Globus Retail Stores once again reported a loss of R26.33 crore in 2014-2015, as sales fell by over 11.2% to R2,017.1 crore.
Globus Retail Stores once again reported a loss of R26.33 crore in 2014-2015, as sales fell by over 11.2% to R2,017.1 crore. Despite the fall in sales, however, the Rajan Raheja Group-promoted chain managed to reduce its losses by around 16% from a year ago by focussing on costs.
Moreover, it shut three loss-making stores, setting up only smaller stores driving down operating expenses by 13.4% to R216.30 crore. Total expenditure declined 10% to R240.30 crore, as a result of which the ebitda loss dropped by 86% to R2.09 crore. The company has a total debt of R146 crore as of March 31, 2015, according to data from the registrar of companies.
Vinay Nadkarni, managing director and chief executive officer, Globus Retail Stores, said the focus on e-commerce and the omni-channel had helped the chain grow. ” We are focusing on reducing expenditure and on getting the right format which would be sustainable in the long-term even if e-commerce continues to grow,” Nadkarni said.
Globus will continue to close down chronic loss making stores; the retailer had shut down its Jalandhar store in August 2014. With e-commerce sites attracting more customers, the retailer has also discontinued two factory outlets during the year.
In July 2014, Globus also temporarily closed down operations of its store in City Mall 36, Raipur, since the mall developer wished to renovate and re-position the mall. This store is likely to open once the mall becomes operational.
Globus at present has 37 stores operational ranging between 3,000 to 7,000 sq feet, depending on the locations. In the last couple of years, the company has already shifted to smaller format stores. The 16-year-old chain has been a private label driven company and opened its first store in Indore in 1999. After facing difficult times in retail since 2008, the Mumbai-based Globus Stores is staying away from large-format stores. The large-format stores used to measure 33,000 sq ft. The company is further focusing primarily on youth-oriented apparel and accessories, extending the scope of its private labels such as Globus F21, Essentials and Poetry.
Globus has opened its first category specific small format store at the R City mall in Mumbai in April 2015. “This small format store is churning out very good numbers and the company would look at taking this concept and gaining entry into more popular and successful malls across the country in FY16,” said Nadkarni.
The own-branded garments and accessories business of Globus has seen pressures over the last two years in terms of sales and margins. This is partly because of the onslaught of e-commerce sites and their aggressive discounting. During the year, the retailer responded to this challenge by selling its products from most of the major e-commerce sites and has seen a good potential of growth there. The company is also investing in upgrading its own e-commerce site, with all latest features to make it ready for the omni-channel retailing experience in future, the company said.