V Mart targets cultural shift at UNLIMITED

V Mart, one of India’s top retail chains by number of outlets, said it will bring the newly acquired UNLIMITED stores under its flagship brand and retarget these shops at extremely value-conscious buyers who find most pan-India chains too expensive.

V Mart, like Mumbai’s D Mart, is fanatically focused on getting goods in the most efficient way possible from the factory to the consumer. It is therefore known for avoiding all kinds of frills in favor of a conservative approach, to deliver low prices.

V Mart Chairman Lalit Agarwal said his company remains conservative in its business approach, even after the acquisition.

“But too much of conservatism also doesn’t help,” he noted. “Ultimately, there’s a large opportunity… we have been growing at 25% every year. But there’s a step-up we needed to take.”

V Mart, like D Mart, focuses on both fashion retailing as well as staples. When the company said that it was acquiring 74 outlets from garment manufacturer Arvind Fashions for around 150 cr earlier this week, many investors were surprised, given the the gap between the positioning of UNLIMITED and V Mart.

The timing was also surprising, given that questions are being raised about the very viability of brick-and-mortar organized retail in a post-pandemic world.


Speaking to investors, Lalit Agarwal sought to assuage some of those concerns, and reassured them that the hard-nosed conservatism that has been a hallmark of V Mart continues to guide the company.

The acquisition of UNLIMITED, he assured them, was not aimed at blindly adding bulk to the company or diversifying away from value retail.

He said V Mart, which operates 282 stores in Northern and Eastern India, has not been able to expand its footprint as expected in the last two years because of the pandemic, and this deal allowed it to rectify the situation without compromising on the ‘cluster model’ of expansion. Under the cluster model, V Mart does not open isolated stores in areas where it has no presence.

The UNLIMITED chain, originally called MEGA MART, is tightly focused on the four southern states of Karnataka, Tamil Nadu, Andhra Pradesh and Telangana, which account for 66 of the 74 acquired stores.

Prior to the expansion, said Lalit Agarwal, V Mart was planning to expand organically into Andhra Pradesh, given that its cluster network had already reached the southern tip of Odisha.

However, the deal offered a way to acquire 74 shops at roughly the same cost without paying a premium. V Mart currently spends Rs 2 cr for opening a new store, including 1 cr in capital expenses and Rs 1 cr on stocks.

“We have always been focused on our built-up model, we always believed that we would build up all this…,” he said. “This acquisition allows the company to acquire 74 existing stores in a new territory at a very similar cost.”


UNLIMITED, which was started as MEGA MART when the organized retail revolution was starting in India 20 years ago, has always found the going far from smooth.

Despite expanding aggressively, the team at Arvind Fashions were never able to turn the business around, with the pandemic making an already bad situation worse.

Agarwal, however, is undaunted, and said the problem seems to have been the ‘brand focus’ that Arvind Fashions brought to it. Arvind owns local rights to some of the top clothing brands in the world, such as GAP, US Polo and Arrow.

Agarwal said his team had been studying the chain for almost two years.

“We found that the team at Arvind, which is primarily a brand house, had a very good understanding of fashion, a very good understanding of products and fabrics, but somewhere, the whole culture in the organization was more brand-oriented.”

The way their stores, and even their offices were laid out, were all brand focused. Because of this, he said, Arvind struggled to “drive value through the ethos of value retail”.

At the same time, he said, there were certain very attractive things about the UNLIMITED chain, such as “the locations that they had, the kind of team that they had, the kind of business model they had built,” he pointed out.

Post-pandemic, the valuations too seemed to make sense, as the team realized that V Mart would need to spend just as much if it had planned to set up 74 new stores in these cities.

“..This time, when we talked, we understood that it is coming on our terms and the way we look at a new store, the kind of investment we make in a new store, we wanted to do it like we do a new property. That’s how we have taken it right now,” he noted.

As a part of the deal, V Mart is acquiring only new inventory, which can be sold. Moreover, Agarwal added, there was almost no overlap in the footprints, except in Surat, where both companies had their own shops.


The next step, Agarwal said, would be to bring the team and the operations at UNLIMITED in sync with the “mass premium” strategy and the value-obsessed ethos of V Mart. As a part of this, the existing UNLIMITED stores will be rebranded to V Mart stores.

“There is a lot of value-driven culture that has to come in,” he said. “There will be change in assortment, there will be change in merchandise. There will be some change in the way the whole store is looked at.

“From what we understand, UNLIMITED has always looked at the store from a brand perspective. So, they’ve always focused on private label brands, and the whole display and the whole philosophy of retail was primarily around brands.

“What we think is that value retailing is largely about price, MRP, assortment, size, customer persona. Those are the fundamentals that we bring in. Customer centricity is the key thing that we drive.”


Another key change would be to attract the extremely value-conscious customers to these stores — the same demographic that makes up for V Mart’s loyal customer base in North India.

These are the customers who do not shop at outlets like Reliance Trends or MAX, he pointed out, as they find the products too expensive there.

“The 30% gap that V Mart has, vs a Max or a Trends, will make a lot of difference to the customer base that we will be catering to,” he said.

“We will be searching for those customers who have been our loyal customers, who understand the V Mart brand. We will take the same effort to try and understand their culture, their requirements, their pain, and their value orientation, which will attract them to buy from our stores.

“It may take some time. We take this asset not for one or two or three years, but we look at this at least from a five year perspective.”


As part of increased customer centricity and value, the focus will be on the concept of prudence and thrift.

“Prudence is another value that is very important to us,” Agarwal said. “Prudence is something that is required by our customers. We are there because of our customer, and we will deliver what our customer wants, and our customers can’t spend too much of money [unnecessarily].

“The way we operate — both our vendor-base, as well as our product picturization and even our operational parameters, have to be very prudent. That, is how we feel, values could be driven.

“Once we are able to sustain and give value to our customers and our customer realizes it, it will be the same customer loyalty that we will attract as we keep attracting in the Hindi heartland,” he said.

These changes, he said, will not be introduced overnight, and things will continue largely as they were until the festival season (Oct-Nov) is over.