Infinity Retail in sourcing pact with Videocon

NEW DELHI: The Tata group’s consumer durable retail venture, Infiniti Retail, is learnt to have signed a sourcing agreement with consumer electronics major Videocon for its proposed private labels.

Videocon Industries chairman and managing director Venugopal Dhoot confirmed having signed an agreement with Infiniti Retail. “We have signed an agreement with Tatas to supply them consumer electronics for their private labels, similar to our agreements with Pantaloon and Reliance.”

However, Infiniti Retail chief executive officer Ajit Joshi, denied the development. “We have not entered into any alliance with Videocon. We don’t have any private labels right now and until we build sizable mass, we won’t be introducing them,” he said.

Under the agreement, Videocon would supply a range of goods to Infiniti’s Croma stores, including colour televisions, air conditioners, washing machines and DVD players, which will be sold under the Tatas’ private label.

Infiniti Retail, a 100% subsidiary of Tata Sons, has a technical and sourcing agreement with Australian retailer Woolworths under which it will own and run the retail operations in India, while Woolworths will provide technical support and strategic sourcing facilities from its global network.

Videocon has similar arrangements to supply consumer electronic goods to Reliance and Pantaloon for retailers’ private label businesses.

According to sources, Infiniti had initially planned to do all its sourcing for its private labels from China but due to high freight rates, it could be re-looking at that strategy, with Videocon likely to become its major vendor in future.

With the deal with Reliance, Pantaloon and Tatas in place, and similar deals likely in the future, it also marks an interesting diversification in terms of business strategy for Videocon. “Private labels would account for about Rs 900 crore worth of business for us in the fiscal 2007-08,” said Mr Dhoot.

mayur.jha@timesgroup.com