November 14, 2024

Mukesh Ambani and Isha Ambani Shake Up Retail: Reliance to Temporarily Close Centro Stores in Major Strategic Overhaul

Reliance Retail’s Bold Move Signals Shift Toward In-House Brands and New Retail Formats

Reliance Retail, led by Mukesh Ambani and Isha Ambani, is making headlines with its decision to temporarily shutter several of its Centro department stores in a move aimed at reinventing the brand’s market positioning. The strategy, first reported by The Economic Times, involves a shift toward promoting Reliance’s own in-house brands and adopting a shop-in-shop model.

This bold restructuring comes on the heels of Reliance’s rebranding of Future Group’s Central stores into Centro in September 2022, signaling a fresh vision for the retail giant.

Revamping the Centro Chain

Reliance Retail has already begun the process, closing three Centro locations, with plans to close an additional 20 stores by the end of this month. According to the report, Reliance has instructed partner brands to retrieve their inventory and displays from the affected outlets to facilitate comprehensive renovations.

Brand partners received formal communication advising them to clear merchandise, promotional materials, and equipment as the Centro stores undergo this significant transformation.

Shift to Reliance’s In-House Brands

The redesigned Centro outlets are expected to prioritize an expanded range of Reliance’s own brands, including Azorte and Yousta, and a curated selection of international names like Gap and Superdry, with whom Reliance has forged strategic alliances.

While details remain sparse, the revamped stores may reduce their roster of third-party brands, honing in on Reliance’s in-house offerings to strengthen brand identity and improve margins.

Centro’s Competitive Standing in the Market

Centro currently competes with popular department chains such as Lifestyle International and Shoppers Stop, hosting products from over 450 domestic and international brands. However, while the post-pandemic period has seen a boost in consumer spending, Centro’s growth last year lagged at just 4%, underscoring the challenges within the sector. Reliance’s restructuring move could address this stagnation and leverage the company’s formidable presence in the Indian retail landscape.

Reliance Retail’s Revenue Dip and Market Realignment

In the most recent quarter ending September, Reliance Retail reported a 3.5% dip in revenue—marking the first drop in years, outside of pandemic-impacted quarters. This decline has been attributed to sluggish demand in the fashion and lifestyle categories and a strategic shift in focus toward higher-margin segments within its wholesale business.

The Centro overhaul is seen as a timely response to these market shifts, positioning Reliance Retail for a renewed growth trajectory in the evolving Indian consumer market.

Gallabharo@123

Updated November 14, 2024