Shoppers stop - Retail trouble

Shoppers Stop reported net sales of Rs. 289.19 crore for Q1 FY09 against Rs. 225 crore in Q1 FY08, an increase of 28.5%. Gross profit rose by only 26.3% to Rs. 104.37 crore for 1Q FY09 as compared to Rs. 82.59 crore in 1Q FY08 on account of decline in share of private labels (20.4% against 20.9%). The company reported operating loss of Rs. 0.59 crore for the Q1 FY09 as against operating profit of Rs. 13.55 crore for Q1 FY08 on account of increase in expenditure (37% growth) primarily attributable to service tax paid (Rs. 4 crore), expenses incurred on re-branding (Rs. 7 crore) and higher overheads of new stores.

New store takes 5-6 quarters to break even; space estimated to increase 51% in FY09e and 37% in FY10e, which will likely pressure the bottom line. Store rollout target for FY11e revised from 4.6m to 3.8m on the back of slowdown in mall developers industry.

HSBC is undderweight on Shoppers Stop as the company is expected to be in RED for FY09 expecting a loss of Rs 1.24.


  1. Hi Mr Rajish:

    I admire your country and have great hope for it. Fortunately it is being led by many valuable people and best of all it is a democracy. I'm sure the fundamentals are much better placed than those of China (notwithstanding its present success). Congratulations for your "blog" which carefully examines the Indian economic intricacies and efforts at trying to understand the markets (all of us are) and thanks for your kind words dropped by when you visited mine last week (Do you remember?) (

    keep in touch. I will!

    Juan Carlos Nava Nava

  2. Correction:

    I shoud have written Mr Rajesh and not Mr Rajish.


    Juan Carlos Nava