Retail major, Shoppers Stop is set to double sales in 4 years, the Managing Director of the company, Goving Shrikhande said.
The company saw a growth of 7 percent in the first quarter this year and expects to do better in the remaining quarters. Quarter three should be very good as that is typically a festival season, Shrikhande said.
Talking about the impact of inflation on consumption, he said, "the environment is more challenging on paper than reality."
Salaries had gone up by 10-15 percent last year, which beats the inflation number. Also, there have been no job cuts. Infact companies have been hiring. So there is no negative impact on buying, he said.
The company is looking at lower volumes though on account of increase in excise duty and cotton prices that have led to a 15-20 percent increase in apparel prices. But cotton prices have come down, which could send the prices down again, he added. In addition if the government rolls back excise duty, that will have a 6 percent negative impact on price of apparels.
Commenting on the revenue of Shoppers Stop, he said, it has to be looked at in two parts: limited results and consolidated numbers. Limited business constitutes the departmental stores where both topline and bottomline have grown up by almost 15-20percent, in line with expectation. The company has added 5 new stores and will be adding the same number in the coming quarters. Hypercity is still running in loss. In 8 to 10 quarters hypercity will see a PAT profit, he said. It will turn around the consolidated results. Hypercity accounts for 30 percent of the consolidated revenues of the company, he added. In 3 years the ratio of revenue will be 60:40 for Shoppers Stop and Hyper City respectively..
The company is planning to invest Rs 400 crore over the next three years. The investment will be made in adding 22 new stores which will see an investment of Rs 330 crore . Hyper City will have ten more stores.
"We are generating Rs 130 crore cash every year so we are comfortably placed for funding the Rs 400 crore investment," Shrikhande said.
FDI In retail
"Not worried about it," he said. If brought in with the right checks and balances, FDI will help India's economy grow faster. "We are not worried about it because only local department stores dominate the markets globally," he added. The biggest global hyper markets are already operational in India. The company can look at structural arrangements with them, he said.
Watch video ....
Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.
Updated Date: Dec 20, 2014 04:33:41 IST