Shoppers Stop, which opened its 50th store on Thursday with its sixth store in Bangalore, plans to spend Rs 225 crore over 2012-13 and 2013-14. The retailer, which has its operations spread across 22 cities in the country, is expanding at a frenetic pace.
This has been possible because of the slowdown on the real estate front and the resultant fall in the real estate prices. The retailer signs up with real estate developers three-four years before opening a store.
The economic slowdown gave the company a chance to make the best use of the softening of the real estate prices.
In the next two years, the retailer will launch 16 stores, with a spend of Rs 8 crore on an average on each store, and it will open 24 in three years. The firm hence aims to be a 68-70 store chain in 30 months.
With most of its investments coming from internal accruals, the retailer says, it’s got a very low debt to equity ratio. As of now it stands at 0.26 times. The company believes even if it reaches 0.3 or 0.4 times, it would still be comfortable.
Govind Shrikhande, customer care associate & managing director, Shoppers Stop Ltd, said that they have been able to build up a considerable base of its loyal customers which the company claims stands at about 2.3 million across the country today. About 200,000 of the loyal customers, according to Shrikhande, are from Bangalore.
The tier II and tier III stories for Shoppers Stop has not been as sour as it had been for many others.
“But, it has not been as big as we thought, and is not as small as we think,” Shrikhande added, speaking of the tier II and tier III story which has not been so positive for many others businessses who were very positive about there smaller cities and towns just a few years ago.