Overview Pantaloons Retail India Ltd. is one of Indias largest organized modern-format retailers promoted by Mr. Kishore Biyani.

From the beginning in 1987, PRIL has today evolved as one of the leading manufacturer-retailer and are among the pioneers in setting up a nationwide chain of large format stores in India. PRIL is entrepreneur driven, professionally managed focused on meeting the customer requirements for a large component of their spend across fashion, food, general merchandise, home in both value and lifestyle segments. The companys business has grown from one store in Kolkota in 1997, occupying an area of 8,000 Sq. ft to 72 stores, apart from our 22 factory outlets located in multiple cities occupying an aggregate area of 21, 07,608 Sq. ft. the company focuses on the Lifestyle segment through 14 Pantaloon stores, 3 Central Malls, 2 aLL stores, 2 Fashion Station and 1 MeLa store. In the Value segment, PRIL caters to the masses through 21 Big Bazaar and 30 Food Bazaar outlets. The company retails a range of branded and Private Label apparel, footwear, perfumes, cosmetics, jewellery, leather products and accessories, home products, books, music and toys in our stores. They also retail household items, consumer durables, home furnishings, apart from food and personal care products. This is complemented by cafes, food stalls, entertainment, personal care and various beauty related services. Promotions and events are an integral part of the service offering to customers, which helps create a unique shopping experience. The exclusive formats include; Pantaloons : Lifestyle products under Private Labels and third party brands

Central: Seamless mall providing the customer with a wide range of lifestyle product across multiple national and international brands

Big Bazaar: Value retailing with a range of products from apparel, toys, accessories, consumer durables to household products and furnishing

Food Bazaar: Food and personal care products including dry groceries and FMCG Products

Competitive Strengths The following are the key strengths of PRIL: Brand Equity and early mover advantage PRIL is of Indias leading retailers with presence across multiple formats and stores across large and medium cities across India. The Company successfully introduced the hypermarket format through Big Bazaar, introduced the concept of seamless malls through Central, launched Fashion Station to offer fashion apparel and accessories to mass market buyers in a theme based style, opened aLL an exclusive lifestyle store for plus size people and continue to invest in new concepts and formats to capture a greater share of the consumer wallet, either directly and through our strategic investments. Entrepreneur led, professionally managed by an experienced team PRIL has an experienced professional management team led by our Promoter Mr. Kishore Biyani, who is one of the leading entrepreneurs in the retail sector in the country and has received various awards over the years, with the recent one being the Retail Face of the Year, 2005 (Images Retail Awards 2005). The management team is complemented by a committed work force. The Human Resources policies aim to create an engaged and motivated work force, which is essential for success in any service oriented industry

Vast range of lifestyle and value retail products and services

The companys merchandise ranges across apparel, accessories, food products, home and kitchen products, dry and fresh groceries, consumer durables and non durables with over 2,70,000 SKUs, which are complemented by our services offerings. Presence in both Lifestyle and Value retailing enables us the organization to cater to a large segment of the population. The company offers the customers a variety of national and international brands as well as our Private Label brands under one roof. Strong distribution and logistics network and supply chain PRIL has created a strong distribution and logistics network, with its 13 Distribution Centres covering 2,60,000 Sq. ft, handling over 1,00,000 SKUs, and working 24 hours a day and 7 days a week. Large base of loyal customers PRIL had 4, 22, 80,682 customer entries in our stores in the year ended June 30, 2005. The emotional connect that PRIL has been able to create with its customers through their service offering and special promotions has helped us convert many of them into loyal customers. The company had over 2,19,989 members of the loyalty programme Green card in its format Pantaloon as on August 31, 2005. The Green Card programme contributed to about 31% of our sales of Pantaloons in FY 2005.

Business PRIL is one of Indias major retailers with presence in following two segments: 1. Lifestyle Retailing - Pantaloons, Central, Fashion Station, aLL,MeLa 2. Value retailing - Big Bazaar, Food Bazaar The entire operations can be summarized in the following diagram;

Pantaloons Stores

Sr. no 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

City Kolkata Hyderabad Hyderabad Chennai Ahmedabad Kolkata Kanpur Pune Mumbai Gurgaon Mumbai Baroda Ahmedabad Bangalore Indore Delhi Delhi Mangalore Mumbai Mumbai Rajkot Secundarabad

Location Gariahat Begumpeth Himayat Nagar Spencer Plaza AhmedabadL Camac street Kanpur Inox Phoenix ,Lower Parel Sahara Mall Center One,Vashi Inox 10 Acre, Kankaria Sigma Mall Treasure Island 11 Rajouri Garden Shahadra Bharat Mall Shri Vallabh Shopping Center, Borivli R Mall, Mulund Bharath Iskcon Mall Hazratganj, Lucknow

Area( Sq. ft) 16,000 16,000 9,000 22,000 27,500 41,000 30,000 8,000 50,000 17,000 22,000 20,000 20,000 20,000 NA NA NA NA NA NA NA NA

Approximate number of footfalls per day in pantaloons HSP is approximately 2000 excluding the disguised footfalls. The corresponding conversion rate is 10-12%.

The Target Audience and Positioning Target Audience at High Street Phoenix A survey undertaken at High Street High Street Phoenix reveals some interesting characteristics about the nature of shoppers who frequent High Street Phoenix. High Street Phoenix is popular for its shopping arcade with its stores in clothing, fashion accessories, home dcor and the like- traditionally considered to be a female domain. At High Street Phoenix however, male shoppers outnumber female shoppers, what with the food and entertainment zones tingling their tastes and taste buds. The shoppers are primarily those who have the money and enjoy living it up. They fall in the age bracket of 18 to 35, with a huge following in students and new wage earners with wellpaying jobs. They are the free-spirited souls, mostly unmarried, who frequent the place whenever they find the time or need a break or just want to hang out. The most popular reason for their affinity to High Street Phoenix is the fact that most of their family and friends they want to spend time with and enjoy with, endorse it. Being a family get- away and a popular hang out among the GenX, catering to a wide range of tastes, preferences and pockets makes it very easily a popular choice for a day out or an evening out. The average individual spending at High Street Phoenix ranges anywhere between Rs.500 and Rs. 2,000 notching a much higher figure for family spendings. A proportionately large number of shoppers travel over 10 km to visit High Street Phoenix, their favorite mode of transport being their private vehicle. The typical shopper at High Street Phoenix falls in the Socio Economic Class A & B (SEC A and B) who has a pocket and a mind of his own. Target market and Positioning of Pantaloons

Pantaloons is positioned as a department store catering to the middle and upper-middle class sections at each of its locations. Its core offering is branded merchandise, retailing international, national and regional brands as well as private and proprietary labels. Today, a leader in Fashion...Pantaloons promises Fresh Fashion for the entire family as well as the young and the young-at-heart. The belief is that they will be the key drivers of fashion. Thus it is a store focusing on providing a value for money proposition as it provides quality fashion products at an affordable price as compared to the competitors.

The Retail Format a) Store location The location of a retail store occupies an important place in retail strategy. It not only conveys the image of the store, but also influences the merchandise mix and the interior layout of the store. While the merchandise mix can be changed and prices can be adjusted, it is difficult to change the decision on store location. Factorial analysis. Traffic The traffic pedestrian as well as vehicular that passes the site is an important determinant of the potential sales that can be generated from a store.

The site where High Street Phoenix Mall is located can be identified as a High Traffic area (in terms of vehicles as well as pedestrians). The drawing power, that is, the ability to pull the customer is also on the higher side. As such pantaloons can cater to the shopping needs of a large population.

Accessibility of the market Accessibility of a market is defined in terms of the availability of public transport and road/local trains connections to the markets. It also takes into the frequency of the corresponding bus/train services and connectivity to the different parts of the city. Lower parel is much in the center of the town and the central and western suburbs Concerning phoenix mall, several railway stations like Lower Parel, Parel and Mahalaxmi are closely located.. Further the easy availability of transport facilitates makes the location really accessible for shopping. Visibility Pantaloons is situated very close to the main road. Pantaloons being a three floored building has great visibility. To enhance the visibility pantaloons has put its sign board on the top of the building. Total number of stores and the type of stores that exist in the area HSP encompasses stores like Lifestyle, Trent, Adidas.which directly compete with Pantaloons. This is really disadvantageous for Pantaloons. On the contrary HSP also caters to the shopping needs of a large number of customers thereby providing a great advantage to the shops located in its compound,

Amenities Available The availability of basic amenities such as washrooms, drinking water, ample parking space (a factor slated to be gaining utmost importance recently) etc. plays an important role for attracting customers. One of the newest things to come to HSP is a multi-level parking lot, which is slated to be the first of its kind in India. As of now it may at least take another year to finish. Thus it is clear that the availability of the requisite facilities at HSP provides a distinct advantage to the customers of Pantaloons.

Product Mix Offered The kind of product mix to be offered by the retailer is another important consideration. As mentioned earlier the main product line of Pantaloons is mens and womens clothing and other accessories comprising a vigilant mix of private as well as other labels. The shopping ambience of HSP as well as that of Pantaloons reiterates the advantages of the location.

b) Pricing

High turnover

Low Margin

High Margin

Low turnover

Since Pantaloons provides products to a potentially large number of customers at affordable prices, it falls in the High Turnover - Low Margin Category. c) Layout The store directory

Ground Level Ladies Formal Ladies Denim Cosmetics and Fragrances Fine Jewellery Blue Sky (Sunglasses and Watches) Fashion Accessories Customer Service Desk First level Spring (Designer wear for men and women)Ladies Formal Ladies Ethnic Night ware and Lingerie Kids Wear Infant Necessities Toys Footwear Ladies Wash Room Drinking Water Second Level Mens Occasions Wear Mens Formal Mens Ethnic Denim Wear Mens Casuals Active Wear and Sporting Goods Teen Boys Mens Washroom Drinking Water

The layout of High Street Phoenix

The S1 block in the above layout represents the Pantaloons Store whereas the S17 block represents the competitor Lifestyle. Both the stores are linked by a passage with other stores on the either side. These include Weekender, Reebok, Nike etc. This acts as a big hindrance for Pantaloons as several customers enter the store from one end and leave from one end and leave from another. Consequently the footfalls in the store are disguised. Layout of Pantaloons Store (Ground floor)
Trial room, toilets, drinking water

Office

Trial Mall Entrance

Staff entry or Stocks

Cosmetics (Lakme, loreal)

Designer Brands (Clothing)

Cash Counter

Ladies formals

Trial Jewelry Section Ladies Denim

Customer Service Desk

Perfumes and cosmetics

Perf ume s And

Nokia

Bags, Watches Sunglasses

Baggage Counter

Cos meti cs

Lifts Stairs

Main Entrance

Alteration Desk

The above shop floor layout has been provided by one of the executives who manages the CHANEL perfumes and cosmetics department. Being a department store, Pantaloons exhibits an arrangement of merchandise in a freeform layout. Such a layout allows free movement and also encourages people to browse and shop with convenience. The floor space is allocated on the basis of the contribution of a particular department to business (as stated by Mr. Anwar Ali Sheikh, ASM). As such, the Mens department has been assigned an entire floor. The total area of the entire store is approximately 50000sq.ft. However the most disappointing aspect about the layout was the presence of Toilets, Trial rooms and drinking water at adjacent places. This format was exhibited by all the three floors of the store. The layout of the store is modified on a regular basis by shifting the fixtures and display of the merchandise so that the customers develop a feel of novelty in the store.

d) Store Design 1) Exterior Store Design The location of the building is very prominient. It is very much closer to the main road. It has a modern look which is further enhanced by the silver finish as well as the green color appropriately resembling the brand. The name Pantaloons Urbania at the top of the building further enhances the stores visibility. The clothes and accessories available in the store are nicely put up at the windows of the building. At night the building is brightly lit up. The focus is largely on the name plate at the top. The entrance has an automatic door closing system. There is always someone to greet the customers entering the shop. Towards the immediate right of the entrance is the baggage counter. Also a wheel chair is kept for the disabled. As one proceeds, there is a customer grievances desk and a counter for green card members. A couch has also been placed near the desk, which is really comforting in case of a queue.

2) Interior Store design Flooring and Ceiling The interior layout generates good brand associations through appropriate color combinations. The white color of the walls and floor coupled with the green color of the visual merchandise helps in portraying the brand effectively. Graphics and Sign gages Exactly opposite to the entrance gate of the store is a store directory mentioning the various sections/departments of the entire store (Ground, First and Second floors). On the right hand side wall is a sign gage (exactly opposite to the customer grievances desk) indicating the promotional schemes (currently Sona Heera Utsav). However the directional signs are not quiet visible. Atmospherics: Lighting Good lighting in a store involves more than illuminating space. Lighting is used to highlight merchandise, sculpt face and capture a mood feeling that enhances the store image. White lighting has been majorly used in the store so that the customers can identify the requisite colors of the apparels. Sound type and density Instrumental music is played over loud music in the store making the shopping environmental more serence and calm Odour type and density Like sound, odour too has a negative or positive impact on the atmosphere of the store. The strength (density) of the odour is also important. This is because, even if the odour is right but too strong or intense, the ultimate impact generated by it is negative. Considering pantaloons, perfumes or room fresheners are aprayed through the air conditioners.

e) Visual Merchandising Merchandise Type and Density One can come across campaign graphics in the store with merchandise places near them. Mannequins are displayed with accessories to generate impulse purchases. Spot lights are also focused on the visual merchandise so as to gain the attention of the customers. Pantaloon focuses on the latest fashion apparels. No rack is kept empty as it may create a negative impression in the minds of the customers. Eg. Concerning the T shirts department (especially in case of UMM Brand), one t shirt of a particular color or design is displayed, while next to it, on a shelf the same T shirt but with different colors is displayed. Fixtures Detachable fixtures with smooth edges are maintained in the store especially in the kids segment. Packaging The Products purchased by the Customers are packed in green colored Reacyclable Plastic Bags. The bag is sealed with a tape bearing a statement Thank you for shopping ant Pantaloons on it.

f) Merchandise Pantaloons has applied the concept of category management in its day-to-day merchandising function as against the traditional brand management merchandising practice followed by most retailers. Category managers look at sales and margins of each brand in a category. The whole idea of category management is to create products across length and breadth of a category at different price points, fabrics, design, shape, seasons, colour and size.

Functions under category management can be broken into: Merchandising The Category manager develop a merchandising strategy for the category taking into consideration customer profile, classification, resource structure, vendors, fashion trends, items and price points. The category manager visit stores regularly to check assortments of merchandise displays, stock levels and old season merchandise, consult with team leaders and sales people on problems and suggestions. Although no concrete information was provided with respect to the ways of forecasting the sales and inventory planning, it was highlighted that a buffer stock of approximately 10-12% of the total stock is maintained in the store. Sourcing / Purchasing The category manager controls quantities to be purchased as per the sales forecast. The purchasing is done based on a plan made for the season and re-orders been placed based on sales and stock levels. The Category Manager reviews the actual sales versus planned sales and source the material based on feedback from storefront. Logistics Category manager ensure that goods are dispatched in right quantities and at right time to reach stores with sufficient time in hand to promptly cater to customer demands.

Promotions Category manager plans promotions / brand or product building schemes. The category manager identifies slow movers and also disposal plan for the same.

Categories and Private labels Private Labels Serial No 1 2 Private Label Pantaloon Trousers Bare Jeans Category Mens Wear Jeans, Knitwear, gabardine, jackets, and other accessories. 3 4 5 John Miller Shrishti Scotsville Shirts Ladies wear Winter wear, sweaters, cardigans and blazers 6 7 8 9 10 11 12 13 14 15 Scotsville Annabelle Ajile Mixnmatch Honey Akkritti Lombard Trishaa UMM Ghagroos Ladies western wear Ladies western wear Sports wear Buying separates and combining Western wear brand for young girls Mens ethnic wear Classic English formal wear Stitching salwar kammez Trendy sports and utility wear Mens Ethnic wear

Other Labels Smart Casuals: Easies, Indian Terrain, Dockers, Shapes, Blackberry

Jeans wear: Pepe, Lee, and Wrangler. Sportswear: Nike, Adidas, Reebok, Spalding, Puma, Speedo Young Fashion: Friedwater, Spykar, Moral Fibre Ladies Ethnic Wear: Biba, W The Springboard collection: ladies Designer wear Kids and Infants: Bare Kids, Disney apparels, Popeye, No Rules, Chalk, Urban Spool, Umbrella (All private labels) An intensive Private Label offering requires a proactive and innovative design team. To fulfill this objective a Design Studio was created at Mumbai. Pantaloons has a design team comprising of 35 members, all qualified graduates form National Institute of Fashion Technology (NIFT), National Institute of Design (NID), Nottingham Trent University,UK (NTU) and other institutes. The team has a combination of senior designers and new recruits providing a mix of experience and youth. In addition to conceptualizing designs for apparels, the team also designs and develops logos, labels and tags. Presence of a dedicated design team has resulted in faster introduction of new Private Labels as well as ensures that all existing Private Labels undergo frequent refurbishment.

Manufacturing, Vendor management and SCM The business model followed at Pantaloons is unique because the company has successfully integrated backwards into the in-house manufacture of part of the apparel products sold from their shelves. Through their manufacturing capabilities they have the ability to control garments from the initial stages in the value chain, to tide over unexpected demand and cope

with the unpredictable world of fast changing fashion trends. The resulting seamless integration and relative independence from intermediaries represents a competitive advantage in terms of value, cost and convenience. Pantaloons has a trouser manufacturing plant at Tarapur .The trouser manufacturing plant is equipped with state-of art, fully automatic machines for fusing, surging, bottom hemming and welt pocket- making operations. The factory has a capacity to manufacture 3,000 trouser pieces a day. It has 300 machines and is operated by 340 workers. Availability of products at the right time and at affordable cost is of utmost importance in retail business. Supply Chain management ensures this. The diverse requirements of different retail formats in which Pantaloons Retail India Ltd. operates requires a model which is flexible enough to meet the diverse requirement of various formats; incase of Pantaloons- the time to market is of paramount importance. Keeping this in mind, the company has created its our own supply chain and logistics model. The Supply Chain function involves vendor management, quality assurance and transportation. Vendor management assumes critical importance in retail business where one has to deal with multiple products. Pantaloons has in place a robust vendor management system. Vendors are identified all over the country and strategic relationships are developed. A transparent vendor rating system rates each vendor across a variety of parameters. Regular interaction and rating system ensures that the vendor remain in sync with our Companys goals and targets. Improvement in communication with vendor and vendor development initiatives like standardization of norms for size and fits, and implementation of a vendor rationalization program enables the company to increase the number of A rated vendors by over 80 %. The Supply chain department has been awarded the ISO 9001:2000 certificate by Det Norske Veritas. The basic raw materials required for the manufacturing process of apparels includes suiting fabrics. Some of the fabrics used in the manufacturing process are imported from countries likes Turkey, Dubai. Sourcing of these materials also takes place from local traders in India. They have suppliers of fabrics located in cities such as Ahmedabad, Mumbai, Bhilwara from whom sourcing of the fabrics takes place as and when required depending upon the production plan.

The company sources various components that go into apparel e.g. fabrics, manufacturing, accessorization from vendors in India and abroad. The final inspection happens under our strict observation. Pantaloons identifies and develops exclusive vendors and mould them into entities that will help in meeting specific company requirements. They act as a guide to these manufacturers and are involved from the inception stage right from suggesting the machinery, providing all technical inputs to transferring manufacturing expertise to these vendors. This allows adding flexibility and scalability to their overall sourcing. The company uses its manufacturing strengths to focus on enhancing product knowledge. The division works closely with the design team and the research and development team to understand trends, develop products, value engineer and finally create season wise collection that cater to regional tastes. The company has one central warehouse and 12 regional warehouses. These warehouses are located in Pune, Delhi, Ghaziabad, Nasik, Ahmedabad, Bangalore, Hyderabad, Gurgaon, Mumbai, Nagpur and Kolkata. In case of lifestyle retailing, the entire apparel stock is generally delivered to the central warehouse. The central warehouse then services individual stores. While they outsource intercity transport of goods to third parties, intra city movement form warehouse to the stores is handled by their own fleet of vehicles. For lifestyle retail formats, they use the services of logistic solution providers in order to deliver products on time to the stores. Warehouse operations have been streamlined through the standardization of racking system, scientific layouts and implementation of automatic replenishment system. The quality assurance function has been strengthened with the implementation of internal quality control measures. Quality hubs have been established at zonal level with a view to proactively prevent quality defects.

Assortment and Variety Pantaloons typically falls in the High Assortment High Variety quadrant. Mr. Anwar Ali Sheikh (ASM Pantaloons, Phoenix) states that although the assortment and variety in each of the categories is high, depth is emphasized upon in case of core merchandise categories such as mens formal wear, mens casuals and sportswear. Conversely, the typical fashion apparels and accessories are dominant on the Width front.

High Variety

Low assortment

High assortment

Low Variety

g) Services and Personal selling An organization my charge a high price for the high level of service it provides to the customers or it may charge a low price for a low quality of service provided by the same. High service Low Price and Low Service High Price aspects are not seen as they epitomize competitive failure. Concerning Pantaloons, the service is of a very high quality. The prices may be considered as medium to high depending upon the kind of product one wants to avail of. However as compared to the competitors, the company definitely has a distinct advantage in terms of pricing. A myriad of services are offered by pantaloons, some of them are discussed below: Payment Facilities Every shopper is allowed to make payments for their purchases by Credit Cards, debit cards as well as cash. All Major Credit Cards and Debit Cards are accepted in the store. Gift Packaging At the entrance of the store, near the Customer Service desk, there is a gift wrapping counter which provides the service of gift packing Alterations and home delivery If any alterations are to be made in the clothes purchased, the same is carried out at absolutely no cost. If the customer is a green card holder, the apparels are delivered at his/her place subject to certain conditions.

h) Human Resource In a business where individuals comprise the principal asset, the structure of the people pyramid influences the quality of knowledge captured, the speed with which decisions are made and the morale of the organization. Human Resource is one of the critical support functions and forms another key element of the corporate backbone. Pantaloons had 7,379 employees as on September 30, 2005. It is a very young and energetic organization with average employee age being 30 years. The company believes that service is the core philosophy and people are its most important resources. An attempt has always been to create an environment where the employees feel pride of being called Pantaloonians. Organisation Structure Pantaloons follows an inverse pyramid structure; as a result decisions are taken closest to the point of customer action. Sales executive are encoureaged to think customer first. They are empowered to run their respective departments like small business owners.

Recruitment and Selection Recruitment takes place through any of the following option or combination of these options: In-house data bank Walk-in advertisement Internal Referrals The selection processes are defined to evaluate the skill sets required for each job and also to evaluate the fitment to our various formats of retailing.

Training The company places special emphasis on the training of our employees to enable them to develop their skills to meet changing retail technology and to provide efficient and effective customer services. The Company has a well defined Learning & Development (L &D) team that is responsible for training at all the levels across the country. The L & D team focuses on primary and secondary research into various aspects of retail and assessment of training needs across Knowledge, Skills & Attitude areas at all levels. 'Prarambh' for Induction and 'Guru-School' for Trainer Development are a couple of programs created and disseminated by the L & D Team this year. The company is in the process of establishing a training centre at each zone that will be equipped with extensive and up-to-date facilities and which offers relevant training programmes. Retention Strategy Pantaloons strives to foster a feeling of well-being in its employees through care and respect. They have several structured processes including employee mentoring and grievance management programmes which are intended to facilitate a friendly and cohesive organization culture. Off-site activities are encouraged to improve inter-personal relationship. We also acknowledge the efforts exerted by the employees by Organizing an annual celebration called Pantaloon Day where they recognize employees who have shown exceptional talent, sincerity and dedication. Pantaloons have implemented an employee suggestion programme called Prerna wherein the employee can give their suggestions. Every quarter the best suggestion received per zone per format is awarded prize called Golden Cap. Conclusion and recommendations Pantaloons is the best bet in retail. The store has been well maintained in accordance with the latest demands of the consumers. However it still needs to focus on several parameters which are posing hindrances towards its growth so that the store can retain its current numero uno position in the lifestyle segment. The organization must strive for the development of new formats to facilitate a better shopping environment for its customers. It can be undoubtedly stated the company has well

planned retail strategies currently but these must be updated with the continuously changing environment so that it can sustain the competitive advantage.