Mumbai (Maharashtra) [India], September 13 (ANI/Hunk Golden and Media): Suumaya Industries Ltd. (NSE Code: SUULD), an emerging diversified conglomerate group, through its 100% fully-owned subsidiary Suumaya Retail Ltd. has acquired a minority stake in the value retail chain startup Nysaa Retail Private Limited, which operates stores under the brand name 1-India Family Mart.
This investment will enable Suumaya Industries to strengthen its foothold in the women's ethnic wear segment in the smaller towns along with value retailing of men's and kid's wear in BCD towns or rural India, the two companies said in a joint statement today.
By gaining access to 100 + retail stores of 1-India Family Mart, this strategic partnership will help Suumaya Industries Ltd. increase its geographical footprint in tier-2, tier-3 and tier-4 towns in India. Besides, Suumaya Industries will also help 1-India Family Mart in developing its own private label in the fast-growing women's apparel category.
Ushik Gala, Chairman & Managing Director of Suumaya Industries Limited said, "Suumaya Industries (erstwhile Suumaya Lifestyle) has over three decades of experience in the textile industry and has well positioned itself as a highly creative brand for exquisite fashion and world's finest collection of Indo-Western Designer Kurtis for women. This collaboration will build on to each others synergy and make us more competitive in the industry. The 1-India Family Mart founders have more than 2 decades of rich experience in the retail industry and have seen the entire retail cycle. The investment paves the way for the potential of a wider strategic alliance between Suumaya & 1-India Family Mart. This acquisition offers the opportunity to work with them to reimagine the retail partnership and allows us to create newness and excitement for this dynamic customer segment. While it will give us an edge in the women's ethnic wear category, it will also fulfil large part of garmenting requirements of Nysaa Retail."
Value retail chain startup 1-India Family Mart is backed by private equity firm Carpediem Capital.
Jay Prakash Shukla, Co-Founder & CEO, 1-India Family Mart said, "We are well placed in the value retail sector in India. Amongst the Top 3 Value Retail companies in the Indian retail space with strong assortment of products and extensive presence in tier 2, 3 & 4 cities with over 100 stores pan India. Besides the private label products offered at stores, we have a strong back-end infrastructure including distribution centres. This will give a strong leverage to Suumaya Industries and boost their retail presence of the women ethnic wear as well as going to strategically help in building our women's ethnic private label portfolio of 1-India Family Mart. Suumaya is going to be a very reliable sourcing partner for us in other segments too such as men's and kids wear. We will soon be launching our festival season collection. The focus will be on smaller towns and talukas through the offline market which has huge potential."
The deal is a win-win as 1-India Family Mart can attract increasing footfall due to strong assortment of products offered at optimal prices with well calibrated store positioning. A high footfall conversation rate of 45%can be leveraged to expand Suumaya's market penetration. Suumaya's deep entrenchment in the women's ethic wear category will thereby enhance 1-India Family Mart's product portfolio.
India retail is valued at INR 51 trillion in 2019, growing at a CAGR of 9 - 11%.
An increase in the market share of value e-retailers has demonstrated better profitability and value creation within the Indian retail landscape. Value retail constitutes 60% of the overall apparel retail market. Growth in value retail is primarily driven by organised value retail.
With the rural per capita consumption growing at 4.3x by 2030, compared to 3.5x the urban area, trend shows that companies are also pivoting towards the bottom of the pyramid with a leaner cost structure. Value retail is also mostly insulated to online distribution as opposed to high-cost structures.
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