Rise and Fall of Subhiksha Retail

Topics: Inventory, Reliance Industries, Retailing Pages: 4 (1262 words) Published: September 26, 2010
Rise & Fall of SUBHIKSHA Retail

Subhiksha with a pioneering approach and giving new definitions to the retailing ventured into the Indian retail industry. Since, their predecessors are already existed and doing well in the market, they had to come up with an innovative approach to compete with them. They have made an extensive research on customer behavior and found that offering the branded goods at a lower price than their competitors could make them stand in the competitive retail industry.

In the year 1997, Subhiksha opened its first store at Thiruvanmiyoor in Chennai with an investment of around Rs 4-5 lakh, with the theme,” why pay more when you can get it for less at Subhiksha”

The expansion of the stores

By March 1999, Subhiksha started expanding rapidly. From 14 stores, it was expanded to 50 stores by June 2000. In the next two years, it had 120-130 stores across Tamilnadu. They decided to look at every part of India which is significantly literate and is a significant consumption market. Telecom companies are their role model. They employed capable regional managers and expanded. In 2004-05, they decided to have 420 stores in places like Gujarat, Delhi, Mumbai, Andhra and Karnataka by 2006.

The triumphant journey of Subhiksha

Until little over two years ago, Subhiksha was only a local player with 150 stores (September 2006) operating mainly in Tamilnadu. The retailer began growing rapidly outside the state, soon after infusion of private equity capital by I-venture, the venture capital arm of ICICI. I-Venture took 24 per cent stake in the company’s equity, which until then was primarily held by Subramanian and his associates. Riding on the back of rapid expansion, Subhiksha’s turnover grew from Rs 330 crore in 2005-06 to Rs 833 crore in 2006-07, and then to Rs 2,305 crore in 2007-08 (year ending March 31, 2008). Likewise, having grown from 150 stores in September, 2006 in Tamilnadu to 1,600-odd stores across the country in...
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