Ebony departmental store chain shuts its operations

NEW DELHI: Ebony, a department store chain launched in 1994, has shut its operations to become the latest casualty among a string of modern retailers that have gone bust since the economic slowdown in late 2008.

Ebony Retail, the retail division of Delhi-based construction and infrastructure group DSC Group, is already facing winding-up petitions - which seek compulsory liquidation of a company - from some vendors, a person with direct knowledge of the development said.

A spokesman of DSC Group, however, said the company has shut down Ebony department stores to focus on its furniture joint venture with France's Gautier.

"Over the last three years we have gradually reduced focus and shut down Ebony Retail department stores and set up Ebony Gautier specialty retail format stores across the country," he said in an email reply to ET queries.

He said the company has cleared most of the outstanding payments of vendors barring some disputed ones. "These are sub judice and we would obviously adhere to whatever decision the court comes to in due course of time," the spokesman said.

Ebony Retail is the latest in a growing list of fallen modern retailers.

GHCL Ltd's Roseby home furnishing chain folded its operations earlier this year. Discount retailer Ess Aay Fashion India, which owns Allen Cooper apparel brand, is closing stores and facing recovery lawsuits from vendors.

Mumbai-based Wadhawan Group's grocery chain Spinach, India Rama Group's stationery chain Super Store 1, the local franchisee of US My Dollar Store Inc, and Chennai-based discount store operator Subhiksha Trading Services are among retailers that have folded up their operations. Until the economic slump hit the business in recent years, the $3-billion DSC Group was bullish about the business prospects of Ebony, which operated department stores in Delhi, Chandigarh, Ludhiana, Amritsar, Jalandhar and Faridabad.

The company spokesman said the plan to exit department store business was made some four years ago.

"Three to four years back the group researched the Indian retail market and came to the assessment that consumer preferences and business growth lay less in general format retail but more in specialty retail formats focusing on a specialised vertical," he said.

Ebony Gautier currently operates about six specialty furnishing and home accessories stores in Noida, Gurgaon, Chennai, Bangalore, Hyderabad and Faridabad.

A person with direct knowledge of the company's thinking said the group was bullish on department stores till recently. During the launch of the Ebony Gautier store in Noida in December 2007, company officials had termed the foray as an expansion into specialty retailing.