Shoppers Stop bets big on private labels

After witnessing consecutive quarters of falling volumes

and margins, India’s oldest organised retailer Shoppers Stop is looking for ways to deal with the situation. Like other apparel retailers, it has decided to raise the share of its private labels to gain better margins. The three main brands — Stop, Haute Curry and Live — bring in 15-16 per cent of sales for the company. Now it plans to increase it to 20-22 per cent by introducing new private labels.

The chain is holding consumer events and correcting merchandise mix at Crossword book stores to improve its top line and margins. Net losses widened to Rs 11 crores in Q1 of the current financial year from Rs 1.5 crores in the corresponding quarter of last financial year. On a standalone basis, its profit dropped 96 per cent due to increase in costs. After a gap of 8-10 quarters, the share of private labels at Shoppers Stop has gone up by 70 basis points in the June quarter on a yearly basis, and the company wants to take it to about 19 per cent over the next three years.

Recently, Reliance Capital Asset Management and Reliance Capital Trustee Company bought 17.40 lakh shares in the retail chain for over Rs 51 crores through an open market transaction.

Besides its flagship Shoppers Stop, the group also operates Hypercity, Home Stop (home retailing) and specialty stores like Crossword, MAC and Mothercare. Hypercity has been the biggest drag.