New Delhi, June 03: Mukesh Ambani- led Reliance Retail has hired an expert retail management team from Thailand and Europe to spearhead its retail business, which has been reeling under continuous loss.
“ The company is planning to revamp the whole retail business. They hired an expert team of 35 senior executives from various retail biggies like Tesco Lotus of Thailand, European retail giant Morrison ( Wm) Supermarkets Plc and the US retailer Wal- Mart. The team will work under Gwyn Sundhagul, chief marketing officer with Tesco Lotus, Thailand, who was hired last year,” a senior executive of Reliance Retail told M AIL T ODAY . Sundhagul joined Reliance Retail as chief executive officer ( value formats) in December.
Barring Manoj K. Modi, who is close to Mukesh Ambani, the old team has been replaced with a new one. The new team has been entrusted with the task of making all formats profitable by 2012 and to double the business in the next five years. According to senior officials some of them are on short- term deals to establish a new supply chain management system and design the new hypermarket model.
After revamping the top team, the firm is now planning to make changes in the middle- level management, too. After Sundhagul joined Reliance Retail, about a dozen more executives were hired from Tesco Lotus, Thailand.
In July, 20 more executives from the same firm are expected to join Reliance Retail.
Since its inception in 2006, the total retail business of the firm has spread to more than 85 cities with 1,000 specialty stores. However, unlike other businesses of the Reliance group, the retail arm failed to turn profitable even after an investment of Rs 5,220 crore. Several of its retail formats — Reliance Fresh, Reliance Digital, Reliance Trends, Reliance Footprint and Reliance Wellness — are making losses.
In financial year 2009- 10, Reliance Fresh posted a loss of Rs 135 crore, Reliance Digital lost Rs 6 crore, Reliance Trends posted a loss of Rs 1.39 crore, Reliance Footprint reported a loss of Rs 2.79 crore, Reliance Wellness posted a loss of Rs 11.36 crore and Reliance Jewels, posted a loss of Rs 4.15 crore.
The company had to shut over 50 loss- making stores.
However, in a meet with its key retailers last month, Mukesh Ambani said, “ I never give up. I want to make a world- class retail chain and I am committed to this cause. I will support the venture throughout.” Following the message, the company has developed a new business strategy that focuses on multi- format and hypermarket models, setting up more distribution and fresh processing centres and adapting customer innovation centres. The company will also open a retail academy to train its manpower especially for retail.
“ We have built a strong and experienced top leadership team to ensure we can implement the plans,” Sundhagul said.
The newly designed hypermarket model will have floor spaces of at least 80,000 sq ft. The first such hypermarket will be opened in Thane.
—Agencies