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‘Nature’s Basket’, a wholly-owned subsidiary of Spencers Retail, is expected to break-even over the next two years.
Earlier this year, The RP-Sanjiv Goenka Group had acquired the premium grocery brand, Nature’s Basket, from Godrej for Rs 300 crore.
Although not listed, Nature’s Basket reported a loss of around Rs 60 crore and had a turnover of over Rs 300 crore in FY-19. Spencers Retail, listed on NSE and BSE, had, on the other hand, reported a revenue of Rs 2187 crore and a net profit of Rs 8 crore, last fiscal.
According to Shashwat Goenka, Sector Head – Retail and FMCG at RP-Sanjiv Goenka Group, the brand would add at least 10 per cent to Spencers Retail’s topline; while impact on bottomline is expected after it turns profitable.
“Nature’s Basket is expected to be profitable in two years. But, it will help Spencers Retail generate around 10 per cent additional revenue in FY-20,” he said on the sidelines of inauguration of the first Nature’s Basket store in Kolkata.
Plans are also afoot to close down three unprofitable stores in Mumbai. “These stores are loss-making primarily because of their location,” Goenka added.
Ramping Up
According to him, plans are afoot to have at least 12 more Nature’s Basket stores this year, concentrating primarily on west and eastern India. The brand is predominantly present in Mumbai, Pune and Bengaluru through 35 stores. Around eight of the new stores will be in the east, mostly Kolkata.
This apart, some of the larger stores, covering around 4000 sq.ft or so, will be revamped to include a café. Goenka, however, did not share the capex that would go towards setting up new stores and the revamp of existing ones.
“We would like to take Nature’s Basket is geographies where Spencer’s has a presence and the market is ready for premium offerings. We would not like to cannibalize the brands with similar offerings across one another,” he said adding that while Spencer’s will be positioned more towards monthly groceries and apparels; Nature’s Basket will focus on gourmet.
In terms of positioning, Nature’s Basket average bill value comes to the tune of Rs 3000, as compared to Spencer’s that has an average bill value of Rs 1600.
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