Indian retail departmental chain major, Shoppers Stop today said it was aiming at 25 per cent growth in profitability in the current fiscal FY18′ on the back of three point strategy. “For the entire year, we are looking at 12 per cent overall sales growth and the profitability growth should be double of the sales growth… at 25 per cent over last year,” company’s Customer Care Associate and Managing Director Govind Shrikhande said here today while launching festive scheme Sananda pujor Bazaar. He said the growth numbers are on Shoppers Stop standalone numbers. Three broad factors that will drive better profitability for the retail major are improving productivity, pruning loss making stores and benefits from omni channel that will be in place from October this year, he said.
Shoppers Stop on standalone basis had loss in the quarter is due to impairment hit for joint venture company, Shrikhande said. He said they had posted a 20 per cent like-to-like sales growth (sales growth from the same store) in the first quarter of the current fiscal. The company has been able to prune its losses and with impairment hit taken owing to loss making stores, the retail chain is now poised to reap benefits in the forthcoming quarters. Shoppers Stop spent Rs 60 crore in technology for omni channel backbone and will continue to stay focused on offline or brick and mortar business model as e-commerce remains minuscule to total revenue.
On Goods and Services Tax (GST), Shrikhande said the supply hurdles had been ironed out but they are yet to get a clear picture whether there will be any hit on margin. Brands (other than inhouse labels) account for 82 per cent sales in apparels for Shoppers Stop. On customers end there are no price change, he said. In the last 12 months Shoppers Stop has closed three stores but it will also open new four to five more in the current fiscal with an tentative capex of Rs 100 crore. Shoppers Stop said it was increasing in store activities and attracting talents in designs through contests to deepen its inhouse brands.