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Start Something New


Presented by :

ROLL NO. NAME

68 Sumaiya Dalal

88 Rahul Mahabare

105 Himshree Shelar

108 Prashant Soni

109 Deepak Supal

M.E.T. INSITUTE OF MANAGEMENT


STUDIES AND RESEARCH
MUMBAI

INDEX

1
No. Topic Page
No.
1 Overview of Retail Industry 3
2 Shoppers Stop Management 5
3 Company Profile 6
4 History 7
5 Shoppers Stop Stores 9
6 Vision & Values 12
7 Product Profile 13
8 Milestones 14
9 Logistics 18
10 Sales & Financial Analysis 24
11 Achievements 32
12 Future 33
13 Conclusion 33
14 Bibliography 34

2
Overview of Retail Industry In India
The size of the Indian retail industry was pegged at USD 300 bn in 2006,
accounting for nearly 39% of GDP and almost 62% of private final
consumption expenditure (PFCE). The 2007 Asia-Pacific Wealth Report,
released by Merrill Lynch and Capgemini, says that India has recorded the
world's second-fastest growth in the number of high networth individuals at
20.5 percent, making it a lucrative luxury.
The retail landscape in India is gradually evolving and likely to reach a
size of USD 453 bn in the near future. Over the last decade, the share of modern
retail has been gradually improving from below 1% in 1999 to 4.1% currently.
The growth has been more rapid 2004 onwards. Growth in consumption,
coupled with the growing prosperity of the new age consumers, is driving this
acceptance of modern retail.
Despite rising share of organized retail in India, its penetration is
miniscule in comparison with the penetration in developed economies which
stands at 75-85% and at 20-40% in other emerging markets.
In the backdrop of low penetration, favourable demographics, steady
economic growth, easy availability of credit, and large scale real estate
developments, the modern retail sector is poised to grow robustly at a 42%
CAGR , to reach a size of USD 70 bn; its share in total retail is likely to
improve from 4.1% currently to 15%. This growth is mainly on the back of
changing customer aspirations and improving retail real estate infrastructure in
the country. The growth could be even higher, if the Indian consumers have to
leap-rog evolution cycles, as they did for the mobile phones in the past.
India has been rated as the most attractive retail destination in the world
by AT Kearney for the third year in a row; the company's annual Global Retail
Development Index (GRDI) ranks 30, selected from a universe of 185
countries, on a 100 point scale (based on country risk, population size, and
wealth) to find out the relative attractiveness of these markets.

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Retailing in India is currently at an inflexion point. The main factor
announcing the significance for the retailers is the current optimal stage of
readiness for retail and the entry of retailers into India. AT Kearney classifies
retail markets worldwide and their study shows that retail markets progress
through four stages as they evolve from an emerging to a mature market,
usually over 5-10 years. These stages are opening, peaking, declining, and
closing. India is currently very attractively placed in the peaking stage.

Shoppers Stop Management

4
• Chandru L Raheja- Chairman / Chair Person
• Ravi C Raheja- Director
• Neel C Raheja- Director
• Gulu L Mirchandani- Director
• Shahzaad S Dalai- Director
• Nitin Sanghavi- Director
• Deepak Ghaisas- Director
• Nirvik Singh- Director
• R S Nagesh- Managing Director
• Govind Shrikhande- Executive Director & CEO
• Chandru L Raheja- Chairman / Chair Person
• Ravi C Raheja- Director

Company Profile

5
SSL is part of the K Raheja group with interests in real estate
development, hospitality, and retail. Before incorporation, the Mumbai and
Bangalore stores were run by a division of Ivory Properties & Hotels Ltd.
(IPHL) under the brand named Shoppers’Stop. It began retailing ready to wear
men’s wear and thereafter, added women's wear in 1992, children’s section and
cosmetics, perfumes and accessories in 1993. The retail business division of
IPHL launched a loyalty program for its customers in 1994under the name of
First Citizen's Club and opened its second store in Bangalore in 1995. SSL was
incorporated in 1997 after which the business was transferred to the new entity.
SSL has 4 subsidiaries.
Crossword: Crossword Bookstores Ltd. was incorporated on November 3,
1999. The company is now a 100% subsidiary company of SSL. It held 51%
stake with an option to acquire balance 4.68m equity shares of Rs.10 each held
by ICICI Emerging Sectors Fund in Crossword Bookstores Ltd. In July 2005
SSL acquired the balance 49% stake in Crossword from ICICI Trusteeship
Services Ltd., Trustee of ICICI Emerging Sectors Fund.
Upasana: UTL was incorporated on December 8, 1995 as a 100% subsidiary. It
currently handles SSL’s distribution and logistic function and operates through
four distribution Centers located in Mumbai, Bangalore, New Delhi, and
Kolkata.
Shopper stop.com: The Company was incorporated in 2000 for selling apparel
and accessories over the Internet based on the recognition that this would be an
important medium for sales, as an online extension of Shopper’s Stop Ltd. As
the online sales were not commensurate with the total capital expenditure
incurred operations were discontinued in February 2001.

Shopper Stop Services India Ltd: SSSIL was incorporated in 2000 and is
currently engaged in providing accounting services and consultation to SSL.
Currently this subsidiary has limited operations.

6
History
Incorporated as a private limited company on June 16, 1997, Shoppers
Stop became a deemed public limited company on December 8, 1997. Pursuant
to an amendment to the Companies Act in the year 2000, Shoppers Stop was
converted from a deemed public company to a full fledged public company
with effect from October 6, 2003.
Prior to incorporation two of Shoppers Stop’s existing stores at
Mumbai and Bangalore were run by a division of Ivory Properties & Hotels
Limited (IPHL) under the brand named Shoppers' Stop. Soon after Shoppers
Stop incorporation, IPHL executed a conducting agreement with it dated
November 3, 1997 giving them a right to participate in running the
departmental stores which included the right to use;
(i) The Mumbai Shopper’s Stop property
(ii) The Bangalore Shoppers' Stop property
(iii) The agreements and arrangements with various parties relating
to purchases, sales, franchises and co-sponsorship
(iv)The brands developed
(v) The diverse modes of rendering services to the customers
(vi)The data bank of Shopper's Stop, the membership of the First
Citizen’s Club etc;
(vii) The software, various systems and training programmes
(viii) Books and cassettes providing knowledge for retail trade,
(ix) The business sport systems and
(x) The names of the stores and logos of the stores.

This agreement was terminated and a fresh Conducting Agreement was


executed with IPHL dated March 31, 2000.Shoppers Stop initially acquired
790 equity shares of Rs 100 each in UTL from some of the existing
shareholders and increased their stake in the company to 1265 Equity Shares
(25.3% of the equity capital) on March 23, 1999 at a purchase price of Rs.100

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per share. UTL was a trading company, and was one of their suppliers for
garments and accessories. Shoppers Stop enhanced their stake in UTL to 100%
in February 2000.

UTL has discontinued its trading operations from January 2003. UTL
handles the distribution and logistic function since February 2000
and now operates through four distribution centers located in Mumbai,
Bangalore, New Delhi and Kolkata.

Shoppers' Stop Services (India) Ltd was incorporated as a wholly


owned subsidiary in March 2000 to provide shared services and
consultation, in accounting and logistics operations. Currently,
this subsidiary has limited operations.

Shoppers' Stop.Com (India) Ltd was incorporated in February 2000 as


a wholly owned subsidiary to provide on-line shopping facilities to
the customers. As this venture did not yield desired results, its
operations were discontinued in February 2001.

Profound Readers' Choice Trading (India) Ltd was incorporated in


November 1999 as our subsidiary and acquired `Crossword', a chain of
books and music stores, from India Book House Ltd (IBHL) under
trademark and style of Crossword, as a going concern by way of slump
sale on March 31, 2000. The Crossword Division from IBHL was
acquired at a purchase consideration of Rs.137.5 mn for the whole of the
acquired business undertaking. The Deeds of Assignment between IBHL
and Profound Readers' Choice Trading (India) Ltd were signed on March
31,2000 & July 5, 2000 for assignment of trademarks of Crossword.

Profound Readers' Choice Trading (India) Ltd changed its name to


Crossword Bookstores Ltd (Crossword) and has ICICI Trusteeship
8
Services Ltd a/c ICICI Emerging Sectors Fund as it's equity investor holding
49% of its equity, and is governed by a separate shareholders'
agreement.

Shoppers Stop Stores


Gateway Multichannel Retail (India) Ltd; a subsidiary of Shoppers Stop has
opened its first store "Hypercity Argos" at Thane in Mumbai and a department
store at MGF Saket, in New Delhi.
With these launches, the company says it has 23 "Shoppers Stop" stores under
its operation.
Shoppers Stop already operates its other formats- Arcelia, HomeStop,
Crossword, Mothercare, Mac and Clinique, a top cosmetic brand has opened for
the first time in India through a stand alone format, Select Saket, City Walk
Mall in Saket, New Delhi.
The company now has the following Shopper's Stop and other brand stores
under its operation. These stores are either Shop - in Shop Stores i.e. within the
existing stores or as a separate stand alone store at various locations.
So far the company operates 23 stores under Shopper's Stop, three under
Homestop, two under Arcelia, one airport retailing store branded 'Stop & Go'.
Moreover, it has three outlets under the MAC banner, 24 F&B outlets under the
'Brio' or 'Desi Café' brands (of which two outlets are Food Courts), a solitary
outlet under the 'Clinique' flag, 10 shop-in-shop bookstores under the
'Crossword' banner in addition to 36 standalone 'Crossword' stores, and eight
shop-in-shop Mothercare outlets, and an equal number of eight stand alone
Mothercare stores.

Crossword

9
SSL has presence in the books and music segment through its 100% subsidiary
Crossword, which is a lifestyle bookstore positioned to attract a wider audience
than a normal bookstore. Its product mix includes a wide range of books,
magazines, CD-ROMs, music, stationery, and toys. It also offers services like
Dial-a-book, Fax-a-book, and Email-a-book so as to enable customers to shop
from their homes. It has a loyalty base of around 80,000 customers
Crossword has won the award for Best Retailer in Leisure (books, music and
gifts category) at the Images Retail Awards 2005.
Expand with smaller formats
SSL is planning to add around 44 Crossword stores most of them as smaller
format stores with a size of 1000-12000 sq. ft. to ensure quicker break even.
The company is planning to run the Crossword stores as a franchise with the
intention of rationalizing the expenses and avoid duplication. Crossword will
continue to get its franchise fee from all the franchisees other than Shoppers
Stop.

HOMESTOP
SSL opened its first home store in December 2005 in Bangalore. Product
categories include home furnishings, furniture, kitchen, bed, bath, lighting
equipment, and home decor. SSL already has presence in the home furnishing
segment through its SS department store format. But the share is less than 5%
of revenue. SSL expects gross margins of around 30% from the business in the
long run.

M.A.C.
SSL entered into a retail agreement with world-renowned cosmetics major –
Estee Lauder to open M.A.C. stores as selective distribution in India. The first
M.A.C. store was opened at Juhu, Mumbai in June 2005. The company intends
to keep this format niche and is hence not planning any aggressive expansion on
this front. The margins expected in M.A.C. stores are around 35%. It has the

10
clearance to go from 1 to 5 in the next 12 months’ time but we have not
assumed any expansion in our estimates.

MOTHERCARE
SSL has entered into an exclusive franchisee agreement with Mothercare plc of
UK to open Mothercare stores in India. It plans to rollout over 40 stores in the
next 3 years. SSL currently has 5 shop-in-shop Mother care stores. This store
has helped SSL broaden its customer group to include new mothers and infants.
It will also benefit any future product extension to include children in the age
group 1-6 where there is currently a vaccum.

BRIO
SSL has made a strategic alliance with Blue Foods Ltd., a Mumbai based
company that owns 5 major F & B brands and has 45 restaurants across the
country. The first of the series, BRIO – The cafe bistro, was opened inside
HomeStop at Bangalore in the month of March 2006. In the month of April
2006, the second BRIO Store was opened in Juhu.

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Vision

To be a global retailer in India and maintain its No. 1 position in the Indian
market in the Department Store category.

Values
The following are the values that help Shoppers Stop in achieving their mission
and vision:
• We shall not take what is not ours.
• The Obligation to dissent (against a viewpoint that is not acceptable).
• We shall have an environment conducive to openness.
• We shall believe in innovation.
• We shall have an environment conducive to development.
• We shall have the willingness to apologise and/or forgive.
• We shall respect our customers' rights.
• The value of trust.
• We shall be fair.

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PRODUCT PROFILE
Shoppers Stop stocks both apparels and non-apparels. The popular
brands under them are as follows:
Apparel
Men Allen Solly, Arrow, Mufti, Zodiac, Indian Terrain, etc.
Women And, Sepia, Elliza Donatein, Kraus, Haute Curry, etc.
Kids Barbie, Stop, Pique, Ruff, etc.
Non Apparel
Men’s Accessories Casio, Ray Ban, Cross, Police, Ferrari, etc.
Women’s Hidesign, Esprit, Giordano, DKNY, Fastrack, etc.
Accessories
Fragrances Nautica, Adidas, DavidOff, Calvin Klein, Ferragamo, etc.
Skin & makeup L’Oreal, Biotherm, Chambor, Maybelline, Lakme, etc.
Home & Travel Portico, Featherlite, Case Logic, Samsonite, Giordano, etc

FIRST CITIZENS
According to, BS Nagesh, managing director and CEO of Shoppers’ Stop, the
company has given a new direction to its CRM initiatives after it acquired a business
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intelligence software called ‘Business Solutions’. The new software helps generate
intelligent data from Shoppers’ Stop customer base of about 2,30,000. The company then
collects this data and touches base with customers via direct mailers informing them of all
new promotions that is currently on and also updates them about the upcoming events.Under
the Customer Experience Management program the members are called “First Citizens”.
First Citizens are rewarded points and exclusive benefits and privileges such as:
• Reward Points for every time you shop at Shoppers' Stop
• Exclusive offers ever so often.
• Updates on what you can look forward to shop for at Shoppers' Stop.
• Exclusive cash counters at Shoppers' Stop so you can spend more time
shopping rather than waiting in a line.
There are three membership categories, i.e.
• Classic Moments
• Silver Edge and
• Golden Glow.
The company believes in providing the best experiences possible, including the
best benefits and privileges. The programme gets as rewarding as one makes it,
since it depends on the membership status, which is upgraded when one
qualifies with the necessary purchases during the membership period.
First Citizen Citibank Credit Card
The First Citizen Citibank Card - India's only co-branded store Card combines
the benefits of Shoppers' Stop's Loyalty programme, First Citizen with the
advantages of a Citibank Credit Card.
First Citizen Citibank Debit Card
The First Citizen ATM/Debit Card is India's first co-branded ATM/Debit card
in the retail sector. While it can be used as a regular debit card and also at an
ATM to withdraw cash, this card helps you collect reward points every time
you purchase merchandise at any Shoppers' Stop outlet.
• Automatic membership to First Citizen Shoppers' Stop Loyalty program for
those who are not First Citizen members yet.
• Earn Double Reward Points

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Strong First Citizen base – A measure of loyalty
Resent news is that shoppers stop has reach to its 2 million first citizen
members in 1st quarter of 2011. This number compares well with the First
Citizen number in FY05 standing at 400,000 and their revenue contribution at
50%. This loyal customer base is a measure of repeat purchase and at 63% it
indicates a healthy retention ratio. This again can be directly related to the
superior service provided at the stores.
This loyalty group gives SSL a competitive advantage in terms of repeat
business.

LOGISTICS
Hierarchy in the logistics department

1. Director Buying and Merchandising


2. Supply chain management head
3. Manager logistics and distribution
4. Distribution Coordinator (link between SS and DC’s)
5. Four Distribution Centres
I. Buying Channel
Shoppers stop has 4 regional distribution centres. Previously each store had its warehouse(DC) but
that turned out to be a wrong strategy as the flexibility was being affected and costs were building up.

15
There was also a lot of inventory pile up in each of these stores and hence added to cost in inventory
and transportation from one store to another to transfer excess inventory.

II. Procurement Strategy


Shoppers Stop has Centralized Procurement and no regional buying, the following are the benefits of
centralized procurement:

• Target profile same across the country


• Better Cost Controls
• Better Bargaining Power
• Better inventory management
• 100% inventory control
• 100% tracking of inventory – (what’s selling what’s not?)
III. Buying Process
Illustration

Purchase order for 5000 shirts of Arrow

Purchase order is a guarantee from shoppers stop that they will buy but supplier cannot dispatch
goods on PO. PO helps is reducing inventory cost as the goods are ready and stocked at the
manufacturers place, so no inventory pile up at the DC’s or stores. 4 purchase orders are sent by the
buying and merchandising manager for 4 DC’s.

For eg Vendor ABC gets 4 Purchase orders from shoppers stop, for four DC’s

Mumbai DC 2500 shirts catering to 6 stores

Banglore DC 1000 Shirts catering to 3 stores

Delhi DC 1000 shirts catering to 3 stores

Calcutta DC 500 shirts catering to 1 store

Delivery Authorisation for 500 Shirts

Delivery Authorization is an international system followed by all major retailers. DA is prepared on


the projected sales for that week. So if the PO (6monthly for 2 seasons) for all 13 stores is 5000 and
for a particular week shoppers stop sells 500 shirts, it will send a DA for 500 shirts. Thus with
delivery authorization system Shoppers Stop can place order according to the demand assessment
with the condition that it would pick up a fixed amt every week. Thus it doesn’t have to stock goods
at his place and block money in inventory. It also helps in better inventory management as it is based
on weekly projections. It is an assurance for both the Shoppers Stop as well as the manufacturer.

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Manufacturer dispatches the weekly requirements to the 4 DC’s according to the DA’s

DC’s check the details (date, number) of the product and match it with the invoice. Anything not
matching even if it is one piece is rejected. If accepted it causes a mis-match between the Purchase
Order and Delivery Authorisation. Hence the PO has to match with the Invoice carried by the
Manufacturer.

Accounts department receives confirmation in the system for the pieces physically accepted. The
accounts department can make payment that very second, in which they receive confirmation. This
process is so stable and fast because of being connected and fully integrated.

Once the confirmation is sent by the DC, the stocks are transported to the stores. Dispatches are
always made early morning. There is a PRE-RETAILING Team that receives the stocks and their
duty is to put them on display before 10.30 when the store opens, so that when the customer enters
everything is on display.

Stocks are updated in the store

IV. Warehousing
o Regional Warehouses
o No in-store warehouses
o Number of warehouses - 4
o Location – Metros (Mumbai, Delhi, Banglore, Calcutta)
o Floor Area – 20,000 to 22,000 sq.ft
o Transportation from warehouse to Store – Done by the DC’s
Distribution centers

Distribution centers for S.S are 100% outsourced to another company. Each of the distributions
centers has a floor area of around 22000 sq.ft.. The DC is divided in to zones and1000 based on the
brands or vendors. When a delivery comes in the person in-charge feeds in the details like
merchandise type, brand name, size, color, batch number, date, etc. the system give him a ticket
describing where the merchandise has to be kept. It gives a detailed description of the pile and rack
number. Thus, even if the person is unacquainted with the slots of the DC, the system will tell him
where to keep the merchandise. The systems are thus not dependant on any person and can work

17
independently. This whole activity is outsourced to another company who acts as a internal supplier
for SS. The delivery transportation from the DC to the stores is the DC’s task.

V. Inventory Management
SS has a system of checking stocks on a continuous basis. There are 90 departments at SS each day
one department is frozen after closing hours and the staff is made to scan the tags and feed in the
stock levels in the system. The staff is completely unaware of the stock levels according to the
system. The system then compares the actual to the customary and gives a variance reports. Thus
there is stock matching done everyday and the entire store completes a cycle in 3 months. That means
SS conducts 4 cycles of stock taking each year. This has helped them get the pilferage to its
minimum. As each day is accounted for and there is a complete match on a constant basis.

In the day inventory levels get collated store wise. While in the night this information gets polled in
the server and is integrated at the national level. Thus, each day the information on stocks available
for that day and at which store is made accessible to each and every store.

Every day Auto Replenishment:

Shoppers’ Stop has determined its minimum stock keeping units and as soon as the stocks in the store
touch that level, the DC is triggered to send the replenishment. Thus the system automatically checks
for stock out and replenishes it. The lead time for replenishment is 1 day. Every night data is collated
and a store-wise list of merchandise is generated. During the day the dispatched is made ready and the
next day morning 6.00am the truck leaves reaching the store in an hours time. The Pre-retailing team
display’s the stock and by 11am when the store opens their work has to be complete.

Stock keeping Units

Stock keeping units are determined on the basis of moving averages. The system generates averages
of the required quantities for the last two weeks. As the process is concurrent to the market conditions
they go up with the demand and fall with the slump. The minimum units are fixed which are based on
the past lows and highs.

How does the organization handle product discrepancies?

Saturdays and Sunday’s account for 40% of the week’s business hence most fluctuations are expected
on these two days. Inventory is stocked up on Friday based on the weekly forecast. But demand is
never really unpredictable at shoppers stop. product discrepancies takes place very rarely.

VI. Payment Models


Payment Systems: Shoppers stop uses 3 models for payments.

1. Outright Model:

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In this model the company picks up the total merchandise on the payment of cash or on credit terms
depending on the terms decided in the contract. They buy on outright 100% payment depending on
the normal credit terms of 10 to 15 days. The main advantage in this model is they can avail discounts
but if the stocks are unsold they incur losses as the last stage is that they have to be sent to charity!

2. Consignment Model- In this case the company pays only for the number of products they sell &
the unsold are given back to the vendor. Pay only for Sale. They have this model with Arrow Shirts,
wherein they put arrow shirts on display but pay only for the ones that are sold and the rest are
returned. The benefit here is, no inventory cost and no risks, but the margins are very low in this
model.

3. Concession Model- In this case space is given to another co. for opening a store within S.S
something like shop in shop. EG: Nali saree. The advantages are Fixed rentals and commission but it
suffers from low margins.

VII. Systems
o Secondary (Update Records) – ERP – JD Edwards
o Merchandise Management system and front end
o Warehouse Management system
o B2B website - S.S has around 400 vendors supplying around 450 brands. Most of the
vendors are connected to S.S B2B site. Each vendor can check the stocks and
movement of his merchandise. They can track which product is selling best in which
city and which one is not. The vendor need not call SS for information when all that
he wants is available by click of a mouse
Realizing the role of IT way back in 1991, Shoppers' Stop was among the first few retailers to use
scanners and barcodes and completely computerized its operations. Today it is one of the few stores
in India to have retail ERP in place which has now been integrated with Oracle Financials and the
Arthur Planning System, the best retail planning system in the world. With the help of the ERP, they
are able to replicate stores, open new stores faster and get information about merchandise and
customers online, which reduces the turnaround time in taking quick decision. Shoppers' Stop has
also set up a WAN system to link all units and distribution centers and facilitating seamless
operations across all the outlets.

Supply Chain Management

Realizing the importance of distribution and logistics in ensuring the availability of merchandise on
the shop floor, Shoppers' Stop has streamlined its supply chain. The company has developed process
manuals for each part of the logistics chain. These modules include vendor management, purchase
order management, stock receiving systems, purchase verification and inventory build up, generation
and fixing of price and store tags, despatch of stocks to the retail floor and forwarding of bills for
payment. The Company now has an off location warehouse and has also streamlined the layout of its

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Distribution Centre. Shoppers' Stop has also tied up with Sembcorp Logistics (P) Ltd. as its logistics
partner.

VIII. Transportation
o Manufacture to DC – Manufacturer handles
o DC to Store – DC handles
o DC to Vendor (Reverse Logistics) – AFL
o DC to DC – AFL
o Internal transfers between Stores - AFL
o Modes of Transportation - Tempos
Reverse Logistics

Reverse logistics comes in to action for 3 reason return due to

• Manufacturing defects
• Laying defects
• Consignment stocks – Stocks purchased on consignement basis need to be sent back if they
are unsold
• Line defect- Here the no. of complaints are more & the problem is also same across all the
sections so the product line itself is withdrawn from the stores across the country. For eg.
There is a constant complaint for arrow’s blue checks shirt. The entire stock for blue checks
in all the sizes is removed from the store and sent back to the manufacturer.
Process for Reverse logistics:

1. Physical transfer of goods from stores to DC’s


2. DC makes RTV(return to vendor)
3. System Debits the vendor

SHARE (S
HOLDING PATTARN
hareholdingPattern in %)
Promoter FII DII Others

7% 13%

12%

68%

20
SALES ANALYSIS
Rs. in Sales
1600
1,408.06
1400
1200 1,090.01
1000 867.00
799.6
800
588.19
600
400
200
0
Mar ' 06 Mar ' 07 Mar ' 08 Mar ' 09 Mar ' 10

Apparel:
The Apparel contribution to total sales of the company was 58.6% in 2007-08 as compared to 58.9%
in 2006-07. There has been growth in Non-Apparel segment which has resulted in Non-Apparel sales
percentage growing. This is primarily due to customer buying life style products.
Non-Apparel:
This category includes Cosmetics, Personal Accessories, Jewellery, Leather goods, Home Wares,
Electronics, Books and Music. These lifestyle products have high aspiration value, and as the
consuming class increases, there will be a big surge in the demand for this category. The Non-
Apparel contribution to total sales of the Company was 41.40% in 2007-08.

Gross Sales both at chain level and for Like-to-Like stores showed an improvement as compared to
last year. The growth was 34% in gross retail turnover. The sales per sq. ft. have been computed on
built-up area.

21
FINANCIAL ANALYSIS
Balance Sheet

Particula
rs Mar'10 Mar'09 Mar'08 Mar'07 Mar'06
12 12 12 12
Liabilities Months Months Months Months 12 Months
Share
Capital 65.63 34.87 34.86 34.83 34.38
Reserves
& Surplus 243.26 198.22 261.83 260.34 235.56
Net Worth 308.89 233.08 296.7 295.16 269.94

Secured
Loans 176.41 178.22 106.83 113.14 55.95
Unsecured
Loans 15 29.54 66.1 0 2.6
TOTAL
LIABILITIES 500.3 440.85 469.63 408.31 328.49
Assets
Gross
Block 457.66 403.45 325.34 199.74 161.01
(-) Acc.
Depreciati
on 186.66 167.94 107.82 69 44.6
Net Block 271 235.51 217.52 130.73 116.41
Capital
Work in
Progress. 27.68 23.22 22.86 21.43 6.12
Investmen
ts. 119.67 97.44 80.72 48.9 35.06
Inventorie
s 149.89 144.98 169.88 115.24 65.84
Sundry
Debtors 10.91 11.3 8.2 7.28 5.3
Cash And
Bank 3.04 15.73 5.84 99.48 109.77

22
Loans And
Advances 222.58 203.71 176.31 124.45 74.5
Total Current
Assets 386.42 375.72 360.22 346.45 255.41

Current
Liabilities 269.66 264.72 205.57 133.09 78.62
Provisions 34.8 26.32 6.12 6.11 5.88
Total Current
Liabilities 304.46 291.04 211.69 139.2 84.51
NET
CURRENT
ASSETS 81.96 84.67 148.53 207.25 170.9

Misc.
Expenses 0 0 0 0 0
TOTAL
ASSETS
(A+B+C+D+
E) 500.3 440.85 469.63 408.31 328.49

Profit loss account

Mar'10 Mar'09 Mar'08 Mar'07 Mar'06


Income
Operating income 1,568.37 1,327.51 1,146.01 838.69 619.68
Expenses
Material consumed 894.82 811.99 696.86 510.82 376.36
Manufacturing expenses 104.16 14.91 12.49 10.85 6.96
Personnel expenses 87.59 87.11 78.14 58.37 39.91
Selling expenses 103.32 111.96 99.65 67.4 50.9
Administrative expenses 122.33 121.91 100.28 59.75 45.62
Expenses capitalized - - - - -
Cost of sales 1,312.22 1,147.87 987.42 707.18 519.73
Operating profit 256.15 179.64 158.59 131.51 99.95
Other recurring income 4.32 7.95 8.36 10.95 7.2
Adjusted PBDIT 260.47 187.59 166.94 142.46 107.14
Financial expenses 160.11 155.64 113.11 68.01 52.94
Depreciation 31.03 63.13 39.27 25.63 13.94
Other write offs - - - - -
Adjusted PBT 69.34 -31.18 14.56 48.82 40.27
Tax charges 21.13 5.89 6.28 22.52 13.14
Adjusted PAT 48.21 -37.07 8.28 26.3 27.13
Non recurring items 3.86 -26.65 -0.05 -0.11 -0.02
Other non cash adjustments -1.84 - -1.27 - -
Reported net profit 50.23 -63.72 6.97 26.2 27.11
Earnigs before appropriation 35.47 -14.76 55.42 55.88 36.92
Equity dividend 5.24 - 5.23 5.22 5.16
Preference dividend - - - - -

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Dividend tax 0.87 - 0.89 0.89 0.72
Retained earnings 29.36 -14.76 49.31 49.77 31.04

Ratios:

Mar '10 Mar'09 Mar'08 Mar'07 Mar'06


Per share ratios
Adjusted EPS (Rs) 13.81 -10.63 2.38 7.55 7.89
Adjusted cash EPS (Rs) 22.69 7.48 13.64 14.91 11.94
Reported EPS (Rs) 14.39 -18.28 2 7.52 7.88
Reported cash EPS (Rs) 23.27 -0.16 13.26 14.88 11.94
Dividend per share 1.5 - 1.5 1.5 1.5
Operating profit per share (Rs) 73.36 51.52 45.49 37.76 29.07
Book value (excl rev res) per share (Rs) 79.67 66.85 85.11 84.75 78.51
Book value (incl rev res) per share (Rs.) 79.67 66.85 85.11 84.75 78.51
Net operating income per share (Rs) 449.2 380.75 328.72 240.81 180.23
Free reserves per share (Rs) 69.62 56.56 74.83 74.49 68.28
Profitability ratios
Operating margin (%) 16.33 13.53 13.83 15.68 16.12
Gross profit margin (%) 14.35 8.77 10.41 12.62 13.88
Net profit margin (%) 3.19 -4.77 0.6 3.08 4.32
Adjusted cash margin (%) 5.03 1.95 4.11 6.11 6.55
Adjusted return on net worth (%) 17.32 -15.9 2.79 8.91 10.05
Reported return on net worth (%) 18.05 -27.33 2.34 8.87 10.04
Return on long term funds (%) 58.85 35.23 43.03 39.58 34.52
Leverage ratios
Long term debt / Equity 0.4 0.51 - - -
Total debt/equity 0.68 0.89 0.58 0.38 0.21
Owners fund as % of total source 59.23 52.87 63.17 72.28 82.17
Fixed assets turnover ratio 3.64 3.51 3.7 4.4 4.04
Liquidity ratios

Current ratio 1.27 1.29 1.70 2.49 3.02


Current ratio (inc. st loans) 0.83 0.86 0.73 0.94 1.28
Quick ratio 0.76 0.79 0.89 1.66 2.24
Inventory turnover ratio 10.46 9.16 6.75 7.28 9.41
Payout ratios
Dividend payout ratio (net profit) 12.15 - 87.79 23.33 21.69
Dividend payout ratio (cash profit) 7.51 - 13.22 11.79 14.32
Earning retention ratio 87.34 - 26.15 76.77 78.33
Cash earnings retention ratio 92.3 100 87.14 88.23 85.69
Coverage ratios
Adjusted cash flow time total debt 2.42 7.97 3.64 2.18 1.43
Financial charges coverage ratio 1.63 1.21 1.48 2.09 2.02
Fin. charges cov.ratio (post tax) 1.51 0.99 1.41 1.76 1.78

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Component ratios
Material cost component (% earnings) 57.36 59.29 65.59 66.8 62.5
Selling cost Component 6.58 8.43 8.69 8.03 8.21
Exports as percent of total sales 2.69 3.3 4.3 5.17 6.48
Import comp. in raw mat. consumed - - - - -
Long term assets / total Assets 0.5 0.46 0.45 0.35 0.36
Bonus component in equity capital (%) - - - - -

HUMAN RESOURCES:
The Indian retail industry is growing by leaps and bounds and is poised for an unprecedented
growth. Your Company is gearing up to the rice the growth wave and we believe that our people
will fuel this exponential growth in the future.

We continue to increasingly focus on internal growth and development of our associates, cutting
across levels and functions, through focused developmental efforts and growth opportunities. For
the year under review, we have provided 66 hours of training per associate and 320 hours of
international training. We have been able to employ innovative strategies to attract talent from
other industries as well as from renowned educational institutions. 104 associates have
participated in the Company's growth through ESOPs.

Your Company has a well-established system of competency mapping and assessment centre
deployment that ensures a fair and transparent vehicle for providing growth opportunities to its
associates. In the last financial year, 35 assessment centres were conducted covering 360
associates across various levels.

We have been able to successfully deploy initiatives to enhance associate satisfaction levels,
which are reflected in the increase in our Associate Satisfaction scores for the fourth consecutive
year in a row.

ASI or Associate Satisfaction Index computed through an annual online survey for all our
associates, tracks the satisfaction levels of associates on various work experience, identifies the
current drivers of employee loyalty, tracks improvement over last year and identifies the current
key strengths and weaknesses to take necessary action.

Overall Loyalty index is a tool to measure Employee Experiences, which impact employee
attitudes which in turn leads to employee loyalty resulting in business enhancing employee
behaviours.

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MARKETING:
Party On, our theme for the December promotion helped the brand create an exclusive position in
the market at a time when everyone else concentrates on Christmas and Santa Claus. The 'Party
On' promotion was created from a customer insight that most people associate the word 'party
time' very closely to the month of December. Creating a 'party spirit' at the store through live
bands, Disc Jockeys playing at the stores, bartending classes and Salsa dancing workshops leant a
very festive spirit at the stores.

Retaining the positioning of 'Shopping. And beyond', the brand campaign reinforced the fashion
leader imagery of the brand. However, this time the brand campaign focused on the insight that
'consumers don't just buy products, there are emotions attached to these'. The campaign explores
the feelings and creates a stronger emotional connect with the consumer.

Further, we also had local festivals across regions. Some major local festivals that we conducted
were the 'Shoppers' Stop Sananda Pujor Bazar' -festival in Kolkata during the Durga Puja season,
Akshay Trithiya and Onam in South and Sankranthi and Dhanteras in North.

ACHIEVEMENTS
• The only Indian member of the Intercontinental Group of Departmental Stores (IGDS)

• In Sept’ 06 shoppers stop rewarded by “Retailer of the year” at Images India Retail Forum. In
addition, hey had been awarded by “Amity Corporate Excellence Award” By Amity
International Business School had rewarded them. “IT user award for best IT practices in
Retail Category" for 2003-2004.

• In 2007 they have been rewarded by Retail Destination Of the year.

1. 2008 Departmental Store of the year.


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• Most Successful Supply Chain Management (Aug’ 04)

• “Most Admired Shopping Destination of the Year” award by Images Fashion Forum, 09
in January, 2008 and in 2009

• 'Most Admired Retailer of the Year' for technology applications at Image Retail Award, 2007

• In 2010 Shopper’s Stop was declared as the winner for customer & brand
loyalty in the Retail Sector.

FUTURE
• Growing use of credit cards, increasing working women, young working population, urban
population, brand consciousness

• Retail industry expected to rise 25% yearly.

• Retailing industry in India will amount to US$ 21.5 billion by 2010 from the current size of
US$ 7.5 billion

• Planning to have at least 48 stores by 2011-12 and the present 1.5 million sq ft area of
operation will touch 3.5 million sq ft.

• Get into new Tier-II cities like Ahmedabad, Jalandhar, Ludhiana, Amritsar, Vijayawada and
Mangalore.

CONCLUSION
• Non apparel contribution increasing.

• Different marketing strategies.

• Strong distribution and logistics network and supply chain

• Losses due to aggressive growth plan, change in technology, logistics and distribution system
and entering into new ventures such as Shoppers’ Stop .Com (India) Ltd and Shoppers’ Stop
Services (India) Ltd and acquisition of Crossword.

• Two of the Southern Entities, Asiatic Properties Ltd and Raj Trust have defaulted on loan
repayments and interest payments

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• FCC Members accounted for about half of our gross retail sales (for the year ended on March
31, 2004). Shift

• in the preferences or loyalty of this customer base or any change in their spending pattern
may impact our performance

BIBILOGRAPHY

1. SHOPPER’S STOP ANNUAL REPORT.

2. www.corporate.shoppersstop.com

3. http://www.moneycontrol.com/india/stockpricequote/retail/shoppers-stop/SS51

4. www.rediff.com

5. http://iyerarchi.blogspot.com/2008/04/shoppers-stop-analysis.html

6. http://www.afaqs.com/perl/news/index.html?sid=20981

7. http://www.indiaretailbiz.com/blog/2008/04/24/shoppers-stop-undertakes-image-makeover-
revamps-looks-logo-uniforms-among-others/

8. http://www.indiaretailbiz.com/blog/2008/04/26/shoppers-stop-turns-corner-posts-excellent-
performance-announces-expansion-plans/

9. http://www1.timesofindia.indiatimes.com/articleshow/2793347.cms

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