The announcement by Reliance Retail that it has acquired Shri Kannan Departmental Store (SKDS) is seen as an inspiration to regional retailers and also as an indication of the consolidations happening across sectors.
According to Kumar Rajagopalan, Chief Executive Officer of Retailers’ Association of India, such acquisitions will create new opportunities and inspire regional retail brands.
V. Lakshminarayanaswamy, president of the Indian Chamber of Commerce and Industry, Coimbatore, Reliance probably found this as an opportunity to expand its retail presence in the State. This is also an indication that consolidations have started happening across sectors - manufacturing and retail. If there is a good value chain and a sustainable model, acquisitions happen, even in the retail sector. However, this can also mean that such consolidations will force small-scale traders to build their own unique models to sustain. They are already facing challenges due to increasing online trading and consolidations will add to their challenges, he said.
President of TiE Coimbatore Hemalatha Annamalai said, “This goes to prove that even unconventional regional businesses can attract national players.” Such acquisitions are an opportunity for entrepreneurs to try new initiatives.
According to the website of SKDS, it was started in 1985 as Sangeetha Shopping Centre, a departmental store, in Erode. It was developed into a mega departmental store in 1999 under the name Shri Kannan Departmental Store. It has branches in several cities, including Pollachi, Tiruppur, and Karur.
Sources in the retail sector said the acquisition only shows that there is lot of scope for growth of retail sector if value is created, even in smaller cities. These activities give scope for new dimensions to consolidation and regional retail brands should look at creating value.