Future Retail up 11% on roll out of new plan Tathastu; Edelweiss maintains buy
Future Retail gained over 11 percent intraday on Wednesday as investors reacted to the firm’s new plans for its retail business.
The company plans to launch a new digital model it calls Retail 3.0 which will blend technology with brick and mortar retail. The new avatar will be called Tathastu. These retail stores will enable online shopping for consumers.
“It is a model called Tathastu . This will help you get anything you want at our Easyday (department) stores,” said Kishore Biyani Founder and CEO, Future Group.
The company aims to open 10,000 such stores by 2022. Initially, the company will start off with 1,100 stores in FY18, Biyani said.
“The new digital world is something which we want to be a part of. We will be taking the help of Google Inc to look at property sourcing only through technology. We want to be trillion dollar consumer business in India by 2047,” Biyani said.
Giving a few statistics, Biyani said 98 percent of retail in India takes place in physical stores.
Future Group will be opening retail stores every 2 km which will offer discounts to those living in that radius, where consumers can become a member of the store.
Biyani added that each brick and mortar store would have 2,000 members.
Broking firm Edelweiss is upbeat about the stock and maintained a buy call with a target of Rs 628. “Its strategy is to address the issue of high logistics cost and prohibitive acquisition cost in e-commerce via proximity of physical stores to customers (within 2km radius) and loyalty programmes (10% discount on all products),” the brokerage said in its report.