Shopper's Stop to invest Rs 125 cr in expansion this year

Mumbai-based Shopper's Stop Ltd, a premier department store chain promoted by the K Raheja Corp Group, is planning to invest Rs 125 crore this year, to expand its various brands of retail stores. The company is planning to add around 20 stores across its brands during the period, said a senior executive from the company.

The company is planning to expand its department stores with around 8-10 more outlets, the large format hyper market HyperCity with 2-3 stores and its premier home solution chain HomeShop with another 2-3 shops and five speciality stores across its other brands.

"We will be investing Rs 125 crore this year for expansion. The investment would be from internal accruals and we can always arrange for debt if it requires," said Govind Shrikhande, managing director and customer care associate, Shoppers Stop Ltd. He was in Chennai to open the 13th HomeStop outlet in the city.

The compay would focus on tier I cities, though it is expanding into the cities like Surat, Agra and Thane, where it expects more customer attraction. It is opening the 56th Shoppers Stop and 14th HomeStop, in Chandigarh on Saturday.

Shoppers Stop Ltd also has 12 HyperCity outlets, a business which the company is bringing in changes to make it profitable. The format would be Ebitda (Earnings Before Interest, Taxes, Depreciation, and Amortization) positive in store level in next two years, he said.

The company is implementing right sizing of the stores, downsizing some of the stores which have larger space and increasing the share of fasion products in the mix. The fashion products share has been increased from five% earlier to 9.5% at present and is expected to reach 15% in future. The margin on fashion products, which is higher at 19% is expected to go up to 21% in next 24 months, said Shirkhande.

At present the department store business has around 16% private label products, while in home segment, it is 25%. This is expected to grow to 18% and 28%, respectively, in the next two years.

Shoppers Stop, on a consolidated basis, has posted a revenue of Rs 2,400 crore in the third quarter of the fiscal year ended December 31, 2012, and it is expected to close at around Rs 3,000 crore by the end of March 31, 2013, for the period which the results are yet to be announced.