NEW DELHI: K Raheja-promoted retail chain Shoppers Stop NSE -0.61 % will invest Rs 120 crore this year to open new stores, and renovate the older stores, a top executive said.
“On an average, we will invest Rs 120 crore to open five department stores and 12 beauty stores in the beauty format this year,” Govind Shrikhande, managing director and customer care associate of Shoppers Stop told ETRetail.
“We will also renovate 7 older stores in the current financial year. A part of the proposed investment will also be made to improve and introduce new technology,” he added. The fashion retailer had last year renovated 12 stores.
Shoppers Stop, in which US-based online retail giant Amazon had picked up 5 percent stake last year, runs big format stores in fashion retailing called Shoppers Stop and home retailing stores, Homestop. The company also operates brands like MAC, Clinique, Estee Lauder, Bobbi Brown, Smashbox and Crossword in the country.
The company is also expecting 10 percent of its total revenue to come from online channels in the next three years. “Our online business grew by more than 100 percent. Our target is to generate 10 percent of revenues from online sales in the next three years,” he said, adding that the company will leverage its association with Amazon to increase online sales.
In the second quarter of the last financial year, Shoppers Stop had embarked on the financial restructuring journey which Shrikhande claimed was over by the end of fourth quarter of 2017-18. The company is also looking to be completely debt free by last quarter of the ongoing financial year 2018-19.
“In the last financial year, we completed all the financial restructuring work that we started three quarters back. We started last year at Rs 575 crore debt and by the end of fourth quarter of the financial year 2017-18 we were at a net debt of Rs 67 crore. We are almost done with the financial restructuring part. Along with this by the fourth quarter we should be completely debt free. That is our target.”
For the financial year 2017-18, Shoppers Stop’s standalone net profit was at Rs 11.60 crore. It had a net loss of Rs 19.93 crore in the financial year 2016-17.
Shoppers Stop already exited non-core businesses that are Hypercity, Timezone and duty-free airport retail joint venture NGIPL to sharpen the focus on its core department store business and omnichannel strategy.
According to Shrikhande, the company will also focus on reviving its private label brands that have not been performing well since last year. “Private brands have been disappointment throughout the year. We are working hard to benchmark our brands with the right competition in terms of pricing, positioning, and assortment. By end of the second quarter, we believe the results will start changing and in the second half of the year, we should clearly see good growth coming back to the private brand.Any correction in the private brand takes anywhere between four to six months. Once it is back to growth it will improve out topline as well as margins” said Shrikhande.
The company operates private label brands like Stop, Life, Kashish, Haute Curry, and Vettorio Fratini.
The development was reported by economictimes.indiatimes.com