Shoppers Stop has completed two decades in the retail business. The company opened its 52nd store in the country in Pune on Wednesday. It would open 23 stores in next three years with estimated investments of R300 crore, Govind Shrikhande, customer care associate and MD of Shoppers Stop said. Slowdown in last few quarters will not stop our expansion, he said. We have reported volume revival and will report full recovery in next two quarters, Shrikhande said. We have been making profit and have suffered losses only once when we had to shut some stores, he said.
Shrikhande says Shoppers Stop has been able to sustain itself over these years due to the freedom that professionals got in the company and their longevity in the organisation. ?The promoters do not run the business and the professionals are empowered and that has made the difference,? says Shrikhande. Most of the retailers who made big announcements and massive expansion are struggling because their financial models are not clear, he reckons.
Retail is a marathon business and it is constantly changing, and our longevity has helped as we have seen a various ups and downs together, he said. We stayed focused on our destination and were not constantly watching competition in the rear mirror, said Shrikhande.
Unlike rest of the retail industry where top management churn has been a constant, the average tenure of the top management team at Shoppers Stop is 15 years. BS Nagesh, vice-chairman has been there since inception. Shirkhande has completed 12 years with the retailer. About 70% of the top management team has stuck around. The total management team has a strength of 300, of which 100 have been with the company for 12 to 15 years, and this brings in experience, continuity and discipline which has an impact on results, said Shrikhande. Our stores have achieved break-even in 18 to 24 months.
Also people are not sacked if their ideas fail and business plans don’t work out. Shoppers Stop has had to shut few businesses ? Cafe Brio, the catalog business ? but people just moved on to the other project. Around 90 top managers have stock options. The culture at the company is transparent, value focused, simple with an open door policy. There have been cases of people rising to leadership positions from the shop floor, says Shrikhande.
Shoppers Stop has 4,800 people on board. The story on the front-end has however been different. There has been a higher rate of attrition when it came to customer care associates which is about 4% per month which means every four months entire staff changes and there is no connect with brand or customers.
To deal with this problem and improve retail quality, they are rolling out a Fashion Associate programme. The course has been designed by IIM Ahmedabad and will be run for 18 months with nine months training at fashion institutes and nine months on the floor at the store. It has tied up with 12 fashion institutes across the country and will have a batch of 500 to start with and it plans to have 1,500 students. On completion of the course, they will start work at the store with 50% higher salary than others at the entry job to retain them.