The world that we live in

The Economic Times reports that Delhi’s Indira Gandhi International Airport will be getting a face lift with the Alpha Airports Group Plc and Pantaloon Retail being awarded a contract to set up duty free shops. Alpha plans to bring in international brands such as Armani, Gucci, Christian Dior, Calvin Klein, Nike and Swatch to the airport and offer world class shopping standards. The upgrade would take place by 2010, when the new terminal would also be ready.

Bloomberg reports that Pantaloon will be investing $1 billion to compete with Reliance Retail’s mega rollout and investment. The company will be selling stakes in some of its divisions to raise money to open 4,000 stores by 2010. Reliance will be investing $5.5 billion to set up a chain of supermarkets, hypermarkets, convenience stores and gas stations across the country.

Pantaloon is expecting to reach a turnover of Rs. 300 billion ($6.6 billion) by the year 2011 and increase its retail space to 30 million sq. ft. Reliance plans to reach Rs. 1 trillion in sales by 2011 with 100 million sq ft of retail space. Kishore Biyani, MD of Pantaloon, says “The market is too huge to talk about the competitive element now,” and “We are all going to make the market grow and see that people consume and spend more.”

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The Economic Times reports that Reliance Retail is said to be negotiating with Nestle for a possible tie up in the dairy business. According to sources, Reliance Retail is likely to use its expertise in logistics, procurement and processing the company’s dairy products. In return, Nestle would become a bulk supplier to Reliance, cutting costs of dairy products.

A buyout is also possible in the long run. In Malaysia and Thailand, Nestle has recently divested its dairy business to Fraser & Neave and could repeat it in India. If these talks go through, then the Punjab will likely become Reliance’s hub for dairy business, as Nestle’s plant is located in Moga where 85,000 farmers supply milk.

Boston.com Business reports that Liz Clairborne Inc. announced that it will be buying the Kate Spade handbag brand for $124million from the Neiman Marcus Group.

Neiman Marcus, the closely held luxury retailer, and Kate and Andy Spade had been seeking a buyer for more than a year. This month, Neiman Marcus agreed to acquire the rest of Kate Spade for about $59 million while it continued a search for a buyer. Liz Claiborne has purchased brands including Mexx to increase its number of labels to more than 40.

The Financial Express reports that The Aditya Birla Group has planned its retail rollout at an estimated cost of Rs. 15,000 crore, making it the second largest investment in the retail industry after Reliance Retail’s investment of Rs. 25,000 crore earlier this year. The Birlas plan to start operation by mid 2007, opening 6,000 stores in three years eventually and will be focusing on the food and grocery segment for half of its revenue. Lifestyle segments will account for approximately 22% and the balance will be from all other segments.

The Birla Group plans to set up retail stores in a similar manner to how Reliance is doing, by not entering into any tie-up with a foreign partner, following a carpet-bombing approach to opening stores in a variety of formats such as neighborhood convenience stores, supermarkets and hypermarkets and also on its focus on food and grocery.

Reuters reports that Provogue India Ltd announced that it will be setting up a multi-brand clothing and accessories discount chain store, in an effort to increase revenues and reduce reliance on its Provogue brand. According to plans, revenues from this discount chain and the Prozone mall management development will account for half of the company’s total revenue in approximately three years. The discount chain to be called Promart will be starting in January and will sell excess stock, seconds and lower priced brands at 20-60% less than regular prices.