Reliance buys Kovai’s Shri Kannan Dept chain for Rs 152.5 cr

In a regulatory filing, RIL said the investment will further strengthen the group’s retail operations and its presence in TN and will further enable its retail and new commerce initiatives. “Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries Limited, has acquired 7,86,191 equity shares representing 100 per cent of the equity share capital of Shri Kannan Departmental Store Private Limited (SKDS) for a consideration of Rs 152.5 crore,” it said in a filing.

Kumar Rajagopalan, CEO, RAI, said such deals show it is time for “recalibration and consolidation.” Also it is proving to be an inspirational story, that would encourage newer players to enter the retail business. “Regional players (specialised retailers) are creating good value which is leading to great brands standing out,” he told DTNext.

Incorporated on September 15, 1999, Shri Kannan Departmental Store is engaged in the business of retailing fruits and vegetables, dairy, staples, home and personal care and general merchandise to consumers. It currently operates 29 stores across Coimbatore and nearby areas with a retail area of over 6 lakh square feet. The company reported revenue from operations of Rs 415 crore, Rs 450 crore and Rs 481 crore and net profit of Rs 2 crore, Rs 3 crore and Rs 4 crore in FY2018-19, FY2017-18 and FY2016-17 respectively.

Retail has been a major focus of RIL and with its plan of ‘‘new commerce’’, which is an offline-to-online initiative, the company aims to penetrate India’s retail market. Through the new commerce initiative RIL plans to link producers, traders, small merchants, brands and consumers through technology. Customer retention and guaranteed repeat are aspects that have to be put in context. a retail veteran, on condition of anonymity, said “Established brands are efficient in procurement, pricing and typical land-ownership strategies, thereby making big ticket deals more lucrative. Regional brands also get a fresh lease of life, enabling them to scale up their operations. For instance, the popular co-operative in Mumbai, Sahakari Bhandar, which is now managed by Reliance Retail. Similarly, in October last, CX Partners invested Rs 260 crore Dindigul Thalappakatti, valuing it for Rs 600 crore. Retaining the brand name, competitive advantage and turnover multiples are the determining factors for deals getting finalised. It is a win-win for all the stakeholders.” When contacted, T Thanusgaran, CMD, SKDSPL, was not available for comments.