The Hindu Business Line : Shoppers’ Stop to stick to core business

Mumbai, March 24 Having crossed the Rs 1,000-crore turnover mark, Shoppers’ Stop would continue to target the top 12 per cent of the market, positioning itself as a premium retailer in the country. In fact, the retail major plans to stick to its core business instead of making inroads into new retail-related businesses.

Speaking to Business Line, Mr B.S. Nagesh, Managing Director, Shoppers’ Stop, said, “We are catering to the top 10-12 per cent of the market and these are consumers who do not need loans for buying goods.”

Staying away from offering easy credit to its consumers, although it continues to have a co-branded card with Citi Bank, Shoppers’ Stop does not believe in entering the area of financial services unlike its close competitors such as Reliance Retail and the Future group who are seeing it as a logical extension of their retail business.

Mr Nagesh said, “Financial services is a different business and we are not sure whether being a retailer we would be successful in it. As we do not have a credit validation process for giving loans, there is no need for us to get into financial services.” But in the case of Shoppers’ Stop promoted company HyperCity, there are categories such as consumer durables which could be financed through loans.

Citi Bank has already set up its desk at HyperCity to cater to loans required by consumers. With plans of scaling up its number of stores, Shoppers’ Stop recently launched a rights issue to raise Rs 500 crore.

“We need Rs 1,500 crore for our expansion in the next 3-4 years and will be raising the same partly though a rights issue, borrowing and internal accruals.”

Denying market rumours about Shoppers’ Stop being up for sale with the possibility of retailers like the Future Group and Aditya’s Birla’s More retail chain picking up stake in the company, Mr Nagesh added, “Our promoters, the Rahejas, have never diluted their stake and there is no question of selling stake at this stage.” With seven new stores planned this year, Shoppers’ Stop expects to grow at a faster rate of 50 per cent compared to the previous years when it had growth rates between 30 and 35 per cent.

HALL of fame

Meanwhile, there is another feather in the cap of this retailer as Mr B.S. Nagesh has become the first Indian retailer to be inducted into the World Retail Hall of Fame for 2008. The Hall of Fame includes veterans such as Giorgio Armani, Jack Cohen and Anita Roddick.

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