RIL retail ventures yet to enter profit zone

RELIANCE Retail (RRL) and Reliance Fresh, two subsidiaries of Reliance Industries in the retail sector, suffered losses as the textiles-to-oil major sought to build market share and expand its presence in one of the world's fastest growing economies.      According to data available in RIL's consolidated balance sheet, RRL has incurred a net loss of Rs 20.2 crore in the financial year ended March 2009, compared to Rs 0.82 crore in 2007-08. Revenue came down to Rs 622.3 crore from Rs 1,486 crore. The company posted a net loss of Rs 10.9 crore on total earnings of Rs 259.9 crore in the first year of its commercial operations during2006-07. The decline in topline in the fiscal 2008-09 was entirely because Reliance Fresh, earlier a part of Reliance Retail, now operates as a separate subsidiary of RIL.      Reliance Fresh reported a loss of Rs 249.3 crore on total income of Rs 1,778 crore during 2008-09, according to the annual report of RIL. The combined topline of the two subsidiaries, at Rs 2,400 crore, represents a growth in excess of 60% over the 2007-08 figure.      "Our retail operations, during the previous fiscal year, have expanded as per our growth plans and we added around 400 new stores last year, taking overall store count to over 900. During the same period, we also expanded our operations to 50 new cities, and launched new speciality formats increasing our overall area under operations to 4.2 million sq ft. We are still in our growth phase and our initial investment into the business has already started demonstrating results. We have been prudent in our investments and will continue to expand while further strengthening our existing businesses during this year," said an RIL spokesperson in an e-mail reply to a query by ET.      piyush.pandey@timesgroup.com