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Shoppers Stop's expansion plans for the next financial year (2014/15) are very much on track.

The lifestyle retailer is planning eight new stores in the forthcoming fiscal (2014/15), but in the following fiscal (2015/16), the plan is to open only around three-to-four stores. The company, however, will tighten its belt with regard to its focus on several of its not so well-performing categories. Managing Director Govind Shrikhande says there are plans to seriously relook at some of Shoppers Stop's businesses, such as fine jewellery and electronics. The jewellery business' lacklustre sales due to restrictions on gold import and the increases in gold import duty has, in fact, had an adverse impact on the third quarter (October to December 2013) results of Shoppers Stop. It reported a net profit of Rs 17.34 crore, slightly higher than Rs 17.10 crore in the year ago (October to December 2012) period. Gross revenue rose 16 per cent to Rs 787.5 crore for the quarter ended December 31, 2013. The company, however, expects the current quarter to fare better than the third quarter. "We have already curtailed the size (of the jewellery business) because we are seeing very clearly that this category may not come back very strongly for at least another year or two," said Shrikhande, adding: "We will, instead (of jewellery), focus on the beauty and personal accessories divisions." He also said that HyperCITY, Shoppers Stop's hypermarket format, is likely to turn profitable over the next 24 to 27 months. HyperCITY, which currently has 15 stores, will benefit from an increase in Shoppers Stop's focus on the fashion division and store consolidations, along with its move away from "non productive or non profitable categories" such as electronic goods. The company has taken the share of its fashion business to 13 per cent, and plans to take it to 15 per cent in the coming year, as that would directly impact the profitability of the business. With this move, Shrikhande expects a 50 basis point margin improvement in the HyperCITY business. "For two quarters, you will still see losses continuing in a similar vein, but the second half of next year onwards will see us moving towards profitability," said Shrikhande, adding: "We have started getting out of electronics and by the end of the fourth quarter, we should be out of electronics completely." There will also be a move towards smaller format stores, along with rightsizing some of the larger format HyperCITY stores. "We're clearly seeing that small format stores can turn around or start making money within 12 to 18 months versus 36 to 48 months required for a big format store," said Shrikhande. The company, which has already reduced its store sizes in cities such as Amritsar and Ahmedabad, will now resize its store in Hyderabad and the ones at Vashi and Malad in Mumbai.

I hope that the policies which are not initiated make things worse. I would definitely urge policymakers to look at what the ecosystem will do in terms of new players and new categories coming in and that the impact will be much larger than the impact of the FDI only into retail. consumer durables. Especially during the festival season. you always look at a 10-15 year horizon.The retail sector has been buzzing on the news of Foreign Direct Investment in multi-brand retail being seriously considered by the government. Q: There is a lot of growth slowdown that is being talked about.� The industry has witnessed many companies� margins taking a dent due to high inflation and discount sales during the festive season. �I wouldn�t say there is a very big slowdown but there is a very relative slowdown compared to what was happening earlier. In an interview with CNBC-TV18. BS Nagesh the Vice Chairman of Shoppers Stop said. in the home segment. I am looking forward to these changes happening. Below is an edited transcript of his interview. Q: With the slowdown in the lifestyle segment of Indian retail. the owner of the brand will push away some of the prospective buyers from this space? A: It will depend on case to case because most of the players who are going to enter will be brand owners only because India is a long-term play. you have the green movement and their way of looking at suppliers and lot of suppliers are likely to set in factories. Similarly when a large retail player from international shores comes in. he brings in the full ecosystem whether it is training organisation. for more. electronics. I don�t see a major issue and if it goes into 100% then the . that part of the business did well because there is a lot of consumer shift happening. one has seen a down trading by the consumers. How are you sensing things in the retail space? A: In the last threefour weeks. the whole ancillary that they have developed has helped the new players to come and establish. Here also whether you are a single-brand or a multi-brand you would have to look at 10-15 years. people don�t down trade on food because they look at it as an essential. do you suppose that also holds true for the luxury segment? A: I will not be able to comment on the luxury segment because it�s still a very small segment. During the festival season. fit outs. We have also seen that people have down traded on lifestyle apparels although we have not seen down trading as of now in the food segment because people have continued to shop. When you look at the Maruti story. That is very positive. Anywhere when you enter a country. Q: What are your thoughts on FDI in multi-brand retail? Is that a likelihood? How significant will it be to change the landscape of Indian retail? A: As far as the likelihood is concerned you would have a better idea because we have been hearing it out of the media only. As far as the impact is concerned � Everybody is looking at the impact only with few retailers coming in but the impact will also be in the ecosystem and the parallel should be drawn with the auto industry. As far as the lifestyle segment is concerned. however. I wouldn�t say there is a very big slowdown but there is a very relative slowdown compared to what was happening earlier. I have always been a proponent of FDI in retail and I still support it. Q: What about the new clause that�s been added to the FDI in single-brand retail. in hard furniture you will see a slowdown because home buying has slowed down due to the interest regime. they have down traded on the price and this is more so in the lifestyle products rather than in food because in food we are still seeing trading going on fairly strong. So it has to be an investor and a brand owner who will come together. Do you suppose that now with this additional clause. it has not been a great festive season for many players in the retail industry which witnessed a slowdown. On the other hand. there are two-three areas for example. We have seen that the consumers have probably bought the volumes that they wanted.

00. at 11:17 hrs Shoppers Stop was quoting at Rs 370.39 percent. Read more at: http://www. we have seen an increase in raw material prices and competition is also heated up quite a bit.90 and the 52-week low was Rs 317. We do expect many players in the industry in the apparel segment may have to go into discounting because of a little slowdown relatively.true owners will come in and maybe they will have partnership with Indians who will help them establish the market because of the complexities of the market. Given that inflation is very high. The stock's price-to-earnings (P/E) ratio was 69.81. the second margin impact is also because of non-food price sale that has taken place. get growth on the basis of self cannibalisation because they want to capture market opportunities to gain share. one margin impact is because of inflation.41 per share.70. So as much as all of us appreciate growth. Trent fall short of analysts’ expectations . I don�t expect margin growth from here until and unless somebody has overstocked himself for the season and underperformed in which case they will have to again go into discounting. At current value. we forget that players who are existing. The 52-week high of the share was Rs 453.30 per share as per the quarter ended December 2013. Q: We have seen the margins of many of the retail players come down over the past few quarters. Are companies likely to live with these lower margin scenarios? A: There are two kinds of margin impacts. The latest book value of the company is Rs 83.html?utm_source=ref_article Shoppers Stop. Shoppers Stop stock price On February 11. Other than that I don�t see the margins squeeze going forward for the industry. or 0. down Rs 1. 2014. The discount sales during the year have gone up and the last impact is also because of self cannibalisation.moneycontrol.44. The company's trailing 12-month (TTM) EPS was at Rs the price-to-book value of the company is 4.

Photo: Priyanka Parashar/Mint Updated: Wed. which operates large-format department stores and speciality stores such as Crossword and Mothercare. group firm.32 crore a year ago.32 crore a year ago.6 crore. grew 13% to Rs.578. On a standalone basis.441.07 crore in the June quarter from Rs. A Bloomberg poll of eight analysts had estimated standalone net profit at Rs. However. Raheja Corp. grew at 20% to Rs.1.07 crore in the June quarter from Rs. which accounts for nearly three quarters of the consolidated revenue.98 crore and revenue at Rs. Shoppers Stop reported a consolidated loss of Rs.1. the retailer who runs the eponymous department store chain.441. missed analysts’ earnings expectations even as they improved their financial performance from a year earlier.866 crore. helped by the strong wedding season in May. grew at 20% to Rs. 12 34 AM IST Mumbai: Shoppers Stop Ltd. which accounts for nearly three quarters of the consolidated revenue.5. and Tata Group’s Trent Ltd.1 crore for the quarter ended 30 June. the standalone numbers missed analysts’ estimates. which operates Westside and hyper market chain Star Bazaar. Consolidated revenue for the K. burdened by its money-losing hyper market chain HyperCity.537. India’s oldest department store chain. more than doubled its standalone net profit to Rs. . Jul 31 2013.6 crore.537.Standalone revenue for Shoppers Stop. Standalone revenue for Shoppers Stop.

76 crore a year ago. M. Also. Over the past year.253. real estate. It is also higher than the estimates the company has given for fiscal 2014 at 8%. The appointed date of the merger will be 1 April with retrospective effect.24.228. Ltd by way of a slump sale to its wholly-owned subsidiary Gateway Multichannel Retail (India) Ltd for Rs. subject to approval. managing director of Shoppers Stop.1 crore for the June quarter for Trent.75 crore in the same quarter a year ago. vice president. for Shoppers Stop stood at 12%.Fiora Link Road Properties Ltd and Trexa ADMC Pvt.3 crore for the closure of a store in Ludhiana. During the June quarter.650 crore. Meanwhile. Elsa runs the cosmetics business of Estee Lauder.63. .A. “This is just a provision. it closed one store and is also considering exiting from the consumer durables and Information Technology (IT) products business division in the next 12 months. Shoppers Stop said it got shareholders’ approval for the transfer of business done by Elca Cosmetics Pvt.12.Trent reported a net profit increase of 36% in the June quarter to Rs.35 crore a year ago due to a write-off of Rs. “sustaining the momentum will be a challenge. However he added.252. A Bloomberg poll of three analysts had estimated net profit at Rs.17.33 crore on sales of Rs. “It is good to see the like-to-like sales growth coming in double digits. Trent had agreed to a scheme of amalgamation and arrangement between Landmark Ltd. Sales grew 12% to Rs. adding that the company may not necessarily increase its borrowings immediately. “We maintain our outlook of like-to-like sales growth of 8% for the fiscal year.33 crore from Rs. Total sales increased by 15. Ltd.72 crore from Rs. Like-to-like same store growth. Shoppers Stop has been tweaking the business model of HyperCity as it looks at making the chain profitable.C and other beauty retail chains.” During the quarter HyperCity’s loss widened to Rs.46 crore.204. the company informed BSE.34 crore from Rs.” said Govind Shrikhande. Ltd. This is much higher than the 5-6% like-to-like growth that the company had reported in fiscal 2013.1.4% to Rs. PhillipCapital (India) Pvt. retail. a measure of growth based on sales in stores that have been open for at least a year.18.” said Shrikhande.218.40 crore from Rs.” said Abhishek Ranganathan.21. Shoppers Stop also got shareholders’ approval to increase its borrowing limit to Rs. driven by a 9% price increase and 3% volume growth.70 crore in the same quarter a year ago.3.000 crore from Rs. The company may need the additional funds to fund its expansion plans and invest in HyperCity. the new store openings could impact profitability going forward. institutional equity research. On 4 March.

C.35 on BSE.25% to 19. . Trent shed 0. On Tuesday. Vashi and Thane. shares of Shoppers Stop fell 3. stores. Shoppers Stop opened five new Shoppers Stop stores.353. one Bobbi Brown store and two HyperCity stores. taking the total number of such stores to 74 and total number of stores under various formats to 78.348. two Homestop stores.A.34 points. India’s largest publicly traded retailer. Further it is planning to resize three stores in Cyberabad. two M. two Estee Lauder stores. is still to announce a date for its June quarter earnings.7% to Rs. In the June quarter. Trent opened four new Westside stores.72% to Rs. Future Retail Ltd (formerly Pantaloon Retail (India) Ltd).000 square feet in Bangalore.During the quarter. Shoppers Stop reported its earnings before the close of market hours while Trent posted results after the close.998 while the exchanges’ benchmark Sensex declined 1. three Clinque stores. the retailer has also launched a new compact HyperCity format of 30.