The retail chain opened two new stores last week in Bhopal and Bengaluru. Its same store sales growth was 21%, which was a key factor that led to a jump in net profit
Shopper’s Stop Ltd reported a net profit of Rs10 crore and business turnover of Rs385.7 crore in the first quarter of the current fiscal. The company points out that same store sales growth (21% in the first quarter of the current fiscal) is a key factor which led to such dramatic profit figures.
“Our same store sales growth is 21% quarter-on-quarter basis, which is a big factor that contributed to growth in net profit. We reported marginal growth by 50 basis points; operating cost is down by 100 basis points; lease rental is down by 160 basis points; depreciation is down by 30 basis points and interest cost is down by 90 basis points on a quarter-on-quarter basis. All these factors constituted an increase in earnings before interest, taxes, depreciation and amortisation (EBITDA) figures from Rs15 crore to Rs25 crore and 297% jump in net profit,” said Govind Shrikhande, customer care associate and managing director, Shopper’s Stop Ltd.
The retail chain recently opened two new stores last week in Bhopal and Bengaluru. Earlier, it opened two stores in April 2010 — one in Amritsar and one in Malleswaram (Bengaluru). “We are still on track to open more than 10 stores in this current fiscal and add 5 lakh sq ft, by the end of this fiscal,” said Mr Shrikhande.
The company opened four new stores in the last three months (starting from April 2010 till July 2010).
The company is opening its next stores in Ahmedabad, Aurangabad, New Delhi, Durgapur and Mysore. In the next three years, the company will be operating in 26 cities, out of which eight to nine (outlets) will be in Tier-II cities.
“We are expanding in Tier-II cities because we have received a good response from our stores in Lucknow and Jaipur. We are opening a second store in Jaipur,” said Mr Shrikhande.
In the first quarter which ended in June 2010 of the current fiscal, same store volume growth increased to 13.2%, combined with an average selling price increase of 2.9% on a quarter-on-quarter basis.
The company has decided to close down the ‘Arcelia’ format stores as it is an unprofitable store and unviable venture. Arcelia stores were targeted primarily towards women with brands in the categories of cosmetics, jewellery, watches, bags, footwear and sunglasses. It has currently one operational Arcelia store in Pune which it plans to shift to the new departmental store opening up in Pune soon. — Pallabika Ganguly
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