Reliance Retail has announced the temporary closure of its Centro stores across India as part of a strategic move to revamp its department store format. According to a letter sent to partnered brands, the company has paused the display, storage, and sale of merchandise, asking brands to retrieve their inventory and fixtures.
The remodeling is intended to prioritize in-house and partner brands, such as Azorte, Yousta, Gap, and Superdry, through a shop-in-shop model. However, the future of the 450 local and global brands currently sold remains uncertain.
Background of Centro Stores
Centro was established in September 2022 after Reliance Retail converted locations previously operated by Future Group’s Central stores. The revamped format competes with other department stores like Dubai-based Lifestyle International and Raheja’s Shoppers Stop.
Challenges in the Retail Segment
India’s retail market growth slowed to 4% last year, following a surge in post-pandemic consumer spending. Reliance Retail, which operates 18,946 stores across various categories, reported a 3.5% revenue decline in its apparel and lifestyle business for the July-September quarter. Weak demand and a focus on improving margins in the wholesale segment contributed to this decline.
The company has also significantly slowed its retail expansion, with store closures exceeding openings by more than six times during the first half of this fiscal year.
Future Prospects
Despite these challenges, Reliance Retail’s CFO, Dinesh Taluja, expressed confidence in the company’s long-term growth, citing investments in technology and improved design capabilities as measures to strengthen market leadership.
The remodeled Centro stores are expected to align with Reliance Retail’s broader strategy to leverage its in-house brands and strengthen its position in India’s competitive retail landscape.
