![](\"..\/images\/spacer.gif\"){kind=spacer}
By Raghavendra Kamath <\/i> <\/p>\n By Raghavendra Kamath <\/i> <\/p>\n
Business Standard<\/i> <\/p>\n
Mumbai June 16, 2009<\/i> <\/p>\n
Speciality homeware retail chains, such as Kishore Biyani’s HomeTown, Landmark group’s Max Retail and Wadhawan group’s Home Store, have changed tack as home sales drop and shoppers defer buying big-ticket items like furniture and furnishing to save cash in the downturn.<\/p>\n
The realty sector has seen home sales fall by up to 70 per cent in the early part of this calendar year from the peak in 2007-08 and developers have shifted to smaller, affordable homes to counter the drop in sales.
\n Consequently, retailers are witnessing a drop in sales, too.<\/p>\n
Pantaloon Retail, the country’s largest listed retailer, has seen a continuous slide in same-store sales in its home retailing segment in the last seven months. From a steep fall of 36 per cent in November 2008, Pantaloon has seen further drops, ranging from 4 per cent to 28 per cent, in home retailing from January-May 2009.<\/p>\n
To counter the slowing sales, retailers have adopted strategies to prop sales and cut losses. For instance, HomeTown has increased its offering in the value segment and launched furniture and bedroom sets in the Rs 10,000-15,000 category to boost sales.<\/p>\n
HomeTown is also planning a shopping event called ‘Home Carnival’ soon .
\n "Home retailing was in doldrums in the end 4-6 months of 2008. People were not buying new homes and that was impacting home retailing," said Mahesh Shah, chief executive of HomeTown, a part of Pantaloon Retail.<\/p>\n
Max Retail, a part of the Dubai-based Landmark group, has removed the home category from its stores altogether, while others like the Mumbai-based Wadhawan group – which acquired Home Store, a chain selling homeware items earlier – is not expanding its half-a-dozen stores to conserve cash.<\/p>\n
Max is also reducing its store size to 10,000 sq ft from 14,000 sq ft to optimise costs. The home category used to occupy 6 per cent of its space, while contributing 10 per cent of its revenues.<\/p>\n
After a lackluster performance in the last six months, homeware retailers believe things have changed in the last two-three weeks with the sales of affordable homes picking up.<\/p>\n
"Sales have picked up since last month. We are expecting 5-6 per cent growth from next month onwards," said Shah of HomeTown, which is planning to open four stores in Mumbai, Bangalore and Kolkata in the coming months.<\/p>\n
According to estimates, the overall home retail market in the country is over Rs 50,000 crore in size, with organised retail segment accounting for just 10 per cent of that. Local carpenters and small furniture shops cater to most homeware needs.<\/p>\n
"There is a lot of competition from unorganised players and it is difficult to make an impact here," said Vasanth Kumar, executive director of Max Retail.<\/p>\n
Analysts say retailers prefer those categories which require less working capital and shorter inventory levels to beat a downturn. The home segment is considered as a high-inventory and capital-intensive segment. Food and grocery requires an inventory of 15-30 days, furniture and furnishings require inventories of 4-6 months.<\/p>\n
"Besides a large inventory of goods, the home segment requires large space to showcase items. In the current financial scenario, retailers are looking at those segments which have a better sales-to-stock ratio," said Devangshu Dutta, chief executive of Third Eyesight, a retail consultancy.<\/strong><\/p>\n International retail consultancy AT Kearney’s Debashish Mukherjee feels organised home retailing is yet to make a dent in the country.<\/p>\n "The average number of rooms per family and average square feet per person in India is very low. Since most of the furniture is imported, people do not have space for that. Besides, since the chains sell furniture made out of composite materials, Indian consumers are yet to move from wood to new materials," Mukherjee said.<\/p>\n\n","protected":false},"excerpt":{"rendered":" By Raghavendra Kamath Business Standard Mumbai June 16, 2009 Speciality homeware retail chains, such as Kishore Biyani’s HomeTown, Landmark group’s Max Retail and Wadhawan group’s Home Store, have changed tack as home sales drop and shoppers defer buying big-ticket items like furniture and furnishing to save cash in the downturn. The realty sector has seen […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-2733","post","type-post","status-publish","format-standard","hentry","category-press-quotes"],"yoast_head":"\n