Online
|
|
We have rationalised costs and fine-tuned our depreciation model
Posted by :
BAZEEGAR
Pallabika Ganguly (ML): Shopper`s Stop reported healthy numbers for the second quarter. Do you think the good show will continue in the next quarter as well?
Govind Shrikhande (GS): In the retail sector, the third quarter is always the best quarter because of the festivals, new-year celebrations and commencement of the marriage season which lasts till May-June next year. Last year, sales were affected following the terror attack on Mumbai. The slowdown continued till March this year. But the business environment has changed since then and I don’t see any problem in repeating our second-quarter performance. There are three key reasons for the improvement: first, the overall climate is definitely improving, as we can see from the revival across several industries, and consumer confidence is high; second, the European and US economies are showing signs of recovery; and third, Shopper’s Stop is a good brand and we have upgraded our merchandise and also launched many new brands. With an increasing, loyal customer base of around 14 lakh, I feel we will be able to do well in the coming quarters.
ML: How have you managed to cut operating expenses?
GS: During the first and second quarters, we were able to cut our operating costs by around 600 basis points. We achieved this through multiple measures. We reduced our employment cost by 15% to 18%, including a 15% salary cut of top management. We reduced our electricity consumption by 14%. We are also shifting to Tata Power from Reliance Infrastructure, which would help up to reduce our electricity cost. We have also cut down on advertising. Last year, we had to spend around Rs14 crore on our logo change, but this year, this cost was not there. Besides, we have also cut down our usage of office space by 15%.
ML: During the second quarter, Shopper’s Stop reported operating margins (OPM) of 7%, while there are several retailers across the country operating on a very thin margin. Will it improve?
GS: Instead of OPM, we prefer to use EBITDA (earnings before interest, taxes, depreciation, and amortization) to measure performance. Over the next 18 months, we should be able to achieve an EBITDA of 8.5%. When we talk about the margins of retailers across the country, we need to look at three relatively big segments: the hypermarkets & supermarkets where OPMs are below 20%, departmental stores where OPMs are 30%-35% and the electronics segment where OPMs are less than 10%.
ML: During the second quarter, your net profit rose 200% to Rs12.1 crore. What are the factors responsible for this growth?
GS: We worked on our depreciation policy, which gave us a swing of 500 basis points, while saving on operating costs and increasing cash margins. Earlier, we used to renovate our stores every three years. But after some research and analysis, we found that there is no need to renovate every store every three years—we can do it over a period of five to seven years. With an EBITDA of less than 5%, depreciation of 4% and interest cost of 1.5%, our overall net profit was impacted. Our auditors and board members then reviewed our depreciation policy and found that we were actually over-depreciating our entire assets. We realised that the competition was using a completely different method of depreciation and our depreciation rates were nearly two-and-a-half times higher. So, we revisited the whole policy and decided to apply depreciation rates as per the category. For example, computer and IT infrastructure gets outdated over a three-to-four-year period, so we adjusted our depreciation rate accordingly. We increased the depreciation period to seven years for furniture and to 12 years for ceiling & flooring. Earlier, we used to bundle everything into a three-to-five-year depreciation cycle.
...
NSE Announcements on Shoppers Stop
Posted by : MMB MessengerShopperS Stop Limited has informed the Exchange that a meeting of the Board of Directors of the Company was held on November 14, 2009, where the Board considered various fund raising options by further issue of capital including Qualified Institutional Placement/ Preferential Issue/ Right Issue etc. The Board has, after discussions, resolved as follows.: To approach the shareholders to seek their consent regarding offer, issue and allotment of upto 4,000,000 equity shares of the Company of Rs.10 each and/or any other securities convertible into equity shares, such equity shares or securities upon conversion not exceeding 4,000,000 equity shares of the Company of Rs.10 each in one or more tranches, by way of a Qualified Institutional Placement to Qualified Institutional Buyers, whether or not such Investors are existing shareholders of the Company; and As any further issue of capital by the Company is likely to result in dilution of the shareholding of the promoters and the promoter group, in order to prevent any dilution of the aggregate shareholding of the promoters and promoter group of the Company, the Board also resolved to approach the shareholders to seek their consent regarding the offer, issue and allotment, in one and or more tranches, by way of preferential issue, upto 4,000,000 warrants, each convertible into one equity share of the Company of Rs.10/- each at a price determined in accordance with Chapter VII of the SEBI ICDR Regulations, to certain identified members of the promoter and promoters group of the Company....
BSE Announcements on Shoppers Stop
Posted by : MMB Messenger
Shoppers Stop Ltd has informed BSE that the Board of Directors of the Company at its meeting held on November 14, 2009, inter alia, has considered various fund raising options by further issue of capital including Qualified Institutional Placement / Preferential Issue / Right Issue etc. The Board has, after discussions, resolved as follows:
To approach the shareholders to seek their consent regarding offer, issue and allotment, of upto 4,000,000 equity shares of the Company of Rs. 10 each and / or any other securities convertible into equity shares, such equity shares or securities upon conversion not exceeding 4,000,000 equity shares of the Company of Rs. 10 each in one or more tranches, by way of a Qualified Institutional Placement to Qualified Institutional Buyers, whether or not such investors are existing shareholders of the Company; and
As any further issue of capital by the Company is likely to result in dilution of the shareholding of the promoters and the promoter group, in order to prevent any dilution of the aggregate shareholding of the promoters and promoter group of the Company, the Board also resolved to approach the shareholders to seek their consent regarding the offer, issue and allotment, in one or more tranches, by way of preferential issue, upto 4,000,000 warrants, each convertible into one equity share of the Company of Rs. 10/- each at the price determined in accordance with Chapter VII of the SEBI ICDR Regulations, to certain identified members of the promoter and promoters group of the Company....
BSE Announcements on Shoppers Stop
Posted by : MMB MessengerShoppers Stop Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on November 14, 2009, to consider various fund raising options by further issue of capital including Qualified Institutional Placement / Preferential Issue / Right Issue etc....
NSE Announcements on Shoppers Stop
Posted by : MMB MessengerShopper’S Stop Limited has informed the Exchange that "The Remuneration/ Compensation Committee have allotted 4,726 Equity shares of Rs.10 each on October 29, 2009 under ESOP Schemes of the Company. The brief details is as under : (1) ESOP Scheme : ESOP III; No of Shares : 1,025; Exercise Price (in Rs.) : 150. (2) ESOP Scheme : ESOP IV; No of Shares : 3,701; Exercise Price (in Rs.) : 240. Total No of Shares : 4,726"....
NSE Announcements on Shoppers Stop
Posted by : MMB MessengerShopperS Stop Limited has informed the Exchange vide notes to Accounts in the unaudited Financial Results for the quarter/Half year ended September 30, 2009 (taken on record by the Board of Directors of the Company at its meeting held on October 29, 2009) that: "Out of the Rs. 16,531 lacs raised by the Company through its Initial Public Offerings (IPO) in April 2005, Rs. 16,426 lacs were utilized towards the objects of the IPO. The unutilized balance of IPO proceeds have been utilized in temporarily reducing exposure to working capital borrowings"....
BSE Announcements on Shoppers Stop
Posted by : MMB Messenger
Shoppers Stop Ltd has informed BSE that Remuneration / Compensation Committee have allotted 4,726 Equity shares of Rs. 10 each on October 29, 2009 under ESOP Schemes of the Company. The brief details is as under:
1. ESOP Scheme: ESOP III
- No. of Shares: 1025
- Exercise Price (Rs): 150
2. ESOP Scheme: ESOP IV
- No. of Shares: 3701
- Exercise Price (Rs): 240....
NSE Announcements on Shoppers Stop
Posted by : MMB MessengerShopperS Stop Limited has informed the Exchange regarding a press release dated October 29, 2009, titled "Shoppers Stop Ltd Q2FY10 Gross Retail turnover at Rs. 41,329 lacs; up 11%; EBITDA at Rs. 2,667 lacs; Jump of 313%". A copy of the press release shall be available on the NSE website (http://www.nseindia.com) under: Corporates > Latest Announcements and on the Extranet Server (/Common/Corporate Announcements)....
BSE Announcements on Shoppers Stop
Posted by : MMB MessengerShoppers Stop Ltd has informed BSE regarding a Press Release dated October 29, 2009 titled "Shoppers Stop Ltd Q2FY10 Gross Retail turnover at Rs 41,329 lacs: up 11%". ...
BSE Announcements on Shoppers Stop
Posted by : MMB MessengerShoppers Stop Ltd has informed BSE about the Financial Results for the Quarter ended September 30, 2009. ...
NSE Announcements on Shoppers Stop
Posted by : MMB MessengerShopperS Stop Limited has informed the Exchange that: "(1) one Crossword franchisee store has been opened at Bangalore and (2) one Crossword store at Shoppers Stop, Hi-Tech City, Madhapur, Hyderabad has been opened by the Company. With these, the Company has now 55 Crossword stores"....
BSE Announcements on Shoppers Stop
Posted by : MMB Messenger
Shoppers Stop Ltd has informed BSE that :
1. one "Crossword" franchisee store has been opened at Bangalore; and
2. one "Crossword" store at Shoppers Stop, Hi-Tech City, Madhapur, Hyderabad has been opened by the Company
With these, the Company has now 55 "Crossword" Stores. ...
BSE Announcements on Shoppers Stop
Posted by : MMB Messenger
Shoppers Stop Ltd has informed BSE that the Company has opened its "Shoppers Stop" store at Inorbit, Cyberabad, Hyderabad on October 14, 2009.
With the opening of this store, the Company has now 28 "Shoppers Stop" stores under its operation....
BSE Announcements on Shoppers Stop
Posted by : MMB MessengerShoppers Stop Ltd has informed BSE regarding a Press Release dated October 16, 2009 titled "Mothercare PLC Accelerates its Expansion plans in India"...
NSE Announcements on Shoppers Stop
Posted by : MMB MessengerShopper’S Stop Limited has informed the Exchange regarding a press release dated October 16, 2009, titled "MotherCare Plc Accelerates its Expansion Plans in India". A copy of the press release shall be available on the NSE website (http://www.nseindia.com) under: Corporates > Latest Announcements and on the Extranet Server (/Common/Corporate Announcements). ...
