Executive Summary

Retailing is one of the pillars of the economy in India and accounts for 35% of GDP.
The retail industry is divided into organized and unorganized sectors. Over 12 million
outlets operate in the country and only 4% of them being larger than 500 sq ft
(46 m
2
) in size. Organized retailing refers to trading activities undertaken by licensed
retailers, that is, those who are registered for sales tax, income tax, etc. These
include the corporate-backed hypermarkets and retail chains, and also the privately
owned large retail businesses. Unorganized retailing, on the other hand, refers to the
traditional formats of low-cost retailing, for example, the local kirana shops, owner
manned general stores, paan/beedi shops, convenience stores, hand cart and
pavement vendors, etc.
Organized retail such supermarkets accounts for just 4% of the market as of
2008.Regulations prevent most foreign investment in retailing. Moreover, over thirty
regulations such as "signboard licenses" and "anti-hoarding measures" may have to
be complied before a store can open doors. There are taxes for moving goods to
states, from states, and even within states.

Growth
An increasing number of people in India are turning to the services sector for
employment due to the relative low compensation offered by the traditional
agriculture and manufacturing sectors. The organized retail market is growing at 35
percent annually while growth of unorganized retail sector is pegged at 6 percent.
The Retail Business in India is currently at the point of inflection. Rapid change with
investments to the tune of US $ 25 billion is being planned by several Indian and
multinational companies in the next 5 years. It is a huge industry in terms of size and
according to management consulting firm Technopak Advisors Pvt. Ltd., it is valued
at about US $ 350 billion. Organized retail is expected to garner about 16-18 percent
of the total retail market (US $ 65-75 billion) in the next 5 years.
India has topped the A.T. Kearneys annual Global Retail Development Index (GRDI)
for the third consecutive year, maintaining its position as the most attractive market
for retail investment. The Indian economy has registered a growth of 8% for 2007.
The predictions for 2008 is 7.9%. The enormous growth of the retail industry has
created a huge demand for real estate. Property developers are creating retail real
estate at an aggressive pace and by 2010, 300 malls are estimated to be operational
in the country.
With over 1,000 hypermarkets and 3,000 supermarkets projected to come up by
2011, India will need additional retail space of 700,000,000 sq ft (65,000,000 m
2
) as
compared to today. Current projections on construction point to a supply of just
200,000,000 sq ft (19,000,000 m
2
), leaving a gap of 500,000,000 sq ft
(46,000,000 m
2
) that needs to be filled, at a cost of US$15-18 billion. (8)
According to the Icrier report, the retail business in India is estimated to grow at 13%
from $322 billion in 2006-07 to $590 billion in 2011-12. The unorganized retail sector
is expected to grow at about 10% per annum with sales expected to rise from $ 309
billion in 2006-07 to $ 496 billion in 2011-12.

The Indian Retail Market
Indian market has high complexities in terms of a wide geographic spread and
distinct consumer preferences varying by each region necessitating a need for
localization even within the geographic zones. India has highest number of outlets
per person (7 per thousand) Indian retail space per capita at 2 sq ft (0.19 m
2
)/ person
is lowest in the world Indian retail density of 6 percent is highest in the world. (9) 1.8
million households in India have an annual income of over 45 lakh (10) delving
further into consumer buying habits, purchase decisions can be separated into two
categories: status-oriented and indulgence-oriented. CTVs/LCDs, refrigerators,
washing machines, dishwashers, microwave ovens and DVD players fall in the
status category. Indulgence-oriented products include plasma TVs, state-of-the-art
home theatre systems, iPods, high-end digital cameras, camcorders, and gaming
consoles. Consumers in the status category buy because they need to maintain a
position in their social group. Indulgence-oriented buying happens with those who
want to enjoy life better with products that meet their requirements. When it comes to
the festival shopping season, it is primarily the status-oriented segment that
contributes largely to the retailers cash register.
While India presents a large market opportunity given the number and increasing
purchasing power of consumers, there are significant challenges as well given that
over 90% of trade is conducted through independent local stores. Challenges
include: Geographically dispersed population, small ticket sizes, complex distribution
network, and little use of IT systems, limitations of mass media and existence of
counterfeit goods.

Indian apparel Retailers
Indian apparel retailers are increasing their brand presence overseas, particularly in
developed markets. While most have identified a gap in countries in West Asia and
Africa, some majors are also looking at the US and Europe. Arvind Brands, Madura
Garments, Spykar Lifestyle and Royal Classic Polo are busy chalking out foreign
expansion plans through the distribution route and standalone stores as well.
Another denim wear brand, Spykar, which is now moving towards becoming a casual
wear lifestyle brand, has launched its store in Melbourne and London recently.
The low-intensity entry of the diversified Mahindra Group into retail is unique
because it plans to focus on lifestyle products. The Mahindra group is the fourth
large Indian business group to enter the business of retail after Reliance Industries
Ltd, the Aditya Birla Group, and Bharti Enterprises Ltd. The other three groups are
focusing either on perishables and groceries, or a range of products, or both.

Major apparel Retailers in India
SPYKAR LIFE STYLE PVT. LTD.
WILLS LIFE STYLE PVT. LTD.
LEVIS
PEPE
LEE
KILLER
ARMANI
WRANGLER
UMM
REEBOK
NIKE
ADIDAS
PUMA
TURTLE




Major Indian Retailers
Vivek Limited Retail Formats: Viveks, Jainsons, Viveks Service Centre,
Viveks Safe Deposit Lockers
REI AGRO LTD Retail Formats:6TEN Hyper & 6TEN Super
RPG Retail Formats: Music World, Books & Beyond, Spencers Hyper,
Spencers Super, Daily & Fresh
Pantaloon Retail Formats: Big Bazaar, Food Bazaar, Pantaloons, Central,
Fashion Station, Brand Factory, Depot, aLL, E-Zone etc.
The Tata Group Formats: Westside, Star India Bazaar, Steel junction,
Landmark, Titan Industries with World of Titans showrooms, Tanishq outlets,
Chroma.
K Raheja Corp Group Formats: Shoppers Stop,Crossword, Hyper City, Inorbit
Lifestyle International Lifestyle, Home Centre, Max, Fun City and International
Franchise brand stores.
Pyramid Retail Formats: Pyramid Megastore, TruMart
Nilgiris Formats: Nilgiris supermarket chain
Subhiksha Formats: Subhiksha supermarket pharmacy and telecom discount
chain.
Trinethra Formats: Fabmall supermarket chain and Fabcity hypermarket chain
Vishal Retail Group-Formats: Vishal Mega Mart
BPCL Formats: In & Out
Reliance Retail Formats: Reliance Fresh
Reliance ADAG Retail Format: Reliance World
German Metro Cash & Carry
Shoprite Holdings Formats: Shoprite Hyper
Paritala stores bazar: honey shine stores
Aditya Birla Group - more Outlets








Entry of MNCs
The world's largest retailer by sales, Wal-Mart Stores Inc and Sunil Mittals Bharti
Enterprises has entered into a joint venture agreement and they are planning to
open 10 to 15 cash-and-carry facilities over seven years. The first of the stores,
which will sell groceries, consumer appliances and fruits and vegetables to retailers
and small businesses, is slated to open in north India by the end of 2008.
Carrefour, the worlds second largest retailer by sales, is planning to setup two
business entities in the country one for its cash-and-carry business and the other a
master franchisee which will lend its banner, technical services and know how to an
Indian company for direct-to-consumer retail.
The worlds fifth largest retailer by sales, Costco Wholesale Corp (Costco) known for
its warehouse club model is also interested in coming to India and waiting for the
right opportunity.
Opposition to the retailers' plans have argued that livelihoods of small scale and rural
vendors would be threatened. However, studies have found that only a limited
number of small vendors will be affected and that the benefits of market expansion
far outweigh the impact of the new stores.


Challenges
To become a truly flourishing industry, retailing needs to cross the following hurdles:
Automatic approval is not allowed for foreign investment in retail.
Regulations restricting real estate purchases, and cumbersome local laws.
Taxation, which favours small retail businesses.
Absence of developed supply chain and integrated IT management.
Lack of trained work force.
Low skill level for retailing management.
Intrinsic complexity of retailing rapid price changes, constant threat of
product obsolescence and low margins.





Spykar Lifestyle Pvt. Ltd

Spykar Lifestyle Pvt. Ltd. is committed to being the first choice casual wear brand of
the youth. The companys brand does not have a fixed definition but has always
been relevant to the youths and also to the changing market dynamics.
The companys brand building activities will continue to maintain the premium
positioning and make it one of the most inspirational, trendy and obviously the most
sought after brand. The Company is compliant, eco friendly, socially responsible,
evolving, profit oriented, always people-centric and doing justice to those who work
for it. To continuously innovate, and to bring new styles, cuts and fabric to the
market, the company has a team of young and dedicated designers and
merchandisers, who are extremely aware of the latest trends in the international
market. The company experiments a great deal on new styles and accessories,
making them trendy and accessible to the Indian consumer. Since Spykar designs
specifically for Indian audiences, it has the best fits and designs in its repertoire.

SPYKAR products are available at more than 800 MBOs (Multi-Brand Business
Outlet) across the country, apart from the LFS (Large Format Stores) like Shopper's
Stop, Globus, Lifestyle, Pantaloons, Pyramids, etc. and at the Exclusive Spykar
Jeans Outlet at Ahmadabad, Ghazi bad, Hyderabad, Indore, Kolkata, Lucknow,
Mumbai, Nasik, New Delhi and Pune. Spykar Jeans currently has 250 Exclusive
Brand Outlet. To mark its foray in the international arena, Spykar has also opened
its Exclusive Brand Outlet in Australia and England.
Spykar believes that retail expansion is the key to future growth. Developing
adequate sourcing ability to match sales growth would entail expansion of designing
and sampling ability along with creation of infrastructure for world class quality
control.
Spykar Life Style Pvt. Ltd. Has two brands addressing different market segment: one
would be for the kids wear segment i.e. OYO and other for youth i.e. Spykar. The
entry in other life style product has also been made with world class eyewear,
footwear, junk-jewelry and other lifestyle accessories already launched. The focus is
addressing the fashion needs of youth segment which is extended on both sides of
that spectrum and to deliver world-class fashion products consistently. As an incident
of identifying fashion need Spykar has been only one to offer concept of style labs in
selected cities where the youths gets entire makeover including hairstyle, tattooing,
body piercing, eyewear/ colored lenses and of course the Spykar clothing with
matched accessories.

Wills Lifestyle, Levi's, PEPE, Lee, Killer, Wrangler, UMM, Reebok, Nike, Adidas and
Puma etc. are the big competitors of the Company.
Spykar's turnover of about 250 Crores in 2008-09 will take quantum jumps to
Rs.300 Crores in 2009-10. Further Spykar has will plan towards its IPO by
December, 2009.


Company Business Analysis


Spykar Lifestyle Pvt. Ltd. has sales their Apparels and Accessories through MBO
(Multi-Brand Business Outlets), EBO (Exclusive Brand Outlet), LFS (Large Format
Stores), FSO (Factory Sales Outlet).
There are more than 800 MBOs of the Company all over India. Spykar Lifestyle Pvt.
Ltd. gets average 33% margin on sales to MBO. EBO (Exclusive Brand Outlet)
consists around 250 stores all over the India. The company provides average 28%
margin on apparels and average 18% margin on accessories. LFS (Large Format
Stores) like as Shoppers Stop, Central, Lifestyle, Globus, Pantaloon, etc. The
Company provided lesser margin on LFS than EBO and MBO. All non-moving items
and unsold stock sold through FSO (Factory Sales Outlet). There are around 50
Factory Sales Outlet of the company.





Contribution:-
Contributions of MBO, EBO, LFS and FSO in Companys sales are as following-


Business Format
Contributions in
Companys Sales
MBO (Multi-Brand Business Outlet) 25%
EBO (Exclusive Brand Outlet) 50%
LFS (Large Format Store) 20%
FSO (Factory Sales Outlet) 05%


25%
50%
20%
5%
MBO (Multi-Brand Business
Outlet)
EBO (Exclusive Brand Outlet)
LFS (Large Format Store)
FSO (Factory Sales Outlet)
In these all business format EBO (Exclusive Brand Outlet) plays an important role in
Companys Sales. Because, 50% of Companys sales done through EBO. For
Exclusive Brand Outlet, the company hires a shop from shop owner and pay monthly
Rent and CAM (Common Area Maintenance) charges to the shop owner. Before
taking possession on shop, company made Rent Agreement and CAM agreement.
In this Rent Agreement and CAM Agreement all terms and conditions are mentioned,
which are signed by both parties. It is also called as Leave and License Agreement.

Project Description:-
This project is carried out for Spykar Life Style Pvt. Ltd., for the period 15
th
May to
15
th
July 2009 at Corporate Office, Goregaon (East), Mumbai.
The project Title is Micro Finance and the project is based on finance cost
rationalization and systems improvement.