Bharti lines up billions for retail

200 hypermarket and large format stores by 2010.

Unravelling the details of its retail foray for the first time, the Bharti group said it planned to set up 200 hypermarkets and large format stores across the country and invest around $7 billion by 2010.

In addition, the group also expects to earn a revenue of over $1-2 billion from its retail business, which would constitute over 10-20 per cent of the group’s targeted turnover of $10 billion by 2010.

Bharti has entered into a joint venture with Wal-Mart, which will get into the cash and carry business, while the front end business of running the stores will be undertaken by Bharti.

Bharti is also tying up with Axa, its financial services and insurance service partner, to float a realty fund. The group will undertake a mixed strategy in acquiring real estate for its retail foray by leasing space in metros and by buying it in Tier II and Tier III cities.

The group will also launch a programme in which it hopes to rope in existing small retailers to join in as franchisees of Bharti’s retail chain.

The group’s realty company, Bharti Realty, is expected to be a key mover in identifying real estate for its proposed foray.

Though the front end stores will bear the Bharti name, discussions are on about the inclusion of the Wal-Mart brand as well.

Speaking to Business Standard, Sunil Bharti Mittal, chairman of the Bharti group said: “We should have 200 large stores and hundreds of small stores in the first phase. Depending on what we do in real estate and logistics, we will invest around $7 billion by 2010. Our expectation is a topline of $1-2 billion from retail by the same period.”

Mittal also said discussions were on whether the new venture would get into logistics, which included trucking, cold chain trucks, or whether these would be outsourced.

Source : Business Standard