The company which in all runs 350 stores across the country, claims to have got 45-55% of its business back
Spykar Lifestyles has resumed operations in 37 stores in government approved locations, as the nationwide lockdown is being eased in a phased manner. Sanjay Vakharia speaks to Venkata Susmita Biswas about the response so far, dealing with consumers’ reluctance to spend on non-essentials, and the impact of the pandemic on the retail industry.
What has been the response to the reopening of stores?
The 37 stores that have been reopened are in small towns and cities that are in the safe zones. These are owned and operated by franchisees. We have had encouraging footfall and conversion rates. We are receiving about 45-55% of business as compared to last year. We were conservative in our assumption, and so are surprised with the response. We are waiting to observe this trend for a few more weeks before concluding that this is a one-off phenomenon of revenge shopping.
That said, these sales alone cannot help us, as only 37 of our 350-odd stores are open right now. The stores that are open are in the smaller towns, where the propensity of transaction is low as compared to the metros. We are looking for support from large and premium malls where our sales could be higher.
What kind of waivers have you sought from mall owners and landlords?
We have approached them to consider our predicament and ease our rental burden. We have proposed a revenue sharing model for the rest of the year or some reduction in rent. Until we have clarity on store rents, we will not reopen stores in malls and other rented outlets. Malls are waiting for clearances from their financial advisors and banks to take the final call on the model we will be following for the next few months.
Consumer sentiment is expected to be low for the next few months. How long before Spykar can rebound?
We are seeing a huge contraction in demand. Consumers will have lesser disposable incomes, and therefore, will be very conservative about spending on non-essentials. To expect the situation to turn around overnight will be living in fool’s paradise. Additionally, the supply chain will continue to be a huge roadblock for the entire industry. We are also disappointed as the retail industry has not received any stimulus from the government.
We expect the business to be impacted for the entire financial year, and the next two quarters will be particularly challenging. Even if we manage to do business, it will not be to the extent of last year, which was a tough year.
Will you be launching the autumn-winter collection as usual?
We have a large pile-up of inventory, as we went into lockdown at a time when new shipments had just arrived at our stores. We would have loved to bring in our autumn-winter collection. As a lot of migrant workers who support our industry have gone back, and some are still on their way back, we will not be able to start production for the early part of autumn. Even if workers can return soon, it will take us about three months to get the supplies in place.
Any discounts or tweaks in pricing planned to offload this inventory?
The spring-summer merchandise which has made it to stores has not even seen a week of sale. Therefore, I do not see the need to discount it now. We are very certain that we will not have an aggressive end of season sale. Our spring-summer collection is apt for the current season. We will enter the early part of autumn with existing inventory, and bring in fresh inventory for winter just in time for the festive season, around mid-September.
Those who are willing to purchase non-essentials are expected to be less sensitive to costs. We are working towards giving consumers a better product than before by enhancing the design value, functionality, and look and feel of our products.
Are you expecting higher sales online, as non-essential items are allowed to be sold on e-commerce portals now?
Although, theoretically, e-commerce sales should increase, low consumer sentiment may not propel either online or offline sales. Unless people are in the frame of mind to indulge in shopping, the overall demand is expected to be muted. But we do expect a marginal increase in e-commerce sales.