As part of a strategy change, officials briefed on internal guidelines have reportedly stated that Reliance Retail has demanded that all new stores break even within 6 to 12 months, failing which they will either be closed or converted to alternative formats.
This dramatic departure from its prior two-year break-even period indicates a greater emphasis on profitability and margin management as the business gets ready for its eagerly awaited initial public offering.
Top-level directives within the retail behemoth are the source of this edict, said a report from the Economic Times. Additionally, it signals the end of an era of ambitious expansion, with yearly shop openings to be reduced from over 1,000 to 500–550 locations. Over 3,650 underperforming shops were closed in prior years, despite the opening of 3,300 stores in FY23 alone.
Reliance Brands’ luxury division, which consists of brands like Armani Exchange and Hugo Boss, will remain a vital vertical in the business’s offering.
Similar to its Azorte concept, the well-known discount fashion chain Trends is being marketed for younger consumers utilising emerging technologies. This enhances the company’s overall simplifying approach, which is already starting to show up in its performance indicators.
Profitability in high-burn industries like e-commerce, especially with its 30-minute delivery strategy, is another goal for Reliance Retail. Deliveries will be made from the closest retail locations rather than investing in additional infrastructure, saving the business money on dark store expenses.
