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Cellucom India's promoters will now get a 26% stake in Spice Group's mobile retail venture Hot spot. The group plans to invest Rs 100 crore (Dhs80m) in the retail venture this year to fuel growth plans and expand operations across 100 cities in India. While Hotspot has 470 stores in India focussing mainly on the mass market, Cellucom India has 117 stores, mainly focused on the "A" and "B" segments of the market. The New entity is expected to grow to about Rs 900-1000 crore (Dhs650 - 750m) in revenue by fiscal year 2009.
Expressing his delight on the joint venture agreement Mr. Arun Nagar, Founder, CEO & MD Cellucom said,
"The mobile and technology product retail business in India is growing at a fast pace and holds tremendous potential. The merger between Cellucom India Retail Pvt Ltd and Spice Group is a significant development for Cellucom India. The company would benefit from Spice Group's substantial presence in the field of telecom, their professional expertise in managing large businesses through strategic initiatives and the extraordinary vision of its Founder and Chairman Dr. B.K. Modi."
He further adds, "Hotspot Retail also stands to benefit from an expanded footprint through the Cellucom stores, which aptly complement Hotspot by addressing a different customer segment and a wider product portfolio through the addition of laptops and I.T. accessories."
Additional synergies would be achieved through better merchandising, a stronger supply chain, and efficient management of Human Capital. The economies of scale offered by this merger will enable more aggressive marketing and promotions to make a stronger customer proposition.
Posted by Rima Ali Al Mashni
