Planet M, a part of Videocon Industries-promoted Next Retail will adopt the kiosk model for future expansion of its stores. High mall rentals have forced the retailer to seek smaller formats with the kiosk model gaining prominence.
“The economy may be witnessing a decline but mall rentals are certainly growing. We have shut some of our stores in malls and are now coming back with 100-sq ft kiosks. All our future stores are going to be in the kiosk format with limited categories such as telecom and accessories,” said Sanjay Karwa, CEO, Planet M Retail.
In fact, Planet M has been reducing stores by nearly half since last year. “We had 200 stores which we brought down to 100 last year. These cost cutting measures have improved our profitability and we broke even last year,” added Karwa.
Currently Planet M has 85 stores and intends launching 15 new stores this year in kiosk format.
It has already moved out of malls in places such as Kolkata, Pune, Bangalore and Mumbai. “When the time came from renewals in places such as Inorbit mall in Mumbai, we were asked to pay three times more than the previous rates and simply could not afford it,” he said.
Planet M plans to shrink the size of its 1,000-sq ft stores at the malls and re-launch them in 100-sq ft kiosk format. It has also moved away from prime locations in south Mumbai to distant suburbs such as Powai for its standalone stores.
Like its parent company Next Retail relocating its stores away from the metros, Planet M also tried venturing into tier 2 and 3 towns to avoid high rentals. “We did go into tier 2 and 3 towns but it didn’t click and today we are back to the metros and semi metros,” said Karwa.
The Videocon Group acquired the Planet M music and entertainment stores from Bennett & Coleman nearly four years ago. Initially it dabbled in categories such as music, movies, clothing and mobiles. “With digital downloads, today we have dropped music as a category and are focusing on toys and gaming. But we do stock DVDs and Blue rays as well,” said Karwa.
Besides, new distribution streams such as e-commerce have also been explored in the past. “We did attempt to engage in e-commerce and have been struggling to make a success of this business. We are likely to make another attempt to sell our wares through the company’s Web site in the next few months,” said Karwa.
Source: http://www.thehindubusinessline.com/companies/planet-m-goes-for-kiosk-model-to-beat-high-mall-rentals/article4714860.ece
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