Home Retail Vishal Retail to trim down its operation to cut costs

    Vishal Retail to trim down its operation to cut costs


    Hit hard by the economic slowdown, today said it will relocate stores, hive-off unviable formats and merge warehouses as part of cost cutting measures.

    The company also said it has already closed factories except one as it will be outsourcing manufacturing operations, and has also decided to exit from its alliance with HPCL.

    “The company plans to espouse measures like reposition, reconsolidation, hive-off nonviable business formats/business line to reduce the cost and give away with the ineffective outlets,” Vishal Retail said in a filing to the stock exchanges.

    The company also plans to take measures like reposition, relocation, consolidation, hive-off and non-viable formats to reduce costs.

    It has merged some of its stores located in Delhi to nearby stores to achieve economies of scale. It has also made similar arrangement for the stores located in Agra and Lucknow in UP and in Karnal, Haryana. The company is also planning to merge some more stores in other parts of the country.

    “The company has mutually decided to discontinue the non-viable format entered with oil marketing firm HPCL and other business associates,” it said.

    The multi-format retailer has 187 outlets across the country, including hypermarkets and small stores. The company said it is also focusing more on its core competencies such as retailing and has taken steps such as outsourcing of manufacturing operations to reduce costs and “resultantly has also closed down all its manufacturing facilities except one at Manesar”.

    Company officials were not immediately available for comments and details of the number of factories closed could not be ascertained.

    Vishal Retail also said it has regional warehouses with central warehouses at Delhi and NCR while it has identified a nearby warehouse to consolidate all warehousing operations at the central level except few regional warehouses in East and West Zone of the country.

    To meet FMCG demands the company said it has entered into back-end agreements with regional suppliers, who would directly meet its requirements at the store level.

    “This will enable us to cut down inventory hoarding cost, logistic cost and thus to reduce the overall expenditure and also meet the demand of customers,” it said.

    Source: Mint