Spencer’s, the retail arm of the Rs 13,500-crore RPG Enterprises, will be focusing more on large format stores this fiscal and prune down investments per store in order to beat recession blues and turn the company profitable.
Spencer’s was merged with CESC Limited in 2008-09, the losses of Spencer’s which are to the tune of Rs 220 crore till March 2009 are largely cushioned by CESC at present. Around 140 stores have been shut down in the period of a year and half. At present, around 246 stores are operational.
“Spencer’s is definitely losing money, but cannot say that it is not doing well. We are working on different strategies. The company will continue to lose money for the next 12 months or so before it can break even," said Sanjiv Goenka, vice-chairman, RPG Enterprises. In a bid to pare costs, the company plans to adopt cost cutting measures.
For example the company has reduced the number of clusters which handle back-end operations from 21 clusters to 13.The company is looking at pruning down investments in the new stores by opting for low-cost flooring, accessories, architecture.
“This year, we hope to bring down the losses, said Goenka. This apart, the company is going to focus more on large format stores this fiscal as they turn out to be more profitable. “We plan to focus more on large format stores, typically those which are above 10,000 square feet or above. ,” said Goenka.
