Shoppers' Stop plans to ramp up outlets  ( May '10,2004, BS)

Shoppers’ Stop, a part of the K Raheja group of companies, plans to add around 18-24 new stores in 36-48 months. The retail major currently has 14 stores across Mumbai, Delhi, Gurgaon, Bangalore, Hyderabad, Jaipur, Pune, Chennai and Kolkata.

B Nagesh, customer care associate & CMD, said, “From a 14-store business we will be anywhere between 30 and 35 stores in 36 to 48 months.

He also added, “In a worst case scenario, the company will continue to see a 30-35 per cent top line growth and the new stores will take about 18-24 months before delivering profits.”

Nagesh, however, ruled out the opening of the new stores in B-category towns and said the focus will be on metros and major cities.

Nagesh added, “If we are scaling up to 30-35 stores, we need a minimum investment of Rs 200-220 crore over three years. This will happen through internal accruals, partly through debt and partly through the proceeds of the issue and initial public offering.”

Commenting on the retail industry in the country, Nagesh said, “The organised retail business in India is estimated at Rs 90,000 crore, with Mumbai accounting for 10-12 per cent of the business.”

He also added, “The growth which is driving the retail segment is large enough to take in many more organised players to come in.”

On its forthcoming public offering, Nagesh informed that the draft Red Herring prospectus will be completed soon and thereafter it will be filed with the Securities and Exchange Board of India (Sebi).

Kotak Mahindra Capital, JM Morgan Stanley and Enam Securities have been given the mandate to manage the issue that is expected to provide an exit route to investors as also fund the ambitious expansion for the retail chain.

Currently, the capital restructuring is being completed to accommodate the IPO, he added. ICICI, IL&FS and Zodiac Clothing have invested in the company with their combined share holding reportedly at 18 per cent, while the balance 82 per cent is held by the Raheja group.