Max, the largest value fashion retailer in t he Middle East offers fashion clothing, footwear , accessories and household products at amazing value, all under one roof. Launched in UAE in May 2004, Max is today t he largest value fashion retail chain in the Middle East. Max caters to the mid market section of the pop ulation. With 114 stores across UAE, KSA, Jordan, Kuwait, Bahrain, Qatar, Oman, Turkey, Egypt, Yemen & India, MAX plans to e xpand its network in more potential markets within t he Middle East & beyond. With stores t hat typically measures between 18,000 to 30,000 sq. ft., Max reta ils private label clothing for men, women and children as well a s footwear and home. A good shopping experience w ith fashionable products at great value is an a ssurance that translates into making customers "Look good, Feel good" with Max.
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Year of Inception - 2004
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Origin - UAE
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Stores - 114
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Retail
Space2.15 million sq. ft. In India stores are located in the fo llowing cities:1.
Agra-1
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Ahemadabad-1
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Bangalore-4
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Calicut-1
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NCR-3
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Hyderabad-2
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Indore-1
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Lucknow-1
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Mumbai-4
Vision To create a truly global brand that provide s growth oppurtunites for the company and its e mployees whilist achieving its goals of brcoming the number one fashion reta iler across middle east and india. OUR MISSION STATEMENT y
Be a market leader in the field of value retailing.
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Provide
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Be innovative, cost effective and globally competitive.
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Exceed our customer expectations.
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Provide
fashionable product at affordable prices.
opportunities of growth for our employees.
Our core values y
Constant focus on the development of the product and the value offered.
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Continuous improvement of the customers shopping experience.
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Commitment towards staff, training and development.
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Encouraging open work culture.
CEO·s MESSAGE: At MAX we strive t o bring you the most dynamic offer of value fashion and merchandising, designed inhouse and manufactured in house to stringent quality standard s. While our fashion collection reflects the latest international trends , we a lso believe in offering our customers a great variety to choose from and a holistic shopping experience . Our merchandising is regularly updat ed to ensure that we a lways delight our customers with fresh and new offering adding vibrancy to the store. Our sales advisors and visual merchandising team ensures that every MAX store represents t he spirit of our brand promise ¶Look Good Feel Good·.
Customer Service: Items are returnable: y
With sales recipt within 14 days
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Bar code is still on
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In a condition deemed fit for resale
Alterations y
Free clothing alteration for all clothes at all stores.
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Go green shopping bags ² Jute -100% bio degradable, recyclable and 100 % eco frie ndly.
CSR
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Middle East retail chain Max, part of $ 3.8 Billion Landmark group, is expanding its footprints across the country, especially in the south, which accounts for maximum revenue. Max, the group¶s fashion brand, expects revenue from Indian operations to double to breach the Rs 400 crore mark by March 2011. Using "pocket-friendly prices" as its USP, the Rs 188crore Max is offering apparel for family in a price band of Rs 199 to Rs 599. Max stepped into Chennai through franchising route by launching its 27th store at Mylapore on Tuesday. In the past three years since it made its India foray, the retail chain has been operatings stores that span an area of 2.8 lakh sq ft. "This year, we plan to double the space by establishing more stores," Max ED Vasanth Kumar said. On the delay in entering the metro, he said malls that were delayed are now back in operations. These, along with standalone stores and partnered (franchised) outlets, would support the expansion plans of Max. In Chennai, it will be opening a 20,000 sq ft outlet in the Express Avenue Mall and a similar store in hi-street Anna Nagar. "Partners are ready to open for us and real estate market too have softened. Instead of rentals, we are entering into profit-sharing models with our lease owners," he said. Together with merchandising, a single store calls for an investment of Rs 5 crore. Max has 16 outlets operating in the metros while the rest are located in the tier II towns. It plans to take its total store count to 53 by March 2011, by which time it is targeting a turnover of Rs 430 crore.
Mr Kumar said the retail chain¶s growth is linked to the IT and ITES sector. The group¶s operations through Max, Lifestyle (catering to premium customers), Spar (hyper market) and Gloria (coffee chain), generate Rs 1,300 crore revenue in India. The group is targeting a growth of 25% this year. Incidentally, Max gets one-fourth of its revenue from children wear, he said, noting that it is the only retail chain to thrive on in-house designs, which are sourced from Dubai. It has 120 vendors across India. Max has an average billing of Rs 1,000. firm¶s primary target: the modern woman aged 22-35 years .
³Nearly 80 per cent of our products are priced between Rs 199 and Rs 599. Research has shown us that this is the price point middle-class buyers perceive as value . While our competitors such as Pantaloon¶s and Westside will also have products in this range, we feel our product mix is better,´ said Vasanth Kumar, executive director, Max Retail (India). ³In each of our stores across 15 countries including India, we have striven to maintain a product ratio of 20 per cent ethnic, 20 per cent western, 20 per cent children¶s wear, 25 per cent men¶s wear and 15 per cent footwear,´ said Kumar. All products in stores carry Ma x¶s label of merchandise. Apart from women, typically housewives, Max Retail has its eyes on a secondary target ² the youth aged 1622 years. ³The price points appeal to them as they can make purchases from their pocket money. The youth segment among our consu mers, especially in metros, provides high footfalls as well as conversions, ´ said C
S Shekar, senior VP (operations), Max Retail. While
factory outlets are also perceived to offer µvalue¶ to consumers, Max Retail feels factory outlets have inherent disadvantages such as fashion lines and improper sizes which are not customised to the needs of the value-buyers.
³The mid-market segme nt in the Indian retail sector contributes more than 50 per cent of the total market. Premium and luxury are ve ry small segments and by definition cannot be volume games. That is why we beli eve that while Indian tur nover accounts for around 9-10 per cent of Max Retail¶s overall revenue, in the next 3-4 years we can touch 15-18 per cent share from Indian operations alone, ´ said Kumar during the launch of its first store in Kolkata. For Max Retail, the evolving nature of retail and real estate segments has meant that new stores are being opened with rental as well as revenue sharing models. ³Out of the 20 stores that we will open in the next 12 months, around 8-10 will have the hybrid m odel,´ said Kumar. More and more retail companies are offering to pay the mall owners a minimal rental along with a negotiable share of the revenues in the initial years.
www.docstoc.com/docs/27855034/Spar-Hypermarket-Vs-Big-Bazaar
SPAR, the Dutch food retail franchise, is back for a second innings in India. After a failed tieup with Radhakrishna Foodland in Mumbai nearly two years ago, it has entered into a new franchising agreement with the Dubai-based Landmark Group for its Max hypermarkets and supermarkets. Under the agreement, not only with Landmark get access to the brand name, SPAR will also handle the entire merchandising and display for the chain. The first two stores carrying the SPAR brand name, expected to be about 70,000 to 1,00,000 sq ft, will come up in Bangalore next month. The Euro 27 bn SPAR is an international retail franchise spread over 13,700 stores in 33 countries. SPAR operates on a principle similar to co-operative stores, bringing together many retailers under a single fold to facilitate bigger discounts on bulk deals and better supply chain management. This time around, SPAR isn¶t focusing on buying for the traditional trade, but concentrating only on modern organised retail. The agreement with Max envisages building a chain of 9 hypermarkets and supermarkets over the next two years. In a statement, SPAR International MD Gordon Campbell said, ³This is an exciting and important development for us. Developing SPAR hypermarkets in India is a key element in our strategic plan. India is a market with enormous potential and we are pleased to have found an excellent partner in Max Hypermarkets.´
According to the license agreement, the Landmark group will handle the back-end and front-end. The license, which was inked couple of days ago, spans across India. Based on a rental model the hypermarkets will be typically spread across 70-1,00,000 sq feet while the supermarkets will be in the area of 20-30,000 sq feet. With an initial outlay of Rs 200 crore, the group is targeting a revenue of Rs 600 crore in the next two years. Landmark will pay SPAR an annual franchisee fee based on a quarterly basis depending on various criterion. Currently, even though they hold the licence for food and grocery branding, the Landmark group will begin by using their private label MAX. ³Since we had been working on the private label for a while to start with it might be branded Max but slowly we will get the SPAR brand into the private labels as well,´ said Viney Singh, MD of Max Hypermarkets. Right now, Max will kick off with its food and apparel private label but later get into durables, home appliances and general merchandise. In its previous foray, SPAR had been unable to garner support from traditional retailers because many of them feared they would end by losing their independence. They had been promised the use of the SPAR brand name and the benefits of centralised buying. Said Damodar Mall, chief executive (innovation and incubation) of Future Group, ³In an environment where modern trade is still growing and consumption is rising by 8-9%, the traditional retailers aren¶t threatened to the same extent as more developed retail markets.´
Spar is the world's largest independent food re tail chain present with 13,785 stores present in 37 countries. The company, headquartered in Amsterdam, was established in 1932 and has annual revenue of USD 42 billion. Spar Hypermarkets and supermarkets in India is the result of a license agreement between the Landmark Group's Max Hypermarkets India Pvt. Ltd. and Spar International. Spar currently has three stores in Bangalore and one each in Hyderabad and Mangalore. Shoppers have the option to choose from a wide variety of quality products in categories ranging from groce ry, fruit and vegetables, bakery, dairy, take away foods, meat, poultry and fish, wine, beer and spirits, home textiles, personal care, crockery, utensils and kitchen appliances, electronics and IT accessories and more. Spar offers the freshest quality, widest choice, best value and personalized, friendly service packaged to create a truly enjoyable shopping experience. Spar's brand promise "Live Life Better" epitomizes this y
philosophy. Year of Inception - 2007
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Stores - 5
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Retail
Space253,000 sq. ft.
Max Retail offers apparel for the complete family ± women, men and children ± besides footwear, accessories and home furnishings. The merchandise is fashionable & competitively priced in the range of Rs. 99 to Rs. 599, making it quite
affordable. The store ambience offers global shopping experience with imported fixtures and customer friendly layouts.
Max- a division of Lifestyle International (P) Ltd & a part of the Dubai based Landmark Group was launched in early 2004 in the Middle East. Over the past 5 years it has grown to become the largest value fashion chain in the region. It currently has over 115 stores across the Middle East, Egypt, India, Turkey, Yemen and Palestine. In India, Max has 38 stores across 19 cities covering all metros & tier 2 cities. It has extensive plans to double the stores to 56 stores by 2010-11. MAX has pioneered the concept of 'value fashion retailing' in the India thereby offering the value conscious customer a choice of variety without compromising on the quality. It offers merchandise which is fashionable & predominantly priced in the range of Rs. 199 to Rs. 599, making it quite affordable. Max sources its merchandise both from India as well as overseas thereby offering contemporary styles inspired by the latest fashion trends across the globe. As head of Max's India operations, Vasanth is currently spearheading the brand's aggressive growth plans in India. Vasanth has an illustrious marketing career spanning 20 years, his rich and diverse career includes-Marketing, Sales and Retail Management in the Apparel, FMCG and Consumer Durable industries in India. He has also been a key player in successfully launching one of the largest selling Apparel Brands in the Value segment during his stint with MAX. In a tête-ê -tête with Sourcing Business Unit of fibre2fashion, he illustrates the Sourcing & Allied functions of MAX.
Fibre2fashion
: With a sole aim of Value Fashion for everyone, MAX has grown to around 100 stores all across Middle East, Turkey, Egypt & India. We congratulate you on your success. What has been your success recipe for merchandise mix exhibited at your stores? Vasanth Kumar : Our focus has been association with contemporary young families & youth being our primary target, we look at serving customers within the age group of 18-35.
We have all major categories to offer our customers including- Men¶s Wear, Women¶s Western Wear, Ethnic Wear, Kid¶s Wear, Accessories & Footwear.
Fibre2fashion
: How is the global cotton situation affecting buying this season? How has MAX altered its strategy not to allow shrinkage in product basket? Vasanth Kumar : The cotton price is indeed impacting our sourcing of products. Being leading value fashion player in India, it is imperative that the customer interests are protected during these times. Thankfully Max India is expanding well, with over 60 stores by Summer µ11. This has helped in cushioning this impact through both product development as well as increased volume purchase (100% increase over last year) so that the impact to the customer is marginal.
Fibre2fashion
: MAX Stores are as huge as 30,000 square feet. How does MAX plan Accessory category for capturing the customer? What are basic criteria for zeroing on Accessories Suppliers? Vasanth Kumar : Accessories as a category should coordinate with the styles & fashion available in the other apparel categories to complement the whole style statement of the customer. We source through global suppliers who already deal with International Fashion. Also Styles relevant to the Indian market are included, along with MAX across 11 countries including India. These vendors are aware of international trends & will be able to translate the design inputs given by us.
Fibre2fashion
: Customer service gaffes, if not nightmares in the modern retail scenario. Why do so many of our associates seem clueless about their products or customer service? How does MAX deal with such ordeals? Vasanth Kumar : As a process, new employees are inducted within 15 days from on boarding across group companies (Lifestyle & MAX) through rigorous OJT (On the Job Training) process the MGD (Meet, Greet, Direct the customer) concept is driven across lines. Career progression process is being initiated for deployment of P S P concept( People Service Profits)
GENERAL INFORMATION ON RETAIL
The BMI India Retail Report for the third-quarter of 2010, forecasts that the total retail sales will grow from US$ 353 billion in 2010 to US$ 543.2 billion by 2014. With the expanding middle and upper class consumer base, there will also be opportunities in India's tier II and III cities. The greater availability of personal credit and a growing vehicle population to improve mobility also contribute to a trend towards annual retail sales growth of 11.4 per cent. Mass grocery retail (MGR) sales in India are forecast to undergo enormous growth over the forecast period. BMI further predicts that sales through MGR outlets will increase by 154 per cent to reach US$ 15.29 billion by 2014. This is a consequence of India's dramatic, rapid shift from small independent retailers to large, modern outlets. BMI forecasts consumer electronic sales at US$ 29.86 billion in 2010, with over the counter (OTC) pharmaceutical sales at US$ 3.28 billion. The latter is predicted to be the fastest growing retail sub-sector and BMI forecasts that sales will reach US$ 6.18 billion by 2014, an increase of 88.5 per cent. China and India are predicted to account for almost 91 per cent of regional retail sales in 2010 and by 2014 their share of the regional market is expected to be more than 92 per cent. Growth in regional retail sales for 2010-2014 is estimated by BMI at 72.2 per cent, an annual average of 14 per cent. India should experience the most rapid rate of growth in the region, followed by China. For India, its forecast market share of 13.9 per cent in 2010 is expected to increase to 14.3 per cent by 2014. Moreover, for the 4th time in five years, India has been ranked as the most attractive nation for retail investment among 30 emerging markets by the US-based global management consulting firm, A T Kearney in its 8th annual Global Retail Development Index (GRDI) 2009. India remains among the leaders in the 2010 GRDI and presents major retail opportunities. India's retail market is expected to be worth about US$ 410 billion, with 5 per cent of sales through organised retail, meaning that the opportunity in India remains immense. Retail should continue to grow rapidly²up to US$ 535 billion in 2013, with 10 per cent coming from organised retail, reflecting a fast-growing middle class, demanding higher quality shopping environments and stronger brands, the report added. Bharti Retail strengthened its position in northern India by opening 59 stores, Bharti Wal-Mart is expected to open 10 to 15 wholesale locations in the next three years, and Marks & Spencer is considering plans to open additional outlets in the next few years. Established retailers are tapping into the growing retail market by introducing innovative store formats. Spencer's Retail, More (owned by Aditya Birla Group) and Shoppers Stop (owned by K Raheja Group) already plan to expand. According to a McKinsey & Company report titled 'The Great Indian Bazaar: Organised Retail Comes of Age in India', organised retail in India is expected to increase from 5 per cent of the total market in 2008 to 14 - 18 per cent of the total retail market and reach US$ 450 billion by 2015. Furthermore, according to a report titled 'India Organised Retail Market 2010', published by Knight Frank India in May 2010 during 2010-12, around 55 million square feet (sq ft) of retail space will be ready in Mumbai, national capital region (NCR), Bengaluru, Kolkata, Chennai, Hyderabad and Pune. Besides, between 2010 and 2012, the organised retail real estate stock will grow from the existing 41 million sq ft to 95 million sq ft. India continues to be among the most attractive countries for global retailers. Foreign direct investment (FDI) inflows between
April 2000 and April 2010, in single-brand retail trading, stood at US$ 194.69 million, according to the Department of Industrial Policy and Promotion (DIPP). y
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Leading watchmaker Titan Industries Limited plans to invest about US$ 21.83 million for opening 50 premium watch outlets Helios in next five years to attain a sales target of US$ 87.31 million. "We are looking to open Helios outlets in Mumbai, Delhi, Hyderabad, Kolkata, Chennai, Pune, Ahmedabad etc in next 12 months," said Ajoy Chawla, Vice President (Retail), Titan. British high street retailer, Marks and Spencer (M&S) plans to significantly increase its retail presence in India, targetting 50 stores in the next three years. M&S currently operates 17 stores in India through a joint venture (JV) with Reliance Retail. Chinese retail major, Yishion has entered the Indian market and plans to have at least 125 points of sales, including exclusive stores and multi-brand outlets, across India by 2012. It will open its first exclusive store in New Delhi by September 2010. Spain's Inditex, Europe's largest clothing retailer opened the first store of its flagship Zara brand in India in June 2010. It further plans to open a total of five Zara outlets in India. Bharti Retail, owner of Easy Day store²supermarkets and hypermarts²plans to invest about US$ 2.5 billion over the next five years to add about 10 million sq ft of retail space in the country by then, according to a company spokesperson. Raymond Weil plans to invest US$ 883,665 in India during 2010, according to Olivier Bernheim, President and CEO, Raymond Weil.
Policy Initiatives
FDI up to 51 per cent under the Government route is allowed in retail trade of Single Brand products, according to the Consolidated FDI Policy document. Road Ahead
According to industry experts, the next phase of growth is expected to come from rural markets. According to a market research report published in June 2008 by RNCOS titled, 'Booming Retail Sector in India', organised retail market in India is expected to reach US$ 50 billion by 2011. The key findings of the report are: y y
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Number of shopping malls is expected to increase at a CAGR of more than 18.9 per cent from 2007 to 2015 Rural market is projected to dominate the retail industry landscape in India by 2012 with total market share of above 50 per cent Driven by the expanding retail market, the third party logistics market is forecasted to reach US$ 20 billion by 2011 Apparel, along with food and grocery, will lead organised retailing in India
Exchange rate used: 1 USD = 45.81 INR (as on June 2010)
Organised
retail in India, today holds only a fraction (6%) of the market share potential
in India. It has risen from ZERO to 6% in a very short period mainly on Volumes and not a value-driven growth. The Bazaar shopping concept has retained its identity and character while the modern-day shopping structures represent an inspired fusion of main street shopping along with community centric activity. Today we are re-visting the Origin
and History of Organized retailing in India.
The emergence of organised retail in India dates back to the pre-independence era when the country¶s established business houses, mostly textile majors, ventured into
the retail arena through company-owned or franchisee outlets. There were also exclusive tailoring shops, that ultimately expanded their span of operations to become leading regional fashion retailers - Mumbai¶s Charagh Din, Kolkata¶s Burlington, Delhi¶s Mohanlal Sons and Bangalore¶s PN Rao, to name a few. It is worth a mention that southern India took the lead to establish the first organized retail chains in the food and grocery (F&G) segment in India, with stores such as Nilgiri¶s, Foodworld, Margin Free, etc. The consumer durables segment too has its r oots in the south with regional players likeViveks, Giria¶s, Pai International, etc.India's first 500,000 sq.ft. shopping centre from Mangal Tirth Estate called Spencer Plaza, came up in Chennai in 1990. Classification of Retail Evolution in India
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Initiation - Pre 1990s
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Conceptualization - 1990 - 2005
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Retail Expansion - 2005 through 2010
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Consolidation and Growth - 2010 onwards
Retail Initiation - This phase was essentially dominated by manufacturers establishing their presence in retail. Bombay Dyeing, the Raymond Group, the S Kumars Group and Bata to name a few. Government initiatives were - Mother Dairy, Kendriya Bhandar, Super Bazaar, etc Foodworld, was the first national retail chain from the RPG Group in the Super Market segment. Retail Conceptualization - This time around it was not the manufacturer looking for an alternative sales channel, but pure-play retailers who entered the retail market, to expand pan-India, for instance Pantaloons, Shoppers¶ Stop and Lifestyle. The first generation of international brands to make an Indian entry during this phase included McDonald¶s, Benetton, Levi Strauss, VF Corporation, Adidas, Reebok and Nike, to name a few.
Retail Expansion - This is perhaps the most active phase of the Indian retail in dustry in terms of growth, entry of new players and development of new formats. With virtually unlimited potential on desk, Reliance, Tata, Aditya Birla and Mahindras entered the bandwagon. Their success brought in global retailers such as Metro AG, Max Retail, Shoprite, Hypercity, etc and more recently Carrefour, Tesco and Zara that announced their India entry and are optimistic about their growth in this market. Bharti-Walmart is a noticeable JV that entered in this phase. During this phase, a new concept in Retail Real Estate emerged - Minimum guarantee and revenue sharing models. The rapid growth soon attracted the luxury product segment - With the FDI policy 2005-2006 allowing single-brand foreign retailers to take up to 51% stake in a joint venture with a local firm, the intervening years saw the entry of several premium brands (Giorgio Armani, Versace, Gucci, etc.) mostly through joint ventures. Retail Consolidation and Growth - We are currently in this phase. The organised retail sector witnessed an 11% decline in sales in 2008. Considering the challenges faced by the industry at present, retail chains are likely to focus on consolidations to cut costs and survive in the market.
