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\n By Raghavendra Kamath <\/i> <\/p>\n \n By Raghavendra Kamath <\/i> <\/p>\n
\n <\/i>BUSINESS STANDARD<\/p>\n
\n <\/i>Mumbai March 2, 2009 <\/p>\n
Raheja-owned department store chain Shoppers Stop Limited \n (SSL) is pulling out of unviable new ventures and shutting \n loss-making stores to conserve cash for the company in the \n ongoing economic downturn.<\/p>\n
The retail firm had announced on Friday that it has closed \n three of its book stores ‘Crossword’ – one \n at Mumbai Airport, and two others in Chennai and New Delhi. \n The company also closed its airport retail store ‘Stop \n & Go’ at Mumbai Airport.<\/p>\n
“They were not profitable. We open new stores without \n much information but, when we close them, we have complete \n knowledge about operations,’’ said BS Nagesh, \n Managing Director of Shoppers Stop, while not specifying how \n many stores the company has closed in the last one year.<\/p>\n
Shoppers Stop recently pulled out of a catalogue retailing \n venture with UK’s Home Retail group under the Hypercity-Argos \n brand. The decision to wind up operations was taken “…as \n the business did not meet planned performance levels, (and) \n to support investments required in the current economic climate,’’ \n Shoppers Stop had said recently.<\/p>\n
The company has also moved out of food business after announcing \n that its Café Brio outlets would be replaced with Café \n Coffee Day outlets over the next couple of months. Another \n brand, Fresh Basket, has become a private label of group firm \n Hypercity Retail.<\/p>\n
“We cannot say that new retail ventures do not work \n in the country. Crossword is a profitable venture,’’ \n Nagesh stressed.
\n In late December last year, Fitch ratings downgraded a Rs \n 30-crore short term debt and Rs 50-crore commercial papers \n of Shoppers Stop due to ongoing margin pressures resulting \n from slower sales growth and losses from new businesses.
\n “The company’s business has been impacted by slowing \n growth in same store sales, and the ongoing slowdown in domestic \n consumer spending,’’ Fitch said.<\/p>\n
The company had reported a net loss of Rs 47 crore in the \n first half of FY 2009. As of 30 September 2008, SSL had a \n debt of Rs 220 crore as compared to Rs 207 crore in March \n 2008, Fitch said.<\/p>\n
“Indian shoppers still prefer traditional \n forms of retailing. New formats are yet to catch up in the \n country,’’ said Devangshu Dutta, Chief Executive \n of retail consultancy Third Eyesight.<\/strong><\/p>\n Some of the biggest retailers – such as Reliance Retail, \n Aditya Birla Retail, Spencer’s and Future Group – \n have closed down their stores and are going slow with expansion \n plans as consumers downtrade and defer their big ticket purchases. “Retailers have closed stores which are not \n meeting their expectations. In the current scenario, they \n are being as conservative as they were being optimistic 2-3 \n years ago,’’ Dutta said.<\/strong><\/p>\n Even a report from Edelweiss Securities pointed out how \n across the board expansion plans are being re looked at because \n of capital scarcity and reassessment of catchment.<\/p>\n “Given high debt levels and an almost dormant equity \n market, the capital for growth has become scarce,’’ \n the report said. However, Shoppers Stop added the same amount of space in \n the December quarter of this year compared to last year’s \n corresponding quarter.<\/p>\n","protected":false},"excerpt":{"rendered":" By Raghavendra Kamath BUSINESS STANDARD Mumbai March 2, 2009 Raheja-owned department store chain Shoppers Stop Limited (SSL) is pulling out of unviable new ventures and shutting loss-making stores to conserve cash for the company in the ongoing economic downturn. The retail firm had announced on Friday that it has closed three of its book stores […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-3265","post","type-post","status-publish","format-standard","hentry","category-press-quotes"],"yoast_head":"\n
\n While Reliance Retail has closed down 30 stores, Aditya Birla \n has closed 45 of its unprofitable stores in the last one year. \n Retail major Future Group’s CEO Kishore Biyani, who \n was targeting a retail space of 30 million square feet by \n financial year 2011, now expects to have the space by FY13.<\/p>\n
\n If Pantaloon added 0.3 million sq ft of space in the December \n quarter of the current financial year compared to 0.9 million \n it added in the corresponding quarter last fiscal, New Delhi-based \n Vishal Retail added only 0.2 million sq ft of space in the \n just-concluded quarter compared to 0.5 million sq ft it added \n in the year-ago period.<\/p>\n