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Anna Peter

"It is due to open another store in Gurgaon in the next two weeks, and one each in Kolkata and Mulund in February 2003. By 2005-06, the company was targetting a Rs 800-crore-plus turnover and planned to add four new stores to its chain every year."

The Shopers' Shop outlet in Chennai.

MUMBAI, Dec. 31

SHOPPERS' Stop is expecting to cross Rs 400-crore turnover at the end of the next financial year, according to Customer Care Associate and Managing Director and CEO, Shoppers Stop, Mr B. S. Nagesh.

The company also managed to post a net profit of Rs 15 lakh on a Rs 242-crore turnover last year.

It is due to open another store in Gurgaon in the next two weeks, and one each in Kolkata and Mulund (a Mumbai suburb) in February 2003. Mr Nagesh said that by 2005-06, the company was targetting a Rs 800-crore-plus turnover and planned to add four new stores to its chain every year.

With a setting-up cost of Rs 7 crore for each outlet, Mr Nagesh defended the plan as an "ambitious" one and its success would hinge on spreading corporate costs. Each store, he said, was being run as a profit centre and business was to be scaled up in the first five years by 25-30 per cent every year. The idea, he said, was to set up scale and then increase topline. Setting up special hubs were expensive and there was unlikely to be much expansion in the East.

To whether the expansion into small towns would prove successful, Mr Nagesh said that their experience in Jaipur was a learning one. Western influences, the media, TV, and greater spending power had raised aspiration levels for small-towners with large disposable incomes. But, it was wrong to assume that since they were operating in a smaller town, operation costs would be lower.

In the last five years large stores have become more successful and, according to Mr Nagesh, research had shown that 18-20 per cent of the products sold were branded and there was much scope for customers to switch brands or stray into other areas of buying. The company's brands would only comprise 25-30 per cent, perhaps even 40 per cent, of what was on offer, but its selling point would be the potpourri of products on sale.

On how to deal with 2005, Mr Nagesh said that a level playing field was required and that would mean removing subsidies and cross-subsidies in the textile industry. He said the small number of large-scale factories, huge taxes, octroi and sales tax were hurting the industry x disappointing considering the cheap labour and great fabrics available.

The positive side of 2005 would be the influx of international players. The Government, he said, needed to relent on FDIs in the retail sector, especially considering FDIs were allowed in insurance and the media. He said that it would ultimately lead to lower-priced-better-quality products and increased consumption x the best way to improve business.

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