Shoppers’ Stop to infuse Rs 1,000 cr for expansion

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Friday , March 14, 2008 at 0003 hrs Shoppers’ Stop Ltd will be adding 2.7 million sq ft of retail area to its existing spread of 1.3 million sq ft over the next three to four years, as part of a Rs 1,000-crore plan that will include investment in a new acquisition, its other formats and the airport retail joint venture.

“We are looking at an investment of more than Rs 250 crore over almost four years,” said Govind Shrikhande, customer care associate and chief executive officer, referring to the retail area expansion of Shoppers’ Stop.

Shoppers’ Stop has earmarked Rs 50 crore for increasing its stake in HyperCity Retail (India) from 19% at present to 50% by December this year, and Rs 500 crore on expanding the HyperCity format.

Since its inception in 1991, Shoppers’ Stop has invested Rs 250 crore to create 1.3 million sq ft of retail space across 24 stores in 11 cities.

“Overall, we see from the 1.3 million sq ft of the Shoppers’ Stop departmental store we are heading towards 4 million sq ft across all formats,” said Shrikhande.

The retail major plans another 24 more stores in 24 cities within the next four years, looking at 12 tier-II cities like Ludhiana, Aurangabad, Amritsar, Surat, Baroda, Vijaywada and Vizag.

Shoppers’ Stop will invest Rs 150 crore to expand its formats like Mothercare, Crossword Book Store and HomeStop, it will invest Rs 25 crore in its airport retailing venture with the Nuance Group AG.

“The investment will be funded through the rights issue and internal accrual,” he said. The rights issue is likely to be filed within next 3-4 weeks and the subscription for that is likely to get over last week of May, this year. The rights issue will consist of a Rs 300-crore equity component and around Rs 200 crore of debt.