Infiniti Retail gets Woolworths Wholesale

Post the completion of the transaction,Infiniti Retail,which operates the Croma retail chain will merge Woolworths Wholesale (India) Pvt Ltd with itself.

“Over the last six years we have had an excellent relationship with them and when they were exiting the business we were only happy to take over,” Infiniti Retail Ltd Managing Director & CEO Ajit Joshi said.

Woolworths Ltd had entered into a relationship with the Tatas in 2005 under which it provided wholesale support to Infiniti Retail’s Croma chain of electronic goods and durables stores in India.

When asked about the valuation of the deal,he said: “This will be AUD 35 million. Tata Sons has invested Rs 220 crore for this acquisition. The remaining portion of the funding will be used for our expansion.”

With the latest funding,Tata Sons’ investment in Infiniti retail has gone up to Rs 700 crore from Rs 480 crore earlier,he added.

As part of the acquisition,which is expected to be completed with a week’s time,Joshi said 93 employees of Woolworths Wholesale (India) will be on the rolls of Infiniti Retail.

“What we gain from the acquisition is that we will be getting trained people for sourcing. They were running seven warehouses for supplying to our Chroma stores,which will now be run by us,” he said,adding there would not be any retrenchment of employees.

Commenting on the development,Woolworths Wholesale India Pvt Ltd Indian Chairman Ramnik Narsey said: “Both parties entered into this venture with the intention of merging the wholesale and retail businesses once FDI regulations were relaxed.”

He added,”However,with our decision to exit the consumer electronics specialty store sector in Australia and New Zealand,we have now decided to sell the wholesale business in India to Infiniti.”

Infiniti Retail runs a chain of stores selling consumer electronics and durables across India under the Chroma brand. it has a total of 85 stores at present.

Australia’s Woolworths exits consumer electronics business

SYDNEY: Australia’s top supermarket chain Woolworths Ltd agreed to sell its Dick Smith Electronics chain in Australia and its Indian wholesale venture for a combined A$55 million ($56.88 million) under a plan to exit the consumer electronics segment.

Woolworths said private equity firm Anchorage Capital Partners will buy the Dick Smith chain for initial cash proceeds of A$20 million,compared with A$200 million expected by analysts last year when the plan was announced as a weak retail environment takes its toll.

Dick Smith chain recorded sales of A$1.57 billion and earnings before interest,tax and one-off charges of A$24.6 million,in financial year 2012,according to a stock exchange filing.

Woolworths will sell Woolworths Wholesale to Infiniti Retail Ltd,a part of Indian salt-to-software conglomerate Tata Group,for A$35 million,it said in a statement.

These businesses were a small part of Woolworths and this divestment will allow us to be fully focused on the core parts of our business,chief executive Grant O’Brien said.

Australian retailers have had a tough year,as frugal consumers spend less and fierce competition from nimble online retailers cuts prices,while a boom in the resource sector failed to provide a major lift to many other parts of the economy.

This is forcing retailers such as Woolworths,which operates supermarkets,department stores,liquor retail stores,hotels and home improvement stores,to focus on measures to protect margins and exit non-core businesses.

Woolworth said Anchorage will buy 325 stores employing 4,500 people and Woolworths said its restructuring provision of A$420 million in taken in 2011/2012 will not change.($1 = 0.9669 Australian dollars)