Business - India;Branded distribution centres on Biyani's radar

Smita Joshi,Mona Mehta

Kishore Biyani-promoted Future Group is all set to create a separate base of standalone branded distribution centres for Future Brands in 2009-10.

Damodar Mall, group consumer director, Future Group, said, "This is to support the group's plans to create strong Indian brands within Future Brands, across categories like FMCG, consumer durables and apparels. We will also launch new brands in segments such as sportswear, lingerie and beauty products."

The group is aiming revenues of Rs 10,000 crore by 2012 from consumer brands alone, he informed.

The launch stand alone branded distribution centres will enable the group to further improve its margins, said Kishore Biyani, CEO, Future Group.

Santosh Desai, MD and CEO, Future Brands, said, "New branded products will be followed by new alliances in the near future. Some tie-ups are already in place, with top manufacturers such as Cargil and Dynamix, for the planned expansion."

Among the group's consumer brands, Tasty Treat, RIG and Koryo will see a lot of rationalization, Desai informed.

Meanwhile, the group's new initiatives in businesses other than retail, such as wedding finance, capital, insurance, and leisure and entertainment, are understood to have taken a hit due to the economic downturn.

"The group is able to keep itself afloat during this tough phase only through its retail business," said an analyst, on condition of anonymity.

It was earlier reported that Future Group was targeting a turnover of Rs 30,000 crore by 2010, from a Rs 4,000 crore level. Analysts and market watchers had raised concerns, saying that the retail king was moving too fast, and things could turn dicey.

That's precisely what seems to have happened. The wedding finance business, which the group was contemplating an entry into in October 2007, has still not taken off. "We may start the venture in the near future, once we achieve objectives set for Future Brands to create strong Indian brands in various categories and enhance consumption levels," Biyani told FE.

The group is also going slow on its capital holdings business. "We can neither deny nor confirm the impact of the economic turmoil on Future Capital Holdings," said Biyani.

M Shridhar, CEO, Future Capital Holdings, said, "Most companies into insurance and investment advisory businesses have taken a hit and we are no different, as we are currently going slow in launching new funds."

Incidentally, Future Capital Holdings Ltd's standalone income grew 483% for the quarter ended June 2008. It was at Rs 19.34 crore, up from Rs 3.32 crore in the year-ago period.