Shoppers Stop is now in expansion mode, having exited some of its non-core retail ventures, thus enabling it to focus on the department store business. With an addition of over 1msf over FY11E-FY13E, increasing the retail space by more than 33% to 3 msf, we expect the company to leverage on its business model and brand equity.
The company focuses on large box formats of Shopper’s Stop (average store size 60,000sf). These stores offer apparel (60%) and non-apparel merchandise (40%) for men, women and children. Private labels contribute around 20% to the revenue. The company plans to add 18 stores over the next three years. 40% of the company’s revenues come from Western India. The focus will be on metro cities and select Tier-2 cities.
Shoppers Stop derives 37% revenues from the West and 24% from South and 27% from the North while East is mere 12%. For FY 2009, the average Transaction Size of a customer was Rs 1,400. Each store can break-even within 18 months of operation.
In Hypercity, the company has an increasing presence in the under-penetrated hypermarket business, where there is visible growth Shopper’s Stop owns 19% of Hypercity with the option to buy another 32% by June 2010. Hypercity’s product mix can be broadly categorised into Food, Fashion and General Merchandise. The product range covers foods, home ware, home entertainment, hi-tech, appliances, furniture, sports, toys & fashion. Currently, there are six Hypercity stores in the country.