The development comes as the company is shifting its focus to profitability and margins ahead of its initial public offering (IPO)
Moving away from its earlier strategy of allowing up to two years to assess a new store, Reliance Retail, the retail arm of Reliance Industries, has now directed all the new stores to break even within 6 to 12 months, as per the media reports.
The reports added that failing this, the stores will either be replaced with another retail format or shut down. The development comes as the company is shifting its focus to profitability and margins ahead of its initial public offering (IPO). The plans regarding the IPO will be shared later, as per the reports.
The company is aiming to open 500 to 550 new stores every year, a dip from over 1,000 stores earlier as it is scaling back its strategy of aggressive expansion. The reports highlighted that over 3,600 non-profitable stores were shut down by the company over the last few fiscal years.
With the growing preference among consumers for premium products, the company is enhancing its focus towards premiumisation across grocery and apparel retail. The reports added that the company’s luxury retail operations will continue to operate under Reliance Brands. Highlighting further, the media reports stated that the company is also repositioning its value fashion store, Trends, for younger consumers.
