Reebok India to open 100 fit-hub stores by early 2014

Putting behind the 211 million euro hit due to alleged fraud at its arm Reebok India, Adidas group is now focusing on growing the brand with plans to open 100 'fit-hub' stores by early 2014 that will account for a major portion of Reebok's such new concept outlets worldwide.

This year alone, Reebok India will open 50 'fit-hub' stores in India which will be more than half of the 80 such outlets that the sportswear brand has at present globally, mostly in US, Australia, Korea and Russia.

"What happened in the past is behind us. We are now growth-focused and we will start with our new retail format of 'fit hub' stores in India," Adidas Group India Managing Director Eric Haskell told PTI.

The Reebok fit-hub stores offer fitness and training products besides advice, guidance and information on community based fitness events.

"This year 50 fit hub stores will be opened. The plan is to open 100 such stores by first quarter of 2014," Haskell said, adding out of the 100 stores, 50 will be new and the remaining half will be renovated ones.

Most of the fit-hub stores would come up in metro cities but few new stores would also be located in tier-II cities, he added.

The company plans to convert all the existing 490 Reebok stores in India to fit-hub stores in next couple of years. "It should not take longer than two to three years," Haskell said.

Stressing on the significance of the Indian market, he said: "By opening 100 fit hub stores in India, we are making pretty substantial statement and it also shows about our commitment to the market here. Our focus is now on business. We remain committed about Reebok brand in India."

When asked if the government's FDI policy in retail would encourage the company to go on its own in India, Haskell said Reebok India will continue with franchisee model in the near future.

"It is something we would consider..We would look at doing own retail (setting own stores) but it is not my priority. Right now we are very happy with the franchisee business," Haskell added.

Fiesta's Pollo Tropical Now in India

Florida-based Fiesta Restaurant Group, Inc. 's ( FRGI ) subsidiary Pollo Tropical, which mainly serves Caribbean foods, has finally unveiled its first franchised outlet in Delhi, the capital of India. The latest opening came in the wake of the signing of a development agreement with franchisee, Paramount Cuisines Pvt. Ltd, a subsidiary of the Paramount Group in Aug 2012.
The restaurant is strategically positioned in the popular shopping mall, DLF Place, Saket. We believe that Delhi is a strategic fit for entering the country as it is home to the country's many government organizations, IT firms, well-known universities and research institutes. With more than 50 shopping malls already in action and dozens under construction, Delhi remains one of the vital locations in India.
Delhi-based Paramount Cuisines will unveil nine more Pollo Tropical outlets in India by 2016. The restaurants will be located in Northern India, comprising several important locations like National Capital Region, Chandigarh, Punjab and Haryana.
Both Pollo Tropical and Paramount believe that its chicken options will appeal to Indian taste buds. Additionally, the restaurateur's already-strong vegetarian offerings can successfully cater to the huge vegetarian population of India.
According to a report by the U.S. Commercial Service, the middle-income population in India is burgeoning and will grow tenfold by 2025. The growth in the income of the larger populace also makes India a lucrative investment proposition. Furthermore, the report reveals that Delhi is expected to be one of the world's largest metropolises by 2025 following the rapid urbanization.
Hence, these openings reflect the Zacks Rank #2 (Buy) company's intent to make India one of the prime markets for international expansion. The strategy is likely to be successful because of the growing economy and under-penetration of quick-service restaurants as compared with saturated North American countries.
However, following the growing demand for American dining brands in India, other restaurateurs like Yum! Brands Inc. ( YUM ), Domino's Pizza, Inc. ( DPZ ) and McDonald's Inc. ( MCD ) are also making their presence felt in the country.

Ice cream brands target India

NEW DELHI: India's domestic ice cream manufacturers and international brands are increasing their range of products and flavours to meet growing demand for in-home consumption, which has been rising at a rate of 25-30% annually.

Traditionally, the Indian market has focused on 'out of home' products, but improved cold chain distribution, increasing affluence plus greater availability of domestic cold storage is influencing behaviour.

Penetration of refrigerators in urban India rose to 41% in 2012 from 32.9% in 2009 while in-home consumption of frozen desserts has been rising 25-30% year-on-year compared with 20% for out-of-home varieties.

Devyani Food Industries, the New Delhi-based manufacturer which owns the Cream Bell brand, says its in-home share has risen 16% from 10% four years ago and expects consumption of larger pack sizes to grow over the next decade.

Meanwhile, the Amul brand, made by the Gujarat Cooperative Milk Marketing Federation, has seen sales of its take-home packs increase to 50% from 30% a few years ago and has launched a dozen new products in family pack sizes.

International brands have not been slow to boost their presence in the growing market. Magnum, Unilever's biggest ice cream brand, entered the market a few weeks ago while Ben & Jerry – another Unilever brand – is expected to enter soon.

US-based Mini Melts recently established a facility in Bangalore in a franchising deal with Honeybee Amusements, whose managing director, Shoeab Salim, predicts will obtain 12% market share within three years.

Häagen-Dazs recently opened a flagship store in Chandigarh in northern India while other international premium brands, such as Baskin-Robbins and London Dairy, have begun to expand.

 The Indian ice cream market is growing at the rate of 35% year-on-year and hence makes for an attractive destination for international brands. The challenge, however, lies in right pricing and cracking the distribution code.
Growing involvement by international brands is also influencing their domestic competitors, which recognise the appeal of the premium market. Devanshu Gandhi, managing director of Gujarat-based Vadilal, said: "Earlier, our share in the high-end ice cream market was almost negligible. This year we expect our premium products portfolio to generate $9m in revenues."

Data sourced from Livemint

Govt nixes franchise route for multi-brand retail stores

Global retail giants entering India will not be able to use the franchise route to set up shop. Providing clarity to global retail giants such as Tesco, Carrefour, Walmart on investment norms in multi-brand retail, the Commerce and Industry Ministry today said the “front-end stores set up by the multi-brand retailers will have to be company-owned and -operated.

The mandatory 30 per cent sourcing from small industries will be counted only for sales through the front-end stores. Retailers will also have to compulsorily put 50 per cent of their investments in back-end infrastructure specifically for the chain they are setting up.

The clarifications come nine months after the investment policy was announced. Despite allowing 51 per cent foreign direct investment in multi-brand retail trading, few players had come forward to invest in the sector, given the lack of clarity on investments. Several retailers had sought clarification especially on the clause on 30 per cent sourcing from small and medium enterprises.

Clarifying, an official release from Department of Industrial Policy and Promotion said: “As such, a multi-brand retailing entity cannot engage in any other form of distribution.”