Levemore: Looking forward

Mumbai, Aug. 1: HyperCity Retail (India) Pvt Ltd, part of the K Raheja Corp group, is looking to cast its hypermarket net far and wide.

The company has identified 28 sites where it intends to roll out this retail format. Each centre will have a minimum size of 100,000 square feet.

While an investment of Rs 15 crore will go into each of these stores excluding land, HyperCity is preparing for tomorrow.

Knowing that aggressive rivals like Reliance Retail Ltd will make a big splash in tier II cities over a period of time as the favourite hotspots get saturated, the company has started to foray into these cities.

Andrew Levemore, chief executive officer of HyperCity, told The Telegraph that work is in progress at 14 of the 28 sites and construction has started in several cases.

These centres are located in Mumbai, Bangalore, Hyderabad, Delhi, Lucknow, Jaipur, Aurangabad, Ahmedabad and Pune.

Levemore said HyperCity is also looking at Calcutta, but has not been able to secure a property in the city till date. Although the minimum size of these hypermalls will be 100,000 square feet, it could go up to 160,000 square feet as well.

“In Calcutta, we are considering three options. We are looking to anchor a substantial mall development worth a store of between 120,000 square feet and 160,000 square feet. The second option is a greenfield plot of approximately 4 acres that has very wide road access and can be on the edge of the town or slightly out of town. Either we will buy that land or lease it; so that’s option number three,” he said.

HyperCity has a hypermall situated at Malad in Mumbai. Located over an expanse of 125,000 square feet, some of the product categories available here include food, homeware, homecare & furniture, home entertainment, electronic appliances, sports, stationery and books.

Commenting on the experience of HyperCity in a fiercely competitive market like Mumbai, Levemore said the company has learnt that it is capable of selling a lot more premium products than it initially believed and that the high income consumer is just as value conscious as the lower income.

He said initially the company expected the first store in Mumbai to break even in 12 to 18 months. However, there are clear indications that it will break even long before that. This has come about from higher than anticipated sales of premium products and higher margins.

“We have also learnt that the Indian consumer has a pent-up desire for quality retail outlets,” he added.

After having gained such a positive experience in Mumbai, HyperCity will continue with this format, though there will be distinctive city and regional adjustments in two specific areas that include food & grocery and apparel.

The investments planned by the company for other cities will be financed largely through the K Raheja Corporation , even as a possibility of loan financing is not ruled out.

This will be governed by the speed of expansion and internal cash generation.