View
217
Download
0
Category
Preview:
Citation preview
8/13/2019 Effct of Inflatn on Ss
1/6
Shoppers Stop's expansion plans for the next financial year (2014/15) are very much on
track. The lifestyle retailer is planning eight new stores in the forthcoming fiscal (2014/15),
but in the following fiscal (2015/16), the plan is to open only around three-to-four stores.
The company, however, will tighten its belt with regard to its focus on several of its not so
well-performing categories. Managing Director Govind Shrikhande says there are plans to
seriously relook at some of Shoppers Stop's businesses, such as fine jewellery and
electronics.
The jewellery business' lacklustre sales due to restrictions on gold import and the increases
in gold import duty has, in fact, had an adverse impact on the third quarter (October to
December 2013) results of Shoppers Stop.
It reported a net profit of Rs 17.34 crore, slightly higher than Rs 17.10 crore in the year ago
(October to December 2012) period. Gross revenue rose 16 per cent to Rs 787.5 crore for
the quarter ended December 31, 2013. The company, however, expects the current quarter
to fare better than the third quarter.
"We have already curtailed the size (of the jewellery business) because we are seeing veryclearly that this category may not come back very strongly for at least another year or two,"
said Shrikhande, adding: "We will, instead (of jewellery), focus on the beauty and personal
accessories divisions."
He also said that HyperCITY, Shoppers Stop's hypermarket format, is likely to turn
profitable over the next 24 to 27 months. HyperCITY, which currently has 15 stores, will
benefit from an increase in Shoppers Stop's focus on the fashion division and store
consolidations, along with its move away from "non productive or non profitable categories"
such as electronic goods.
The company has taken the share of its fashion business to 13 per cent, and plans to take it
to 15 per cent in the coming year, as that would directly impact the profitability of thebusiness.
With this move, Shrikhande expects a 50 basis point margin improvement in the HyperCITY
business. "For two quarters, you will still see losses continuing in a similar vein, but the
second half of next year onwards will see us moving towards profitability," said Shrikhande,
adding: "We have started getting out of electronics and by the end of the fourth quarter, we
should be out of electronics completely."
There will also be a move towards smaller format stores, along with rightsizing some of the
larger format HyperCITY stores. "We're clearly seeing that small format stores can turn
around or start making money within 12 to 18 months versus 36 to 48 months required for a
big format store," said Shrikhande.
The company, which has already reduced its store sizes in cities such as Amritsar and
Ahmedabad, will now resize its store in Hyderabad and the ones at Vashi and Malad in
Mumbai.
8/13/2019 Effct of Inflatn on Ss
2/6
The retail sector has been buzzing on the news of Foreign Direct Investment in multi-brand retail being
seriously considered by the government. On the other hand, it has not been a great festive season for
many players in the retail industry which witnessed a slowdown. In an interview with CNBC-TV18, BS
Nagesh the Vice Chairman of Shoppers Stop said,I wouldnt say there is a very big slowdown butthere is a very relative slowdown compared to what was happening earlier.The industry has
witnessed many companiesmargins taking a dent due to high inflation and discount sales during the
festive season. Below is an edited transcript of his interview. for more. Q: There is a lot of growth
slowdown that is being talked about. How are you sensing things in the retail space? A: In the last three-
four weeks, one has seen a down trading by the consumers. We have seen that the consumers have
probably bought the volumes that they wanted, however, they have down traded on the price and this
is more so in the lifestyle products rather than in food because in food we are still seeing trading going
on fairly strong. During the festival season, electronics, consumer durables, that part of the business did
well because there is a lot of consumer shift happening. Q: With the slowdown in the lifestyle segment
of Indian retail, do you suppose that also holds true for the luxury segment? A: I will not be able to
comment on the luxury segment because its still a very small segment. As far as the lifestyle segment
is concerned, there are two-three areas for example; in the home segment, in hard furniture you will see
a slowdown because home buying has slowed down due to the interest regime. We have also seen that
people have down traded on lifestyle apparels although we have not seen down trading as of now in the
food segment because people have continued to shop. Especially during the festival season, people
dont down trade on food because they look at it as an essential. I wouldnt say there is a very big
slowdown but there is a very relative slowdown compared to what was happening earlier. Q: What are
your thoughts on FDI in multi-brand retail? Is that a likelihood? How significant will it be to change the
landscape of Indian retail? A: As far as the likelihood is concerned you would have a better idea because
we have been hearing it out of the media only. I hope that the policies which are not initiated make
things worse. I have always been a proponent of FDI in retail and I still support it. As far as the impact is
concernedEverybody is looking at the impact only with few retailers coming in but the impact will
also be in the ecosystem and the parallel should be drawn with the auto industry. When you look at the
Maruti story, the whole ancillary that they have developed has helped the new players to come and
establish. Similarly when a large retail player from international shores comes in, he brings in the full
ecosystem whether it is training organisation, fit outs, you have the green movement and their way of
looking at suppliers and lot of suppliers are likely to set in factories. I would definitely urge policymakers
to look at what the ecosystem will do in terms of new players and new categories coming in and that the
impact will be much larger than the impact of the FDI only into retail. That is very positive. I am looking
forward to these changes happening. Q: What about the new clause thats been added to the FDI in
single-brand retail. Do you suppose that now with this additional clause, the owner of the brand will
push away some of the prospective buyers from this space? A: It will depend on case to case because
most of the players who are going to enter will be brand owners only because India is a long-term play.
Anywhere when you enter a country, you always look at a 10-15 year horizon. Here also whether you
are a single-brand or a multi-brand you would have to look at 10-15 years. So it has to be an investor
and a brand owner who will come together. I dont see a major issue and if it goes into 100% then the
8/13/2019 Effct of Inflatn on Ss
3/6
true owners will come in and maybe they will have partnership with Indians who will help them
establish the market because of the complexities of the market. Q: We have seen the margins of many
of the retail players come down over the past few quarters. Given that inflation is very high, we have
seen an increase in raw material prices and competition is also heated up quite a bit. Are companies
likely to live with these lower margin scenarios? A: There are two kinds of margin impacts; one margin
impact is because of inflation, the second margin impact is also because of non-food price sale that has
taken place. The discount sales during the year have gone up and the last impact is also because of self
cannibalisation. So as much as all of us appreciate growth, we forget that players who are existing, get
growth on the basis of self cannibalisation because they want to capture market opportunities to gain
share. I dont expect margin growth from here until and unless somebody has overstocked himself for
the season and underperformed in which case they will have to again go into discounting. We do expect
many players in the industry in the apparel segment may have to go into discounting because of a little
slowdown relatively. Other than that I dont see the margins squeeze going forward for the industry.
Shoppers Stop stock price On February 11, 2014, at 11:17 hrs Shoppers Stop was quoting at Rs 370.00,
down Rs 1.45, or 0.39 percent. The 52-week high of the share was Rs 453.90 and the 52-week low was
Rs 317.70. The company's trailing 12-month (TTM) EPS was at Rs 5.30 per share as per the quarter
ended December 2013. The stock's price-to-earnings (P/E) ratio was 69.81. The latest book value of the
company is Rs 83.41 per share. At current value, the price-to-book value of the company is 4.44.
Read more at:http://www.moneycontrol.com/news/business/dont-see-big-margin-squeezeretail-
ahead-shoppers-stop_618759.html?utm_source=ref_article
Shoppers Stop, Trent fall short of analysts
expectations
http://www.moneycontrol.com/news/business/dont-see-big-margin-squeezeretail-ahead-shoppers-stop_618759.html?utm_source=ref_articlehttp://www.moneycontrol.com/news/business/dont-see-big-margin-squeezeretail-ahead-shoppers-stop_618759.html?utm_source=ref_articlehttp://www.moneycontrol.com/news/business/dont-see-big-margin-squeezeretail-ahead-shoppers-stop_618759.html?utm_source=ref_articlehttp://www.moneycontrol.com/news/business/dont-see-big-margin-squeezeretail-ahead-shoppers-stop_618759.html?utm_source=ref_articlehttp://www.moneycontrol.com/news/business/dont-see-big-margin-squeezeretail-ahead-shoppers-stop_618759.html?utm_source=ref_articlehttp://www.moneycontrol.com/news/business/dont-see-big-margin-squeezeretail-ahead-shoppers-stop_618759.html?utm_source=ref_article8/13/2019 Effct of Inflatn on Ss
4/6
Standalone revenue for Shoppers Stop, which accounts for nearly three quarters of the consolidated revenue, grew
at 20% to Rs.537.07 crore in the June quarter from Rs.441.32 crore a year ago. Photo: Priyanka Parashar/Mint
Updated:Wed, Jul 31 2013. 12 34 AM IST
Mumbai: Shoppers Stop Ltd,Indias oldest department store chain, andTata GroupsTrent Ltd,which operatesWestsideand hyper market chainStar Bazaar,missed analysts earnings
expectations even as they improved their financial performance from a year earlier.
Shoppers Stop reported a consolidated loss of Rs.1.1 crore for the quarter ended 30 June, burdened
by its money-losing hyper market chainHyperCity.On a standalone basis, the retailer who runs the
eponymous department store chain, more than doubled its standalone net profit to Rs.1.6 crore.
Consolidated revenue for theK. Raheja Corp.group firm, which operates large-format department
stores and speciality stores such asCrosswordandMothercare,grew 13% to Rs.866 crore, helped
by the strong wedding season in May.
Standalone revenue for Shoppers Stop, which accounts for nearly three quarters of the consolidated
revenue, grew at 20% to Rs.537.07 crore in the June quarter from Rs.441.32 crore a year ago.
However, the standalone numbers missed analysts estimates. ABloombergpoll of eight analysts
had estimated standalone net profit at Rs.5.98 crore and revenue at Rs.578.6 crore.
http://www.livemint.com/Search/Link/Keyword/Mumbai:http://www.livemint.com/Search/Link/Keyword/Mumbai:http://www.livemint.com/Search/Link/Keyword/Tata%20Grouphttp://www.livemint.com/Search/Link/Keyword/Tata%20Grouphttp://www.livemint.com/Search/Link/Keyword/Tata%20Grouphttp://www.livemint.com/Search/Link/Keyword/Trent%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Trent%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Trent%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Westsidehttp://www.livemint.com/Search/Link/Keyword/Westsidehttp://www.livemint.com/Search/Link/Keyword/Westsidehttp://www.livemint.com/Search/Link/Keyword/Star%20Bazaarhttp://www.livemint.com/Search/Link/Keyword/Star%20Bazaarhttp://www.livemint.com/Search/Link/Keyword/Star%20Bazaarhttp://www.livemint.com/Search/Link/Keyword/HyperCityhttp://www.livemint.com/Search/Link/Keyword/HyperCityhttp://www.livemint.com/Search/Link/Keyword/HyperCityhttp://www.livemint.com/Search/Link/Keyword/K.%20Raheja%20Corp.http://www.livemint.com/Search/Link/Keyword/K.%20Raheja%20Corp.http://www.livemint.com/Search/Link/Keyword/K.%20Raheja%20Corp.http://www.livemint.com/Search/Link/Keyword/Crosswordhttp://www.livemint.com/Search/Link/Keyword/Crosswordhttp://www.livemint.com/Search/Link/Keyword/Crosswordhttp://www.livemint.com/Search/Link/Keyword/Mothercarehttp://www.livemint.com/Search/Link/Keyword/Mothercarehttp://www.livemint.com/Search/Link/Keyword/Mothercarehttp://www.livemint.com/Search/Link/Keyword/Mothercarehttp://www.livemint.com/Search/Link/Keyword/Crosswordhttp://www.livemint.com/Search/Link/Keyword/K.%20Raheja%20Corp.http://www.livemint.com/Search/Link/Keyword/HyperCityhttp://www.livemint.com/Search/Link/Keyword/Star%20Bazaarhttp://www.livemint.com/Search/Link/Keyword/Westsidehttp://www.livemint.com/Search/Link/Keyword/Trent%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Tata%20Grouphttp://www.livemint.com/Search/Link/Keyword/Mumbai:http://www.livemint.com/Search/Link/Keyword/Mumbai:8/13/2019 Effct of Inflatn on Ss
5/6
Trent reported a net profit increase of 36% in the June quarter to Rs.17.34 crore from Rs.12.76 crore
a year ago. Total sales increased by 15.4% to Rs.252.40 crore from Rs.218.70 crore in the same
quarter a year ago, the company informed BSE.
A Bloombergpoll of three analysts had estimated net profit at Rs.18.33 crore on sales of Rs.253.1
crore for the June quarter for Trent.
On 4 March, Trent had agreed to a scheme of amalgamation and arrangement betweenLandmark
Ltd,Fiora Link Road Properties LtdandTrexa ADMC Pvt. Ltd.The appointed date of the merger will
be 1 April with retrospective effect, subject to approval.
Meanwhile, Shoppers Stop said it got shareholders approval for the transfer of business done
byElca Cosmetics Pvt. Ltdby way of a slump sale to its wholly-owned subsidiaryGateway
Multichannel Retail (India) Ltdfor Rs.63.46 crore. Elsa runs the cosmetics business ofEstee
Lauder,M.A.Cand other beauty retail chains.
Shoppers Stop also got shareholders approval to increase its borrowing limit to Rs.1,000 crore
from Rs.650 crore.
The company may need the additional funds to fund its expansion plans and invest in HyperCity.
This is just a provision, saidGovind Shrikhande,managing director of Shoppers Stop, adding that
the company may not necessarily increase its borrowings immediately.
Like-to-like same store growth, a measure of growth based on sales in stores that have been open
for at least a year, for Shoppers Stop stood at 12%, driven by a 9% price increase and 3% volume
growth. This is much higher than the 5-6% like-to-like growth that the company had reported in fiscal2013. It is also higher than the estimates the company has given for fiscal 2014 at 8%.
We maintain our outlook of like-to-like sales growth of 8% for the fiscal year, said Shrikhande.
It is good to see the like-to-like sales growth coming in double digits, said Abhishek Ranganathan,
vice president, retail, real estate, institutional equity research,PhillipCapital (India) Pvt. Ltd.
However he added, sustaining the momentum will be a challenge. Also, the new store openings
could impact profitability going forward.
During the quarter HyperCitys loss widened to Rs.24.72 crore from Rs.21.35 crore a year ago due to
a write-off of Rs.3.3 crore for the closure of a store in Ludhiana. Sales grew 12% to Rs.228.33 crore
from Rs.204.75 crore in the same quarter a year ago.
Over the past year, Shoppers Stop has been tweaking the business model of HyperCity as it looks at
making the chain profitable. During the June quarter, it closed one store and is also considering
exiting from the consumer durables and Information Technology (IT) products business division in
the next 12 months.
http://www.livemint.com/Search/Link/Keyword/Landmark%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Landmark%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Landmark%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Fiora%20Link%20Road%20Properties%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Fiora%20Link%20Road%20Properties%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Fiora%20Link%20Road%20Properties%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Trexa%20ADMC%20Pvt.%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Trexa%20ADMC%20Pvt.%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Trexa%20ADMC%20Pvt.%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Elca%20Cosmetics%20Pvt.%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Elca%20Cosmetics%20Pvt.%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Elca%20Cosmetics%20Pvt.%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Gateway%20Multichannel%20Retail%20(India)%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Gateway%20Multichannel%20Retail%20(India)%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Gateway%20Multichannel%20Retail%20(India)%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Gateway%20Multichannel%20Retail%20(India)%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Estee%20Lauderhttp://www.livemint.com/Search/Link/Keyword/Estee%20Lauderhttp://www.livemint.com/Search/Link/Keyword/Estee%20Lauderhttp://www.livemint.com/Search/Link/Keyword/Estee%20Lauderhttp://www.livemint.com/Search/Link/Keyword/M.A.Chttp://www.livemint.com/Search/Link/Keyword/M.A.Chttp://www.livemint.com/Search/Link/Keyword/M.A.Chttp://www.livemint.com/Search/Link/Keyword/Govind%20Shrikhandehttp://www.livemint.com/Search/Link/Keyword/Govind%20Shrikhandehttp://www.livemint.com/Search/Link/Keyword/Govind%20Shrikhandehttp://www.livemint.com/Search/Link/Keyword/PhillipCapital%20(India)%20Pvt.%20Ltdhttp://www.livemint.com/Search/Link/Keyword/PhillipCapital%20(India)%20Pvt.%20Ltdhttp://www.livemint.com/Search/Link/Keyword/PhillipCapital%20(India)%20Pvt.%20Ltdhttp://www.livemint.com/Search/Link/Keyword/PhillipCapital%20(India)%20Pvt.%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Govind%20Shrikhandehttp://www.livemint.com/Search/Link/Keyword/M.A.Chttp://www.livemint.com/Search/Link/Keyword/Estee%20Lauderhttp://www.livemint.com/Search/Link/Keyword/Estee%20Lauderhttp://www.livemint.com/Search/Link/Keyword/Gateway%20Multichannel%20Retail%20(India)%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Gateway%20Multichannel%20Retail%20(India)%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Elca%20Cosmetics%20Pvt.%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Trexa%20ADMC%20Pvt.%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Fiora%20Link%20Road%20Properties%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Landmark%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Landmark%20Ltd8/13/2019 Effct of Inflatn on Ss
6/6
During the quarter, the retailer has also launched a new compact HyperCity format of 30,000 square
feet in Bangalore. Further it is planning to resize three stores in Cyberabad, Vashi and Thane.
In the June quarter, Shoppers Stop opened five new Shoppers Stop stores, twoHomestopstores,
two M.A.C. stores, threeClinquestores, two Estee Lauder stores, oneBobbi Brownstore and two
HyperCity stores. Trent opened four new Westside stores, taking the total number of such stores to
74 and total number of stores under various formats to 78.
Indias largest publicly traded retailer,Future Retail Ltd(formerly Pantaloon Retail (India) Ltd), is still
to announce a date for its June quarter earnings.
On Tuesday, shares of Shoppers Stop fell 3.72% to Rs.353.35 on BSE, Trent shed 0.7% to Rs.998
while the exchanges benchmark Sensex declined 1.25% to 19,348.34 points.
Shoppers Stop reported its earnings before the close of market hours while Trent posted results
after the close.
http://www.livemint.com/Search/Link/Keyword/Homestophttp://www.livemint.com/Search/Link/Keyword/Homestophttp://www.livemint.com/Search/Link/Keyword/Homestophttp://www.livemint.com/Search/Link/Keyword/Clinquehttp://www.livemint.com/Search/Link/Keyword/Clinquehttp://www.livemint.com/Search/Link/Keyword/Clinquehttp://www.livemint.com/Search/Link/Keyword/Bobbi%20Brownhttp://www.livemint.com/Search/Link/Keyword/Bobbi%20Brownhttp://www.livemint.com/Search/Link/Keyword/Bobbi%20Brownhttp://www.livemint.com/Search/Link/Keyword/Future%20Retail%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Future%20Retail%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Future%20Retail%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Future%20Retail%20Ltdhttp://www.livemint.com/Search/Link/Keyword/Bobbi%20Brownhttp://www.livemint.com/Search/Link/Keyword/Clinquehttp://www.livemint.com/Search/Link/Keyword/HomestopRecommended