Aditya Birla takes formal plunge, acquires Trinethra retail chain

The year 2007, for organised retail has begun with a bang. Birlas, who were mulling over their entry in multi format multi brand retail for quite some time, have finally arrived. The Rs. 40,000 crore, Aditya Birla group, through unlisted Aditya Birla Retail, in a single stroke, has acquired a bouquet of over 172 retail stores, operating in southern India, with predominant presence in Andhra Pradesh, under popular brand names of Trinethra and Fabmall. While most of the group stores operate under Trinethra brand, stores located in Karnataka and Kerala operate under Fabmall brand, although, 50,000 sq. ft. big hypermarket in Mysore is known as Fabcity.

While, 83 Trinethra stores are located in Andhra Pradesh, 26 stores are located in Bangaluru and 15 are located in Chennai. Trinethra, prior to this acquisition, was aggressively pursuing its plan to set up new stores in tier II cities such as Mysore, Coimbatore and Tirupur in southern region of the country. Trinethra, which has adopted convenience and supermarket formats, is focused on selling food and groceries in residential areas, although some of the stores also offer pharmaceutical products. Trinethra also offers value-added services like forex remittances and bill payments. A typical Trinethra store ad measures around 2,500 sq.ft. in retail space. The chain of stores are serviced by an infrastructure of central warehouses in Andhra, Karnataka, Tamilnadu and Kerala, with a space of about 50,000 sq ft each

The two decades old, Rs. 250 crore, 2,500 employees strong, Hyderabad based, Trinethra group, originally founded by Mr Anjaneyulu Kakkera, is presently owned by India Venture Fund.

“This acquisition marks the entry of our group into retail and shows its long-term commitment to the business,” said Aditya Birla to an interviewer. It is believed that the Birla group is considering to invest Rs 6,000 crore in the initial phase, which depending on growth requirements could be ramped up further.

Although, organised retail constitutes only 3% of the estimated $320 billion retail market, it is growing at fast pace of 30% per annum. The growth according to industry experts, as reported many times earlier, is going to be driven by hyper and supermarkets. Aditya Birla Retail, is headed by its CFO Sumant Sinha.

Source : IndiaRetailBiz