Rajan Raheja Group-promoted Globus Stores is slipping deep into losses. The fashion chain posted losses of Rs 27.6 crore for 2016-17, up 14% from the previous year, resulting in accumulated losses of Rs 268.86 crore, according to the company’s filings with the MCA. In FY17, the company recorded a 4.27% decline in operational and other income to Rs 210.73 crore. Its loss before interest, taxes, depreciation and amortisation surged 267% to Rs 9.27 crore. The management has attributed the loss to pressure on sales and margins in the branded garments and accessories business following the onslaught from e-commerce sites that resorted to aggressive discounts to push volumes. Globus has also churned its retail portfolio. The company wound up operations of five stores during the year owing to either closure of malls or end of the lease tenure. These stores were located in Hyderabad, Vijaywada, Nagpur, Kandivali and Pune.
On the other hand, the company opened eight stores – two in Pune, two in Noida and one each in Mumbai, Navi Mumbai, Bareilly and Bengaluru. Despite being an early entrant, Globus has failed to match up to Shoppers Stop, Pantaloons and Lifestyle International among others that had entered the fashion segment around the same time, or later. The company announced its decision to ramp up its own brands business in Globus Stores and that it has hired international experts in designing, buying and visual merchandising for this very purpose. It said the impact will become visible in the coming year. Arvind Singhal, chairman, Technopak, said the fashion category has been growing by 12-13% every year for the last five years and fetches higher margins. “Most fashion retailers are performing well and better than food and grocery, or jewellery players. However, Globus needs to change its strategy.” Continuing losses have also seen Globus’ debt swell. The total debt of the company increased 11.3% in FY17 to Rs 177 crore, according to RoC data. While Globus started operations in 1999 and caters to the fashion requirements of both men and women, it runs just 38 stores at present. This contrasts with 309 by Pantaloons, 108 by Trent and 80 by Shoppers Stop.
