Hypercity to turn around this year, says Shoppers Stop chief

The Hypercity format of retail chain Shoppers Stop Ltd is expected to turn around this year, thanks to an all-round restructuring exercise the company has executed, Managing Director Govind Shrikhande said.

The format, which accounted for around ₹900 crore in sales in FY-14 – around 20 per cent of the company’s consolidated revenue – had suffered a loss of ₹50 crore in gross earnings and a net loss of ₹100 crore.

The carry-forward loss over the years is around ₹400 crore.

“We have right sized the Hypercity format, reducing the store size to 30,000-40,000 sq ft against the earlier 1.5 lakh sq ft size,” said Shrikhande, adding the sales mix has also been rejigged. “We cut the food content from 75 per cent earlier to 65 per cent, exited the electronics business altogether and made fashion 15 per cent, up from 5 per cent earlier.”

These measures are poised to turn around the business this fiscal, he said.

Hypercity will report operating profit this year and profit after tax next year.

It would take around three years to wipe out accumulated losses completely, Shrikhande added.

Shoppers Stop, which has 15 Hypercity stores across the country, is adding two more every year.

The company plans to invest a total of ₹180 crore till the end of the next fiscal to set up 10 Shoppers Stop outlets this year and eight more next year.

Six new outlets have already been opened this year, the latest at Magarpatta City in Pune. This is the fourth in the city and 72nd across the country.

The new initiatives include tie-ups with designers and launch of new brands.

Shoppers Stop, which reported a revenue of ₹4,200 crore last fiscal, expects to see a a 15 rise this year, said Shrikhande.