday we have 30 sLores across 12 locaLions wiLh more
sLores openinq shorLly. Our plan is Lo seL up over 200 sLores
in Lhe nexL 3 years.
Manpower and skill are a big challenge in retail. How are 4.
you able to overcome this?
1iLan Lye+ ollers a worldclass reLail experience. 1his
experience is builL on Lwo pillars an inLernaLional reLail sLore
desiqn and wellLrained sLall.
To ensure our retail and clinic staff is properly trained in
Lerms ol undersLandinq vision correcLion requiremenLs,
we have entered into an agreement with the renowned
Shankara NeLhralaya.
Our lranchisee parLners also help us ensure our service
qualiLy maLches up Lo Lhe 1iLan sLandards and we do noL
compromise on qualiLy.
Havinq said LhaL, ours is a complex caLeqory and iL is aL
Limes dillculL Lo lnd Lhe riqhL candidaLes lor Lhis |ob.
1o ensure LhaL our sLall is ol a superior qualiLy, we have
invesLed in an inLensive 60day Lraininq proqram lor all
of them.
AL an onqoinq level, we use Lhe combinaLion ol lranchisee
involvemenL, cusLomer leedback, onLhe|ob supervision and
mysLery cusLomer audiLs Lo ensure service qualiLy
is maintained.
What do you think are the challenges that you will face 5.
in your expansion plans and how are you planning to
mitigate this?
1he eyewear markeL is aL a nascenL sLaqe in lndia, wiLh very
few organized national players and very little awareness
ol Lhe caLeqory amonq consumers. Our primary Lask is Lo
create awareness of the need for accurate vision correction
and choosing eyewear that is the most in sync with the
consumers lifestyle.
Hence our primary locus is Lo undersLand Lhe consLanLly
evolving consumer and ensure that our product offerings
are in line with their latent needs.
17 The retailer
We work alonq Lhese lines usinq boLh lormal and
inlormal research Lhrouqh qualiLaLive research, insLore
observaLions and quanLiLaLive dipsLicks. 1he lndinqs are
Lhen disLilled and shared wiLh Lhe producL/desiqn Leam who
in Lurn work Lo creaLe a new line ol producLs. Our locus is
to launch at least three new collections each year to meet
consumer requiremenLs.
ln addiLion Lo Lhe above, as Lhe reLail markeL in lndia is
qrowinq rapidly, all ol us who operaLe in Lhis markeL lace Lwo
main challenqes
Findinq Lhe riqhL sLore locaLion aL Lhe riqhL renLal
Hirinq and reLaininq Lhe riqhL LalenL
As parL ol Lhe 1iLan lamily, we are able Lo leveraqe
our strength in design and retail operations to create
a worldclass ollerinq. 1his helps us when iL comes
to identifying the right franchising partners and the
suitable location.
Do you think franchising is the way to grow? If so, why? 6.
The retail revolution has brought many brands to India and
the franchising industry provides it with the
required resources Lo expand in a vasL counLry such as ours.
ConsequenLly, lranchisinq as a business is qrowinq by Lhe
day and has a fairly conventional industry spread such as
educaLion, reLailinq, prolessional services and healLhcare.
From our poinL ol view, lranchisinq is an ellecLive way Lo
grow our business as it enables us to focus on what we do
besL desiqn, reLail operaLions and brand buildinq. Our
experience wiLh boLh 1iLan and 1anishq has proved LhaL a
qood lranchisee neLwork makes all Lhe dillerence.
In India, the franchisee model has not been very 7.
successful and we often see a lot of companies convert to
own-stores how would you handle such a situation?
Our experience in 1iLan and 1anishq indicaLes LhaL Lhe
lranchisee model is quiLe impacLlul and has conLribuLed
siqnilcanLly Lo Lhe qrowLh ol boLh Lhe brands.
As a resulL, in 1iLan Lye+, we will ellecLively work wiLh a
mix ol companyrun and lranchiseeowned operaLions Lo
ensure maximum reach Lo our consumer base and qreaL
service qualiLy.
However, havinq said LhaL, Lhe lranchisinq model has noL
worked lor some companies. 1here are cerLain piLlalls in
the franchising model that one should be aware of. In some
cases, lranchisees' commiLmenL Lo service qualiLy is missinq,
whereas elsewhere the franchisors commitment to provide
Lhe promised supporL Lo Lheir lranchisees is in doubL, which
resulLs in a Lense relaLionship and doesn'L help anyone. Also
lnancinq lor lranchisees is a problem area as some lnancial
insLiLuLions do noL recoqnize solL expenses as parL ol Lhe
pro|ecL cosL.
ln summaLion, Lhis business model will work ellecLively
when there is commitment on both sides. Titan has
been fortunate in ensuring a high degree of involvement
by the franchisees.
All retailers are facing cost pressures. In your view, what is 8.
the best way to handle this?
We are currenLly in an expansion sLaqe and are locusinq
on iniLiaLives LhaL will help us qrow exponenLially in Lhe
coming years.
1hese iniLiaLives are aimed aL ensurinq prolLable qrowLh
and involve idenLilyinq suiLable locaLions lor our sLores,
creaLinq a worldclass ambience, workinq wiLh Lhe besL ol
lranchisees, desiqninq superior producLs and hiqhqualiLy
service. 1o ensure ellecLive uLilizaLion ol resources, we are
leaning heavily on our core strengths.
WiLh Lhe cosL pressures beinq laced, Lhe locus ol mosL
reLailers should be Lo keep a close waLch on renLal and
employee costs by enhancing productivity.
How do you think your format of operations will synergize 9.
with the other retail ventures of the Tata Group?
Lach consumerlacinq company in Lhe qroup has developed
a distribution and retail strategy that is best suited to their
indusLry. Havinq done LhaL Lhe businesses explore synerqies
that can be leveraged.
What is your advice to the new category of retailers who 10.
plan to foray into India?
The most important thing is to understand the consumer
belore you Lake Lhe plunqe. UndersLand lndia. lL is a lonq
haul if you have dreams of building a national retail chain.
18 The retailer
Fraud in retail
A cusLomer walks inLo a larqe reLail sLore Lo reLurn a pair ol
expensive shoes by ciLinq a qenuine reason and demands a cash
relund. Seeminqly, preLLy normal behavior, aL any number ol
reLail sLores across Lhe naLion. BuL, have you heard ol a Lrick
called return fraud!
Have you noLiced an invenLory shorLaqe ol expensive leaLher
baqs and excess ol normal inexpensive handbaqs? 1his is a Lrick
called sweet heartening!
1he lndian reLail secLor, as wiLh any oLher business, is prone
Lo many challenqes includinq lraudulenL acLiviLies, involvinq
physical qoods aL Lhe hearL ol iLs operaLions. ReLail companies
have to constantly update fraud mitigation strategies and
Lechniques Lo cope up wiLh innovaLive lraud schemes beinq
adopLed by imaqinaLive lraudsLers. AddiLionally, Lhere is
pressure on reducinq Lhe impacL ol lraud/leakaqe and increasinq
return on investment.
Findinqs ol one ol LrnsL & Younq's Clobal Fraud Surveys
revealed that
"367 respondenLs lrom lndia viewed Lhe qreaLesL risk Lo
the organization as internal fraud with third parties
"^27 ol lndian companies leel LhaL levels ol lraud have
increased in the last two years
Fraud vulnerabilities
ReLail secLor in lndia laces many challenqes in Lhe lorm ol
Trained manpower shortage
Complex and qeoqraphical spread ol supply chain and
logistics
CompeLiLion lrom qlobal reLail qianLs
lnvenLory shrinkaqe on mulLiple accounLs
Alarminqly, Lhe challenqes menLioned above are becominq
"pullinq poinLs lor lraud." Some ol Lhese challenqes are
discussed in the following paragraphs
Lack of trained manpower
One ol Lhe mosL criLical resources lor Lhe reLail secLor is
trained manpower to service the growing retail customers.
1he lndian reLailers' sLruqqle Lo lnd Lrained sLall and more so
have to pay higher remuneration in order to retain them and
keep Lhe moral hiqh. Hiqh aLLriLion coupled wiLh lack ol Lrained
manpower increases lraud vulnerabiliLies, which may impacL
the bottom line as well.
NoneIhcient supply chain
1he lack ol developed inlrasLrucLure and disLribuLion channels
in Lhe counLry resulL in inellcienL processes, makinq sourcinq
and disLribuLion a challenqe lor Lhe reLail secLor due Lo
Indian geography spread
Unorqanized smallscale manulacLurinq
Diverse aqriculLural produce/qoods supply
Ineffective fraud controls monitoring of distribution channels
may result in losses to the company considering the value and
volume ol qoods LhaL may be in LransiL. Supply chain luncLion
in reLail is also prone Lo oLher lraudulenL acLiviLies like bribery
and corrupLion, over and above invenLory shrinkaqe.
Case 2- ManaqemenL ol a larqe reLail sLore promoLed
a semiqualiled employee, workinq as a supervisor lor
lasL lour years, Lo a manaqer posiLion over a qualiled
loor manaqer, who resiqned. 1he company audiLors
noLed shorLaqes in cerLain hiqhvalue SKUs durinq Lhe
yearend physical sLock counL. FurLher invesLiqaLion
ol Lhe shorLaqe ol SKUs revealed LhaL Lhe recenLly
promoted manager authorized a number of manual
invoices Lo remove Lhe SKUs ouL ol Lhe sLore. On
enquiry, Lhe manaqer conlessed and |usLiled his acLs
to meet the lifestyle set by the previous manager.
Case 1- Manohar {a new and inexperienced
employee) |oined a reLail chain sellinq women's
accessories in iLs producL ranqe. Due Lo lack ol
experience and inadequaLe Lraininq, Manohar
unknowinqly made reqular misLakes in Lhe dayLoday
sLore operaLions such as price labelinq, sLock Lakinq
and updaLinq invenLory records. Soon he realized LhaL
Lhe misLakes were larqely qoinq unnoLiced and Lhere
was ample potential to gift some of the products to his
friends without having to buy them.
Inventory and accounting fraud
Fraud and LhelL, includinq employee pilleraqe, shoplilLinq,
vendor lrauds and laxiLy in supervision and adminisLraLion
{collecLively known as "shrinkaqe") are Lhe challenqes LhaL
both growing and more established retail companies are facing.
FurLher, Lhe impacL ol invenLory shrinkaqe is exponenLial as Lhe
cosL ol invenLory is already accounLed in Lhe books.
Crowinq neLwork and supply chain problems may lead Lo bribery
and corruption in addition to fraud. This could build pressures
on companies Lo labricaLe lnancial sLaLemenLs LhaL may noL be
correct or in compliance with accounting regulations.
ln Lhe Lhree cases relerred above, Lo conceal Lhe LransacLions,
employees adopted a scheme of systemic inventory
wriLeoll/wasLaqe ol a cerLain amounL each monLh alonq
with genuine transactions.
ReLail indusLry circles in lndia esLimaLe Lhe losses on accounL ol
invenLory shrinkaqe aL nearly 17 Lo ^7 ol Lurnover.
Other challenges
Some ol Lhe oLher challenqes laced by Lhe qrowinq reLail secLor
include evoluLion ol new reLail lormaLs, consLanL chanqes in
consumer preferences and intensive capital investments in real
estate and inventory.
Case 3- DeLailed invesLiqaLion on selecL ouLside
processors appointed by a retail giant to manufacture
apparel revealed LhaL wasLaqe {as claimed by Lhe
processors) was beinq diverLed Lo Lhe unorqanized
markeL. 1he Lriqqer lor Lhis invesLiqaLion was Lhe
increasinq Lrend ol wasLaqes. 1o manaqemenL's surprise,
even the processing contract was silent on the wastages
and claims by ouLside processors. As a resulL Lhe
processor and supply chain manaqer {who earned
kickbacks lrom Lhe processors) capiLalized on Lhe conLrol
qaps LhaL exisLed in Lhe company.
The retailer 19
The retailer 20
Fraud schemes in retail sector
Do you Lhink LhaL cusLomers are Lhe only lraud perpeLraLors?
1hink aqain. Vendors and employees have ready access Lo Lhe
qoods wiLh qreaLer knowledqe ol exisLinq inLernal conLrol
qaps. Some ol Lhe mosL common lraud schemes Lo waLch ouL
lor include
Fraud scheme Description
Cash skimminq Can be conducLed Lhrouqh sales LransacLions and lcLiLious reLurns.
1akinq cash "oll Lhe Lop" ol Lhe daily receipLs ol a business and ollcially reporLinq a lower LoLal.
The crime may be converting the funds to personal use or it may additionally entail the theft of the cash by hiding it from an
employer or business partner.
Inventory theft Theft of inventory can be as simple as removal of inventory from the warehouse or along the supply chain.
1his is more likely Lo happen in companies wiLh mulLiple invenLory locaLions or complex supply chains.
lL will manilesL as an oversLaLed accounLs receivable il Lhe Lhiel manipulaLes sales documenLs, or invenLory shrinkaqe and
lower gross margins.
ReLurn lraud 1he mosL common lorm ol reLurn lraud is reLurninq merchandise LhaL has been sLolen, eiLher lor cash or lor sLore crediLs.
A consumer comes Lo exchanqe a producL which acLually hasn'L been purchased lrom Lhe sLore in Lhe lrsL place.
Specially visible lor hiqhvalue merchandise such as apparel.
MarkeLinq lraud Company personnel collude wiLh cusLomers Lo share rebaLes, discounLs or promoLional iLems.
Sharinq promoLional iLems wiLh relaLives/lriends meanL lor qualilyinq cusLomers who buy cerLain producLs or ol a value
beyond the scheme threshold
SweeL hearLeninq An employee colludes wiLh a lriend or anoLher colleaque who poses as a cusLomer.
1he "sweeL hearL" lriend Lhen purchases some hiqhvalue iLem buL is billed lor a much cheaper producL.
21 The retailer
A simple analysis ol who Lhe possible perpeLraLor{s) could
be lor Lhe various lraud schemes, will qive you an idea LhaL
an employee plays Lhe key role. FurLher, ol Lhe Lhree possible
perpeLraLors, Lhe company's manaqemenL can exercise
maximum conLrol over Lhe employee acLions.
Scheme Perpetrator
Lmployee Vendor CusLomer
Cash skimminq
Inventory theft
ReLurn lraud
MarkeLinq lraud
SweeL hearLeninq
Fraud risks in the retail business
LisLed below are some ol Lhe illusLraLive lraud risks which exisL
in Lhe reLail indusLry and can be perpeLraLed by employees,
customers and vendors either individually or in collusion with
one anoLher. A reLail company should consLanLly endeavor Lo
implement and operate robust antifraud controls to mitigate
such risks.
Impact-
ReducLion in prolLabiliLy
Damaqe Lo repuLaLion
Threatens viability
Undermines credibiliLy
Dummy
vendors
Theft by
employees
FraudulenL
classilcaLion
of goods as
damaged
FicLiLious
sales
Collusion
between
employees and
vendors
ManipulaLion
of assets and
inventory
Bidriqqinq
pricelxinq
suppliers
FraudulenL
claims{relunds/
replacemenLs)
by customers
Fraud relaLed
Lo qualiLy ol
supplies
Kickback Lo
employees in
capex
FraudulenL
claims by
employees
Fraud triangle
If you were to analyze why an employee or third party would
perpeLraLe any ol Lhe lraud risks menLioned above, you
would realize LhaL lor every lraud Lo occur, Lhe exisLence
ol Lhree elemenLs {an incentive, opportunity and
rationalization) is exLremely crucial. 1his concepL is known
as the fraud triangle.
Incentive/pressure 1. Pressure on an individual {Lo include
employee and Lhird parLy) Lo misappropriaLe cash or oLher
organizational assets.
Opportunity 2. CircumsLances LhaL allow an individual
to carry out the misappropriation of cash or other
organizational assets.
Rationalization 3. A lrame ol mind or eLhical characLer
that allows an individual to intentionally misappropriate
cash or oLher orqanizaLional asseLs and |usLily Lheir
dishonest actions.
Fraud conditions
Incentive
OpporLuniLy RaLionalizaLion
3 3
3 3
3 3 3
3 3 3
3 3
22 The retailer
Incentive/pressure
Aqqressive sales LarqeLs
SLrinqenL markeLinq budqeLs
Personal lnancial obliqaLions
Job dissaLislacLion or low morale
Opportunity
Complex supply chain mechanism
DecenLralized auLhoriLies
SemiauLomaLed operaLions
Inventory susceptible to diversion
Ineffective accounting and information and control systems
Ineffective monitoring by management
Rationalization
Lmployee is dissaLisled wiLh Lhe |ob and believes Lhe company
owes to him
AcL ol commiLLinq lraud is |usLiled Lo help lamily/personal siLuaLion
Chanqes in lilesLyle coupled wiLh low salaries
Thrill of committing misappropriation
CusLomer may LreaL LhelL as borrowinq and inLends Lo reLurn iL
Key questions that need to be answered
LxecuLive manaqemenLs ol some ol Lhe leadinq companies
in other sectors have started identifying answers to the
lollowinq quesLions beinq asked by proacLive audiL commiLLees,
independenL audiLors and oLher key sLakeholders.
Do you have appropriaLe lraud qovernance acLiviLies and 1.
lraud risk idenLilcaLion processes?
Do you know Lhe mosL common Lypes ol lraud in 2.
your industry?
Do you know whaL kind ol lraud you are suscepLible Lo wiLhin 3.
specilc business luncLions or locaLions?
Do you have inLernal conLrols Lo miLiqaLe your key ^.
lraud risks? Do you have conLrols LhaL can deLecL lraud
related activity?
Have you LesLed Lhe ellecLiveness ol lraud prevenLion and 5.
detection controls?
Are roles and responsibiliLies perLaininq Lo prevenLinq, 6.
detecting and investigating fraud clearly outlined?
Anti fraud legislations/regulations
lncrease in requlaLors/sLakeholders expecLaLion
lrom manaqemenL Lowards prevenLion, deLecLion,
investigation and reporting of fraud management.
LisLed in Lhe Lable below are some ol Lhe illusLraLive risk lacLors
or indicaLors lor each ol Lhe condiLions lor lraud Lo exisL.
What protocols do you have in place for investigation if an 7.
incident occurs?
WiLh qrowinq risks and acLs ol lraud, iL is imperaLive lor reLail
companies Lo sLarL askinq Lhe abovemenLioned quesLions and
assess Lhe level ol preparedness lor lqhLinq lraud.
Shift in managements attitude towards fraud
ln Loday's environmenL ol qrowinq cases ol lrauds, LxecuLives
and AudiL CommiLLees are adopLinq proacLive lraud
manaqemenL Lechniques raLher Lhan reacLinq Lo a lraud incidenL
alLer iL happens. 1hese proacLive Lechniques oller answers Lo
Lhe quesLions beinq asked by key sLakeholders and sLrenqLhen
company's lraud preparedness. Some ol Lhe well accepLed
proacLive Lechniques include
Code ol conducL/eLhics
WhisLleblower policy
Fraud risk manaqemenL policy
Fraud risk assessmenL {also know as "lraud vulnerabiliLy
assessmenL")
Fraud conLrols moniLorinq
Fraud riskbased inLernal audiL
Fraud response plan
23 The retailer
Conclusion
"Rapid increase in orqanized reLail and unorqanized local Kirana
sLores, who are ever innovaLive and sLill ellecLive, poses a sLronq
compeLiLion Lo any reLail chain. Aqenda lor any Lop manaqemenL
Loday is cosL reducLion, as every penny saved adds Lo Lhe
boLLom line and creaLes value lor sLakeholders" says Ms. NaviLa
SrikanL, NaLional Leader, Fraud lnvesLiqaLion & DispuLe Services,
LrnsL & Younq. She adds "LllecLive lraud risk manaqemenL
will help manaqemenL Lo idenLily poLenLial leakaqe poinLs and
opportunities to save.
1o prosper, Lhe lndian reLail secLor has Lo deal wiLh Lhe
challenqes beinq laced. ManaqemenL musL implemenL various
sLraLeqies Lo improve core business processes such as loqisLics,
disLribuLion, invenLory and manaqemenL ol poinL ol sale {POS)
daLa. 1o meeL Lhe qualiLy and services desired by consumers,
reLail ma|ors are under serious pressure Lo improve Lheir supply
chain systems and distribution channels.
However, does lraud risk assessmenL leaLure hiqh on your
aqenda? ll noL, by Lacklinq lraud, in all iLs complexiLies, you can
immediaLely see boLLom line savinqs. One ol Lhe mosL common
myLhs abouL lraud is LhaL "Small lrauds aren'L imporLanL
enouqh lor manaqemenL Lo worry abouL." You may noL be Loo
worried abouL a lraud ol Rs. 5000/ per week. BuL whaL abouL a
siLuaLion where Lhis acL qoes on every week lor
three years?
A recenL survey conducLed by lnsLiLuLe ol CerLiled Fraud
Lxaminers revealed LhaL implemenLaLion ol anLilraud conLrols
had a measurable impacL on an orqanizaLion's exposure Lo lraud.
OrqanizaLions LhaL conducLed surprise audiLs sullered a median
loss ol USD70,000, while Lhose LhaL did noL conducL surprise
reviews, had a median loss ol USD207,000.
ReLail companies should be proacLive in idenLilyinq lraud risks,
implementing antifraud programs and controls to minimize the
risk ol lraud, in addiLion Lo Lraininq employees on a reqular basis
to enforce a culture of ethics and integrity.
NaviLa SrikanL heads Lhe Fraud
lnvesLiqaLion & DispuLe Services
pracLice ol LrnsL & Younq in lndia.
She is a charLered accounLanL
wiLh over 16 years ol prolessional
experience and specializes in Fraud
lnvesLiqaLions, Fraud PrevenLion
and DeLecLion enqaqemenLs. She
has been consulting with clients on setting corporate
compliance proqrams and anLilraud proqrams. She has led
several investigations in different sectors in India
and Lurope.
1: +91 22 ^035 6370
L: naviLa.srikanLin.ey.com
2^ The retailer
A toy story Hamleys entry into India
Hamleys, a leadinq Loy reLailer, is an iconic brand in Lhe UK.
lL has Lhe larqesL Loy sLore in Lhe world and is known lor Lhe
experience iL provides Lhrouqh iLs reLail ouLleLs, which are Lhe
ulLimaLe desLinaLion when consumers are lookinq lor Loys and
related products.
The company has a wide and diverse product portfolio including
elecLronics, qadqeLs and qizmos, qames and puzzles, indoor
and ouLdoor acLion, novelLies and solL Loys. Hamleys primarily
operaLes in Lhe UK and is headquarLered in London. 1he
company had been considerinq overseas expansion Lo source
and open new stores.
What was the issue? 1.
Hamleys had been lookinq lor qrowLh opporLuniLies across
markeLs and idenLiled lndia as one such key qeoqraphy.
However, Lhe company had limiLed experience and
knowledqe abouL operaLinq condiLions in lndia, parLicularly
in view ol Lhe unorqanized naLure ol Lhe markeL.
1houqh Hamleys had ouLlined iLs business plan, Lhe
company was lookinq lor specilc answers which would
enable it to adapt this plan to local Indian conditions. It
primarily sought answers to issues such as the demands of
lndian consumers, Lheir spendinq paLLerns, undersLandinq
Lhe MRP concepL, Lhe applicable requlaLions, locaLions Lo seL
up operations and possible players in India to partner with.
ln addiLion Lo Lhese issues, Lhe key quesLion was, "ls Lhe
lndian markeL ready lor Lhe Hamleys experience?"
What was the approach? 2.
LrnsL & Younq was enqaqed by Hamleys Lo develop Lheir
lndia enLry sLraLeqy, which would seek Lo provide Hamleys
wiLh responses Lo iLs quesLions, as well as adapL iLs business
plan Lo lndian markeL condiLions.
LrnsL & Younq locused on
Dehning the Hamleys proposition Through a detailed
currenL sLaLe mappinq ol operaLions, LrnsL & Younq
evaluaLed Lhe proposiLion Hamleys could oller Lhe lndian
markeL. 1his was delned Lo cover aspecLs such as
producL ollerinqs, pricinq levels, reLailinq lormaLs and
service and experience ollerinqs.
Evaluating the need to customize operations Ior Indian
conditions AdopLinq an indusLrybased approach,
LrnsL & Younq qained insiqhLs inLo Lhe currenL and
expecLed luLure Lrends in Lhe Loy indusLry in lndia.
An undersLandinq was obLained on aspecLs such as
requlaLions, wiLh operaLional models beinq used by
players, lor example, manulacLurinq vs. sourcinq, pricinq
levels, reLailinq lormaLs and Lheir overall ollerinqs Lo
customers. These insights were then evaluated to assess
Lhe exLenL ol cusLomizaLion needed Lo be made Lo
Hamleys predelned proposiLion.
Assessing the readiness of the Indian customer for
the Hamleys experience Through detailed interviews
and discussions wiLh selecLed cusLomer seLs across key
markeLs, insiqhLs were obLained abouL Lhe requiremenLs
ol lndian consumers and Lheir purchasinq paLLerns, and
Lhe servicinq qaps in Lhe lndian markeL. 1hese insiqhLs
helped to evaluate the need and readiness of the Indian
consumer lor a Hamleys experience.
Pehning the Hamleys proposition Ior Indian market
conditions Based on inpuLs obLained lrom Lrade and
cusLomer research, Lhe overall Hamleys proposiLion
was relned in line wiLh Lhe lndian markeL. 1his included
lacLors required Lo service Lhe hiqhneed qaps ol Lhe
lndian markeL based on accepLance and willinqness levels
of the Indian consumer.
Evaluating the hnancial Ieasibility oI the proposed
venture 1hrouqh a deLailed lnancial assessmenL, a
series of options were evaluated to measure the impact of
local condiLions and lacLors, lor example, Lhe accepLance
levels by Lhe lndian consumer, requlaLions and Laxes,
loqisLics and inlrasLrucLure, sourcinq arranqemenLs and
MRP impacL on Lhe lndia business plan.
Selecting and evaluating possible partners with whom
Hamleys could establish an alliance for the India venture
Considerinq Lhe Hamleys lndian proposiLion, LrnsL &
Younq scanned Lhe lndian markeL Lo idenLily and evaluaLe
companies Hamleys could consider lor a parLnership.
LrnsL & Younq sLarLed wiLh a comprehensive lisL ol
potential partners and then drew up a shortlist based on
delned parameLers, such as Lheir sLraLeqic and culLural lL
wiLh Hamleys and Lheir experience in Lhe lndian markeL,
especially in Lhe reLail markeL.
Idea labs Ior hnalization oI the Indian strategy CrowLh
opporLuniLies were |oinLly discussed, evaluaLed and
lnalized Lhrouqh a deLailed workshop wiLh Lhe key senior
25
manaqemenL ol Hamleys. 1he impacL ol each ol Lhese
growth options was measured for the India business
plan. AddiLionally, lor each ol Lhe evaluaLed opLions,
LrnsL & Younq assessed Lhe lLmenL ol key parLners l
or Hamleys.
What was the output? 3.
Based on LrnsL & Younq's recommendaLions, Hamleys has
lnalized iLs lndia enLry sLraLeqy and is now lookinq Lo seL
up iLs sLores across key meLros in lndia.
Jaideep CupLa is a senior manaqer
wiLh LrnsL & Younq's Business
Advisory Leam. Jaideep has done
siqnilcanL qrowLh sLraLeqy & enLry
sLraLeqy relaLed work lor a varieLy
ol clienLs across Lhe UK, US, Middle
LasL, lndia and Sinqapore. Jaideep
also assists clients who service
critical elements of the retail industry such as logistics.
1: + 91 22 ^035 6513
L: |aideep.qupLain.ey.com
As Paul Currie, Trading Director, Hamleys comments-
"Hamleys chose Lo qo wiLh a prolessional advisor Lo look
aL Lhe lndian markeL lrom an independenL lnancial view
Lo sense check iLs business model and apply iL Lo Lhe
local markeL and Lhereby Lake inLo accounL aspecLs such
as imporLs, duLies, LaxaLion and loqisLics. LrnsL & Younq
lndia provided qood value in Lhis exercise. 1hey had a
sLronq and skilllul Leam, boLh in Delhi and Mumbai, which
had a qood neLwork ol knowledqe and conLacLs."
The retailer
26 The retailer
27 The retailer
Cur oIhces
Ahmedabad
Shivalik lshan Buildinq
2nd loor Beside Reliance PeLrol Pump
Ambavadi
Ahmedabad 380 015
1el: +91 79 66083800
Fax: +91 79 66083900
Bengaluru
"UB CiLy", Canberra Block
12Lh & 13Lh loor
No.2^, ViLLal Mallya Road
Benqaluru 560 001
1el: +91 80 ^027 5000
Fax: +91 80 2210 6000
Chennai
1PL House, 2nd loor
No 3, CenoLaph Road
Teynampet
Chennai 600 018
1el: +91 ^^ 2^31 1^^0
Fax: +91 ^^ 2^31 1^50
Gurgaon
Coll View CorporaLe 1ower B
Near DLF Coll Course
SecLor ^2
Curqaon 122 002
1el: +91 12^ ^6^ ^000
Fax: +91 12^ ^6^ ^050
Hyderabad
205, 2nd loor
Ashoka Bhoopal Chambers
Sardar PaLel Road
Secunderabad 500 003
1el: +91 ^0 2789 8850
Fax: +91 ^0 2789 8851
Kolkata
22, Camac SLreeL
Block 'C', 3rd loor
KolkaLa 700 016
1el: +91 33 6615 3^00
Fax: +91 33 2281 7750
Mumbai
6Lh loor & 18Lh loor Lxpress 1owers
Nariman PoinL
Mumbai ^00 021
1el: +91 22 6657 9200 {6Lh loor)
+91 22 6665 5000 {18Lh loor)
Fax: +91 22 6630 1222
Jolly Makers Chambers ll
15Lh loor, Nariman PoinL
Mumbai ^00 021
1el : +91 22 67^9 8000
Fax : +91 22 67^9 8200
Jalan Mill Compound
95, CanpaLrao Kadam Marq
Lower Parel, Mumbai ^00 013
1el: +91 22 ^035 6300
Fax: +91 22 ^035 6^00
15Lh Floor, LarnesL House
Nariman PoinL
Mumbai ^00 021, lndia
1el: + 91 22 ^017 5^5^
Fax: + 91 22 ^017 5^00
New Delhi
6Lh loor, H1 House
1820 KasLurba Candhi Marq
New Delhi 110 001
1el: +91 11 ^363 3000
Fax: +91 11 ^363 3200
Pune
C^01, ^Lh loor
Panchshil 1ech Park
Yerwada {Near Don Bosco School)
Pune ^11 006
1el: +91 20 6601 6000
Fax: +91 20 6601 5900
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0076 The retailer.indd (India) 08/11. Artwork by Ritu Sharma.
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