Mahindra Retail to tie up with US kids’ wear brand Carter’s

Mahindra Retail and Carter’s Inc have entered into a buy and sell arrangement. Under this, Mahindra Retail, which is part of Mahindra Group, will sell kids’ wear in its BabyOye stores across India and online.

Mahindra Retail will open 40 shop-in-shop BabyOye stores. This means that Carter’s will be given space within BabyOye stores to sell its products. Such stores will be opened in 15 cities across India in 2016. This will be Atlanta-based Carter’s third attempt to enter the kidswear segment in India. With this agreement, Carter’s will be easily accessible to Indian customers. The clothes will be priced in the range of Rs 600 to Rs 2,500. The target age would be newly born to 24-month-old toddlers in brick-and-mortar stores while online they will be available till the age of seven.

This tie-up agreement comes in the wake of Mahindra Retail making losses during the fiscal and not being able to achieve the target of Rs 250 crores in FY 16. However, the company expects to break even in two years and report a turnover of around Rs 220s crore this fiscal. The reason for the loss is primarily low demand for branded kidswear. In fact, the company had shut more than 25 loss making stores last year and in some locations it even downsized the stores.

Last fiscal Mahindra Retail’s revenues were Rs 210.5 crores and the losses amounted to Rs 118.9 crore. The company operates 110 BabyOye stores in 52 cities. This year it plans to add 50 francise stores. Zhoobeen Bhiwandiwale, chairman, Mahindra Retail, says that the company keeps a watch and evaluates 10-15 per cent of our stores which are not performing well, and if the performance doesn’t improve then the store is shut down. It is, he says, a continuous process.