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Shashwat Goenka, son of RP-Sanjiv Goenka Group chairman Sanjiv Goenka, took charge of the Spencer's retail chain about two years earlier. He spoke to Namrata Acharya & Ishita Ayan Dutt on his future plans. Edited excerpts:
Many retailers are looking to venture into e-commerce. What are your plans?
We have appointed an agency to understand the e-commerce business, as we have traditionally been a brick-and-mortar retailer. In e-commerce, we want to continue with our promise of making fine living affordable. We do not want to compete to give the highest discount. Our prices in the e-commerce space will be the same as in stores, as we do not want to discriminate between the two. We want to be an omni-channel player, not a multi-channel one. Thus, apart from a web-based portal, we will also have a mobile application.
Since you are not looking to compete on pricing, what will be your selling point in the online space?
We are known for our range and quality. We do not want to compromise on that in the e-commerce space. We did an online survey, which showed the highest concern about online shopping with consumers in India was quality. So, quality will be an important thing in our e-commerce initiative. There will also be a lot of localisation in the space.
By when would you start the e-commerce venture?
This financial year. We already have back-end support through our infrastructure in brick-and-mortar outlets. We want to build on those assets, be more spread-out. We need to develop an information technology capability.
What is your long-term vision for Spencer's?
In top line (revenue), we should be close to Rs 1,800 crore at the end of March 2015. In the next five years, our top line should be close to the $1-billion mark. Our focus will be growing the top line, margins and reducing costs. We have 123 stores; by next year, we want 15 more, of which 13 will be hypermarts and two will be large format stores, predominantly in the north, east and south. Hypermarkets will be our focus area.
Are you open to acquisitions in the retail space?
We will look into opportunities, as and when these come.
How did you pare losses in the past six years?
We looked at how to reduce cost, while raising operational efficiency. We have done a lot of restructuring in the past three years. For example, we now have a separate team to focus on opening of new stores. Earlier, it was done by everyone in the organisation, which impacted sales. Now, we have a separate team.
We have also reduced many layers. We closed stores in non-performing regions. For growing the top line, we invested in branding and advertisement. Margin-wise, we decided to shift our focus to hypermarkets, to have a big basket of offering. We want to become a one-stop shop for all the needs of a home.
Your listing plans?
Once we break even, we will explore the possibility of listing. We are very close to our targets of profitability. Around six-seven years earlier, our losses were almost Rs 26 crore a month. Now, it is less than Rs 5 crore a month.
