Planet Retail withdraws expansion plans

Planet Retail, which sells a clutch of international clothing

and accessory brands in India, has stopped both its expansion and investment plans on the back of a weak global economy and slow in demand and sales. The retailer of Guess, Body Shop, Accessorize, Next and Nautica brands in India may also miss its 2015 break-even target. Planet Retail, after a substantial restructuring and clean-up exercise in 2010, had embarked on an expansion plan to extend its reach and bring in new brands apart from building the existing ones. But it has now decided to put all its scheduled plans on hold.

It also has a licence to run a chain of Debenhams lifestyle stores in the country. Issues such as rupee depreciation, weak retail sales in the last two quarters as experienced by other retail brands and pending decision over FDI in multi brand retail are being cited as major reasons behind the company’s decision to stop expansion and investment plans.

It may be noted that many global brands in India such M&S too had changed their pricing, positioning and sourcing strategies during the slowdown of 2008-09 to cater to the local consumers. Some brands like Dockers and Springfield had to make an exit from the country. According to retail analysts, brands that come into India through licensing agreements, such as the brands at Planet Retail, face challenges in both pricing and product mix. The company has now decided to do a serious evaluation to consolidate its brand portfolio and exit one-two brands if required.