labels: M&A, Toys
Spencer's partners UK-based Woolworths for Chad Valley toy retail brand news
09 June 2008

Mumbai: RPG group's retail arm, Spencers, is tying up with international toy retail chain, Chad Valley, owned by £3-billion UK-based Woolworths plc.

Woolworths' already has a partnership with Tata Group's consumer electronics chain Croma.

Spencers Retail will introduce the range both through both stand-alone exclusive stores and shop-in-shop formats, within the Spencer layout. Chad Valley is a key toy brand in the UK, with a history dating back to 1860.

RPG group's Spencers is primarily been into food and grocery, and industry sources say this venture is a foray into other formats. Additionally, industry sources say that there is possibility for another joint venture with a US-based bakery chain, and deals with two international apparel brands.

According to company sources, Spencers Retail will see partnership deals with three foreign companies over the next few months, across different formats, and could even be equity joint ventures or exclusive tie-ups. Spencer's Retail is look at a turnover of around Rs1,800-Rs2,000 crore during the current fiscal, and plans to double its retail space from the present 11-lakh square feet to 22-lakh square feet by March 2009.

It has 17 hypermarts in operation, and has plans to add another 14 during the current fiscal. In total, the company plans to add around 300 stores, having invested Rs1,000 crore, and with another investment of Rs1,800 crore lined up for the next 18 month period.

The organised market for toys is still nascent in India, and Chad Valley is optimistic about attaining a growth of 50 to 60 per cent on a year-on-year basis. Woolworth's Ladybird range of kids wear apparel is expected to be introduced in India by September 2008 as part of its arrangement with Spencer's.

Chad Valley Toys cover children's toys ranging from newborns to the age of 10. It offers over 500 items, and adds new toys frequently. Chad Valley's range will be priced starting at Rs49, will be available across 400 Spencer's stores located across 35 Indian cities. Chad Valley will have a presence in almost all Spencer's outlets in India, alongside standalone stores that will come up within the next 12 – 18 months.

Woolworth's has sales in the UK at around $5 million, and is looking to generate similar business volumes in India as well. Spencer's says that data from the 2001 census shows that of 1 billion Indians, 16 per cent were children below seven years of age, while another 19 per cent were in the seven to 14 years of age category. Coupled with the largely unorganised state of the business in India, it represented a promising line of business in India.

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Spencer's partners UK-based Woolworths for Chad Valley toy retail brand