The country's first and largest retail chains, Shopper's Stop which is on an expansion drive, has decided to float an IPO even as its main promoter, the Raheja Group, has offloaded 18.5 per cent of its stake to mop up Rs 60 crore through a private placement.
Those who picked up the stake included Zodiac Clothing which now has 7 per cent, ICICI picked up 5 per cent, IL & FS bought 3.5 per cent and one per cent each was picked up by Kothari and Birla mutual funds.
Shopper's Stop's managing director and chief executive officer B S Nagesh too was given 1 per cent stake in the retail chain.
"Since retail is not an industry, companies in this business face a lot of problems in getting funding from the banks. Every state is like a different country and it is a nightmare running a retail store as big as ours. We have products in 52 different categories and we have to pay 7 taxes," Nagesh told Business Standard.
Nagesh said Shopper's Stop is planning to break even by the end of the current financial year. "We have eight stores at the moment but we want to increase the number to 15. We are targeting the metros specially Delhi and Mumbai since they have shown the maximum potential," Nagesh said.
He said Delhi will have three more stores while Mumbai will have four more. The company plans to open three to four stores every year. Shopper's Stop is also finalising a property in Ahmedabad and are planning to have a store in Kolkata as well.
Nagesh said the company plans to launch more stores in each city because customers will have easier access to them because of their proximity.
Nagesh said Shopper's Stop has four private labels: Carrot, Kashish, Life and Stop. These four brands contribute 18 per cent of the business for the company.
The company has a comprehensive 'loyalty programme'. "We have around 2.1 lakh customers in this programme. We offer special treatment to these customers since they account for around 60 per cent of our business," said Nagesh.
The company is all set to launch its business-to-business interface with its suppliers from next month and this will allow all brands and suppliers to get all the information related to their business online.
Nagesh said the main differentiator for such retail chains are the price and quality of service. "We want to fight competition through merchandising and cater to a large variety of customers," he said.
Nagesh said their advertising campaigns are built around experience of shopping at Shopper's Stop. Their black and white advertisements clearly shows that their products signify excellence without colouring the quality.
Shopper's Stop has launched a 101 day promotion for the festival season in which lucky customers will get to visit Seven Wonders of the World.
