Shoppers Stop high on profits

Friday, 20 August 2010

Shoppers Stop reported a net profit of Rs 10 crores and a business turnover of Rs 385.7 crores in the first quarter of the current fiscal. Same store sales growth of 21 per cent in the first quarter of the current fiscal is a key factor which led to such dramatic profit figures. Also, the retail chain opened two stores recently in Bhopal and Bangalore. Shoppers Stop reported marginal growth of 50 basis points. Operating cost was down by 100 basis points, lease rental was down by 160 basis points, depreciation was down by 30 basis points and interest cost was down by 90 basis points on a quarter-on-quarter basis. All these factors constituted to an increase in earnings before interest, taxes, depreciation and amortization from Rs 15 crores to Rs 25 crores -- a 297 per cent jump in net profit.

The company opened four new stores in the last three months from April to July and is on track to open more than 10 stores in this fiscal, adding 5 lakh sq. ft. retail space. Next, the company will be opening stores in Ahmedabad, Aurangabad, New Delhi, Durgapur and Mysore. In the next three years, the company will be operating stores in 26 cities, out of which eight to nine outlets will be in Tier II cities. Moreover, the company’s Arcelia format will be shut down soon as it is an unprofitable store and an unviable venture. These stores were targeted primarily towards women with brands in the categories of cosmetics, jewelry, 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.

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