Google News
spot_img

Shoppers Stop to raise funds

Must Read

Department store Shoppers Stop is planning to raise funds to acquire 32% in group firm and hypermarket chain Hypercity, a top official said. The company is looking at generating Rs 1 billion to Rs 1.2 billion rupees (USD 21.6 million to USD 26 million) for the acquisition, President and Chief Executive Govind Shrikhande said.

On Saturday, the company’s board approved an issue of 4 million shares to institutional investors and also 4 million convertible warrants to founders, but did not specify how much it would be raising. Hypercity is the multi-brand retailing format floated by the founders of Shoppers Stop, which has a 19% stake in it and under an agreement is exercising the option to raise it to 51% by June next year.

Shoppers Stop, with a total retail area of 1.88 million sq ft, operates large format department stores, home stores and speciality stores like bookstore chain Crossword and M.A.C cosmetics stores through a retail agreement with Estee Lauder. It has distribution tie-ups with Britain’s Mothercare Plc and German lifestyle and jeanswear Mustang in India.

Earlier this year, it dissolved its catalogue retailing venture with Britain’s Home Retail Group as the venture did not perform up to expectations. Shoppers Stop has plans to open 15 to 18 stores in India over the next 40 months with an average investment of Rs 1 billion a year, Shrikhande said.

The company, which reported a Rs 120.6 million net profit in the September quarter versus loss year-ago expects its financial performance to improve in future quarters with an improvement in the retail climate. “Customer confidence is improving, rental rates are coming down and overall costs are also coming down,” Shrikhande said.

Rents were down nearly 35-40% compared to a year earlier, while realty owners were now more ready to enter into revenue sharing agreements with tenants than previously, he said.

Shoppers Stop, along with Pantaloon Retail, India’s largest listed retailer and Tata Group’s Trent dominate the organised domestic Indian retail sector. Large overseas retailers such as WalMart, Tesco, Metro AG, have recently started operations in India with cash and carry ventures. Organised retail, growing at 25-30% annually, constitutes 6-7% of the total Indian retail market, estimated at USD 350 million to USD 400 million.

Source: MoneyControl

Latest News

Zepto achieves 120% revenue growth in FY24, reports strong financial performance

Zepto reduced its absolute losses, with PAT as a percentage of revenue improving significantly from -63% in FY23 to...

Login to your account below

Fill the forms bellow to register

Retrieve your password

Please enter your username or email address to reset your password.