Mumbai: Reliance Retail is temporarily shutting down stores in its department chain Centro to reposition the format with mostly its own brands and labels it has launched in India as a licensee partner.

In September 2022, the retail division of Reliance Industries had converted Future Group's Central into Centro in locations where it had taken over the lease after the Future Group surrendered the property to it.

Reliance Retail has shut three stores and will shut another two dozen doors by the end of the month, according to executives of companies which have been asked by the country's biggest retailer to take back their inventory and fixtures citing renovation and repositioning of the format.


"RRL (Reliance Retail) has decided to temporarily pause operations of all its Centro outlets across the country as part of the remodelling process," it said in a letter to the brands, a copy of which was seen by ET. "Display, storage, and sale of the merchandise shall be paused at the outlets. In view of the imminent hiatus of operation of the outlets, you are hereby required to arrange for the removal of all goods, merchandise, stocks, promotional materials, or any other items belonging to you which are at present, deployed at the outlets."

While it is still not clear whether Reliance Retail will house existing local and global brands once the stores reopen, the idea is to utilise the space for its own brands as a shop-in-shop model. The retailer has either partnered or acquired around 80 overseas brands from Gap and Superdry, besides having its own brands such as Azorte and Yousta.

Centro, which sells about 450 local and global brands, competes with Dubai-based Lifestyle International and Raheja's Shoppers Stop in the department store format. India's retail sales expansion slowed to 4% last year after a surge in spending across segments-from clothes to cars-in the post-Covid-19 period, triggered by revenge shopping.

Last month, Reliance Retail, which runs about 18,946 stores spanning grocery, consumer electronics and apparel, reported a 3.5% decline in revenue from operations for the three months to September. It said weak demand in the fashion and lifestyle business and calibrated approach to improve margins in its wholesale business hurt revenue, the first instance of a revenue decline for India's biggest retailer except during the pandemic when government restrictions forced the company to shut stores temporarily.

"While the overall macro context remained weak and we had degrowth in the business on the apparel, apparel and footwear side, the fundamentals remain strong. We are investing in technology to improve our design to shelf cycle, we are improving our design capabilities so that these will help us continue our market leadership over a longer time frame," Dinesh Taluja, chief financial officer at Reliance Retail, told analysts last month.

Reliance Retail has also slowed down expansion and sharply increased store closures this fiscal, resulting in only 110 net store additions in the first half of the fiscal though it opened 795 stores.

This means store closures exceeded store openings by more than six times. In the year-ago period, it reported net store additions of 610 outlets when it had opened 1,026 stores.