Festive sales, private brand business boost Shoppers Stop’s Q3 numbers

Updated: January 30, 2019 2:52:07 AM

The company is investing in its omni-channel presence with its personal shopper service that contributed 14% to the sales in Q3 and click and collect service, in which the customer can select the items to buy and later try the same in the stores.

The fashion retailer had sold 5% equity stake to Amazon NV Holdings, the investment arm of one of the largest online retailer, Amazon in September 2017.

By Rakshita Sareen  

Shoppers Stop MD & CEO Rajiv Suri said on Tuesday strong festive sales and a good performance from the retailer’s private brand business helped the company report a reasonable set of numbers for the three months to December 2018.

Suri said the festive season helped the like-to-like sales grow at 8.9%, which has been the highest in last five quarters. The momentum also came from the shift in festive season from the second quarter to third quarter in 2019 and an uptick across all categories namely apparel, cosmetics, personal accessories, footwear, and home products.

“The private brands grew exponentially at 29% y-o-y. Indian wear for women grew 21%, and denim business grew 15%, outperforming other categories and even the market,” Suri said. Shoppers Stop’s earnings before interest, tax, depreciation, and amortization (Ebitda) increased 20.9% y-o-y in Q3FY19 to `100 crore compared to `82.7 crore in Q3FY18.

The K Raheja group’s departmental store chain reported net revenues of `999.1 crore, up 3.7% y-o-y. Excluding exceptionals, the net profit grew 58.88% y-o-y at `69.21 crore in Q3FY19 against `43.56 crore in Q3FY18.

Shares of Shoppers Stop fell 1.24% on Tuesday to close at `509.60 apiece on the Bombay Stock Exchange. Shopper Stop is awaiting clarity from the government on the new e-commerce norms to be rolled out on February 1.

“In the new press note, there was no mention about how much percentage of ownership by the online marketplace is applicable to being banned from restrictions under the norms. So, we don’t know if the rules apply to us since its neither the controlling stake nor does Amazon have any say in the way we run our company. We are expecting some response in a day or two,” Suri added.

The fashion retailer had sold 5% equity stake to Amazon NV Holdings, the investment arm of one of the largest online retailer, Amazon in September 2017.

Analysts have noted that an offline retailer like Shoppers Stop will not have access to exclusively sell its products on Amazon, as per an e-commerce norm that says “an entity having equity participation by e-commerce marketplace entity or having control on its inventory, will not be permitted to sell its products on the platform run by such marketplace entity.”

The company also reported highest sales in December as it crossed Rs 500 crore of sales revenue with the help of ‘end of season’ sale offers, followed by the wedding season during the end of the third quarter. The company is investing in its omni-channel presence with its personal shopper service that contributed 14% to the sales in Q3 and click and collect service, in which the customer can select the items to buy and later try the same in the stores.

“The personal shopper service has gained traction as it allows an expert to select items of clothing for the customer. We have been investing a lot in terms of training the team, both in terms of fashion sense and communication to give a quality service,” Suri said.

Shoppers Stop added five beauty stores in the quarter under review, three of which were MAC stores and other two stores of Bobbi Brown. “We are planning to add four beauty stores of MAC in the fourth quarter of this financial year. In addition to that we would open four shoppers stop stores too,” said Suri.
While responding to why there were no store additions for Shoppers Stop, he said that delay in mall construction led to a delay in new store launches in this quarter. This was the case in the second quarter too which saw just three beauty stores launches.

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