Govind Shrikhande, MD, Shoppers Stop, told Jharna Mazumdar of FE the company plans to add only five stores in 2018-19 as it is focusing on profitable growth rather than just adding stores.
Amazon will start opening its offline experience centres in Shoppers Stop within the next couple of quarters, while the latter would make its entire catalog available on Amazon. Govind Shrikhande, MD, Shoppers Stop, told Jharna Mazumdar of FE the company plans to add only five stores in 2018-19 as it is focusing on profitable growth rather than just adding stores.
What are your expansion and business plans for 2018-19?
We are likely to open five new stores in 2018-19 and we will enter four new locations: Guwahati, Bhubaneswar, Calicut and Nashik. We will invest around Rs 120 crore for opening five department stores, 12 beauty stores and on improving our technology. In our Chennai store, we have tied-up with Chennai-Super Kings for products like IPL merchandise – shoes, T-shirts, caps and others items to be sold in our stores. We will also renovate 5 to 7 older stores in 2018-19.
How are online sales and how business with Amazon is expected to pan out?
At present around 1% of our revenue is coming from the online business, which is likely to grow to 10% in the next three years. Already many of our brands are available on Amazon and our catalog is ready for the entire range to be available on Amazon by Q2-Q3 FY19. Most of our brands are likely to be on Amazon within the next few months. Amazon will also start opening it experience centres in Shoppers Stop in the next couple of quarters. The US-based online retail giant had picked up 5% stake in Shoppers Stop last year for Rs 179.25 crore.
Why has your same-store-sales growth declined in Q4FY18?
Same-store-sales growth is lowered by 4% as it has been impacted due to five of our stores going for renovation. The company also shut a few loss-making stores in the last financial year. Further, our sale in the December quarter was advanced, and all these factors put together resulted in the lower same- store-sales growth in the fourth quarter of 2017-18.
Earlier you had said that the company was aiming for zero debt. Are you on track to achieve it?
We had a debt of around `67 crore at the end of Q4FY18 and we will be a zero debt company by end of Q4FY19. We started last year at Rs 575-crore debt and by the end of fourth quarter of FY18 we were at a net debt of `67 crore. We are almost done with the financial restructuring. For FY18, Shoppers Stop’s standalone net profit was at `11.60 crore compared to a net loss of `19.93 crore in 2016-17.