News: Shoppers' Stop readies Rs 500 cr expansion

(DNA 04/05/2007) Shoppers' Stop, which failed to fully implement its expansion plan last fiscal, now plans to more than make up for it this fiscal. The company has drawn up a Rs 500 crore expansion plan across its various businesses. The company's board has approved a rights issue of this size and only the details need to be worked out.

"We were able to open only one new Shoppers' Stop store against the 4-5 targeted last fiscal. Now, we are looking at opening 5-6 stores within the first half of this fiscal. Our board has already approved a rights issue of about Rs 500 crore and we will now decide which route to take - preference or warrants," said managing director B S Nagesh, addressing a conference call with analysts

On the challenges, Nagesh said in the Speciality Stores business (Crossword bookstores and Mothercare), some downsizing may be imminent and the company may perhaps exit some store in certain locations. Last quarter, three Crossword standalone stores were opened.

Outlining the major investments planned over the next 3-5 years, Nagesh said investments were needed in Nuance (JV for airport retailing), HyperCity Retail, and another JV company Argos and in expanding Shoppers' Stop's own network.

Shoppers' Stop also plans to raise its stake in HyperCity Retail to 51per cent by next year. The company, which recently exercised its option of acquiring 19% stake in HyperCity, invested only Rs 19 lakh for the purchase."This 19 per cent will move to 51 per cent gradually by December 2008," Nagesh said.

HyperCity, a part of K Raheja Corp, currently has only one operational store at Malad in Mumbai. It offers a host of items including groceries, fresh foods, home needs, garments and consumer durables.