Aditya Birla Group to expand apparel retail business, invest Rs.400 crore on Peter England brand

The Group also plans to invest Rs.9000 crore ($2.14 billion) in its retail business, aiming to become a market leader

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Birla also plans to invest Rs.9000 crore ($2.14 billion) in its retail business, aiming to become a market leader.

Currently, the group has 550 food and grocery stores and two big-format, recently-launched hypermarkets under brand name More. This is expected to double by the year-end.

"We want to be amongst the first three in the country. The formats will be decided accordingly and sales will also come accordingly," said Birla.

While organic growth has not been ruled out, partnership with an international retailer is not an option, he said.

Aditya Birla Retail's More competes with other retail chains like Future Group's Big Bazaar, RPG Group's Spencer's and Reliance Industries' Reliance Mart.

India's booming retail market, estimated at about $300 billion, is growing at a brisk pace of 30 percent per annum, driven by rising middle class incomes and an increase in demand for branded products.

Largely dominated by more than 15 million unorganized retail stores across the nation, organized retailing, selling through company-owned network stores, remains a rarity, currently totaling about $8 billion or less than 5 percent of trade in the country.

However, according to AT Kearney, revenues from organized retail are expected to triple to about $ 24 billion by 2010, a reason why retail giants like US-based Wal-Mart Stores Inc., Germany's Metro AG, France's Carrefour and UK's Tesco Inc. are exploring ways of entering the fast growing market.

Indian rules currently allow 51 percent foreign direct investment (FDI) in retailing by companies that sell only a single brand like Reebok, Nike, Nokia or Benetton or Mark & Spencer (which recently finalized a joint venture with India's Reliance Industries).

On the other hand, multi-brand retailers, such as Germany's Metro AG or US-based Wal-Mart Stores Inc. (which has entered into a wholesale business tie-up with India's Bharti Group) are only permitted to run cash-and-carry or wholesale operations or to offer backend support to Indian retailers.

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