SHOPPERS STOP

SHOPPERS STOP Started in Andheri, Mumbai in 1991 by the K. Raheja Corp. group of companies Awarded "the Hall of Fame" and won "the Emerging Market Retailer of the Year Award", by World Retail Congress at Barcelona, on April 10, 2008 27 stores in 12 cities in India Operate a number of speciality stores, namely Crossword Bookstores, Mothercare, Brio, Desi Caf, Arcelia

Time Line

Courtesy: http://corporate.shoppersstop.com

Price & Product Mix

Categories, Brands and Price Ranges of Mens Apparels and Accessories

Type

CategoryShirts

Sub CategoryFormal Shirts Semi-Formal Party Wear Casual Wear Formal Semi-Formal Casual Trousers

Trousers

Men's Apparel

Jeans T-shirts and Polos Kurtas, Pajamas and Stoles Ties Vest Innerwear Briefs Shorts Wallets Belts Watches Sunglasses Pens Cufflinks Handkerchief and Socks

Men's Accessories

Category

Sub Category

Formal Shirts

Shirts

Semi-Formal

Party Wear

Casual Wear

Brands Austin Reed Acropolis Louis Phillipe Park Avenue Stop Van Huesen Vettorio Frattini Wills Lifestyle Zodiac Allen Solly Indian Terrain Stop Vettorio Frattini Mario Zegnotti Wills Lifestyle ZOD! I Jeanswear Lee Spykar Pepe Wrangler LIFE

Price range 1399 - 1899 499 - 699 1199 - 2199 1299 - 1499 599 - 1099 1399 - 1499 899 - 1599 999 - 1299 1399 - 1799 1199 - 1499 899 - 1299 899 899 - 1499 699 - 1199 899 - 1299 1395 - 1795 399 - 899 1299 - 1399 1299 - 1699 1195 - 1495 766 - 1295 399 - 1099

Category

Sub Category

Brands

Price range

Blackberry'sLouis Phillipe

595 - 14951499 - 1599 1399 999 - 1099

Formal

Park Avenue Van Huesen Vettorio Frattini Wills Lifestyle

1599 1399 1195 899 - 1299

Trousers

Allen Solly Blackberry's

Semi-Formal

Indian Terrain

Mario ZegnottiStop Vettorio Frattini

1699699 - 1199

Casual Trousers

Spykar

1595

Category

Sub Category

BrandsI Jeanswear Lee LIFE Pepe Spykar Wrangler I Jeanswear Lee LIFE

Price range499 - 1399 1099 - 1999 499 1299 - 1899 1199 - 2599 1395 - 2195 399 - 599 699 - 799 499 - 699 299 - 899 599 - 1199 799 - 999 299 - 899 479 399 - 795 4995 - 7995 699 - 1299 999

Jeans

T-shirts and Polos

Mario Zegnotti Pepe Spykar Stop Vettorio Frattini Wrangler

Kurtas, Pajamas and StolesTiesVest Innerwear Briefs Shorts

Manyavaar Kashish Zodiac Jockey Tommy Hilfiger Jockey Tommy Hilfiger LIFE

999 - 1099

CategoryArrow Austin Reed

BrandsFossil Hidesign Kaos Nova Tommy Hilfiger Arrow Austin Reed Fossil Kaos Lorad Van Huesen CASIO CITIZEN FASTRACK FOSSIL GIORDANO HUGO BOSS KENNETH COLE NAUTICA PIERRE CARDIN TIMEX TITAN TOMMY HILFIGER XYLYS FASTRACK LIFE POLAROID PUSH AND SHOVE RAY BAN Cross Shaeffer Infinity

Price range899 - 1299 599 - 1049

Wallets

Belts

Watches

Sunglasses

PensCufflinks Handkerchief and Socks

1495 - 1795 545 - 1045 599 - 699 399 - 850 1395 - 1900 999 - 1199 599 - 999 1495 - 1795 699 - 1199 425 - 680 899 - 1199 1795 - 8995 4890 - 19250 795 - 3795 5295 - 13495 3450 - 11950 9995 - 13995 5595 - 14995 15995 5450 - 12950 1695 - 4995 2495 - 10000 6995 - 11495 12000 - 20000 995 - 2195 895 - 1095 2472 - 3100 1350 - 2100 3890 -7390 2395 - 7995 995 - 3000 1150 -1500

100 -250

Category

Sub Category

Brands Franco Leone

Price range 1795 - 2495 1895 - 2195 1985 - 2285 2195 - 2595 1885 - 2485 2185 - 2385 2395

Formal Footwear

Jean Lauren Lee Cooper Red Tape ID

Casual

Lee Cooper Red Tape

Price & Product MixCategories, Brands and Price Ranges of Womens Apparels and Accessories

Type

Category

Sub Category

Formal Shirts

Shirts

Casual

Formal trousers Casual Bottomwear

Bottomwear

Jeans Sarees Kurtas Churidars, Salwars and Dupatta Salwar and Churidar Suits

Women's Apparel Mix and Match

Ready to StitchSkirts Dresses T-shirts and Knits Bra Briefs

LingerieMaternity Lingerie Nightwear

Sub Category

Formal Shirts

Casual

Formal trousers Casual Bottomwear

JeansSarees

Brands Austin Reed Elliza Donatein Van Huesen Wills Lifestyle Stop Blackberry's I Jeanswear insense Lee LIFE Noi Pepe Remanika Wills Lifestyle Eliza Wills Expozay Insense I Jeanswear Kraus Life Lee Pepe Kasish

Price range 1399 - 1899 499 - 699 1199 - 2199 1299 - 1499 599 - 1099 1399 - 1499 899 - 1599 999 - 1299 1399 - 1799 1199 - 1499 1199 - 2199 999- 2299 999 - 1299 1299 - 1499 499 - 1799 499 - 1599

399 - 17992499 - 4599

Kurtas Churidars, Salwars and Dupatta

Salwar and Churidar Suits Ready to Stitch Skirts

Stop Workwear Haute Curry Ladies Patiala Stop Classics Biba Churidar Stop Naturals Kashish Churidar DIY Remanika Austin Reed Stop Crinkle Remanika insense Life for Women Remanika Wills Tangle Zoozoo Austin Reed insense Amante bwitch Enamor Lovable Amante bwitch Enamor Lovable Sweetdreams Pretty Secrets Austin Reed Espirit Lee Remanika

629 - 1299 199 - 499

799- 4995 2399 - 2999 599 - 2000

Dresses

499 - 1800

T-shirts and Knits

249- 1899

Bra

110 - 1599

Briefs Maternity Lingerie Nightwear

70 -699 495 - 1899 699 - 2499

Seasonal

895 - 2500

Type

Category Handbags

Sub Category Handbags Rings

Fine Jewellary

Earrings Pendants Nose Pin Sets Earrings Chains & Necklaces

Women's Accessories Fashion Jewellary

Bracelets & BanglesWatches Sunglasses Pen Wallets Socks Womens' Footwear

Sandals and SliponsEvening Wear

Sub Category

Brands Hidesign Elizza Donatein

Price range 1645 - 4545 999 - 1299 839 - 1399 1295 - 2295 1750 - 3650 5225 - 9950 6915 - 11748 8600 - 9550 3250 - 9425 1555- 4890 1283 - 4598 740 - 6765 890 - 4970 370 - 2240 1950 - 2500 95 - 595 3500 - 9000 490 - 3990 565 - 1275 2450 - 6750

Handbags

Haute Curry Holi Rocky S Gili Sparkles Gili Gili Sparkles Sparkles Estelle Zaveri Pearls Estelle

Rings Earrings Pendants Nose Pin Sets

Earrings

Infinity Zaveri Pearls Infinity Zaveri Pearls Estelle Infinity

Chains & Necklaces Bracelets & Bangles

Casio Citizen Fastrack Fossil Giordano

12995 6490 - 18550 695 - 2195 4495 - 7995 3750 - 8950 5495 - 12995 5950 - 9950 1595 - 5495

Watches

Kenneth Cole Pierre Cardin Timex

TitanTommy Hilfiger Xylys Fastrack Life

2750 - 100003995 - 7495 12000 - 20000 695 - 2495 895 - 1095 2472 - 3102 1350 - 2150 3890 - 6290 1160 - 7995 995 - 4250 395 - 795

Sunglasses

Polaroid Push and Shove Ray Ban

PenWallets Socks Sandals and Slipons Evening Wear

Cross Sheaffer HoLII

Van HeusenCatwalk

79- 89750 - 1295 750 - 1295

Price & Product Mix

KIDS ZONE

Type

CategoryToys

Sub CategorySoft Toys Dolls Activity and Games Maternity Baby Boyswear Girlswear Travel Feeding Toiletries Toys & Gifts Bath time Nursery Footwear Home Safety Topwear Skirts & Dresses Bottomwear Ethnic Topwear

BrandsPlay N pets Barbie Kelly

Price range199 - 3999 495 - 2995 299 - 1199 499 - 1299 599 - 1299 345 - 15295 295 - 7495 95 - 1295 125 - 4595 195 - 2995 225 - 20695 299 - 1099 345 - 1345 349 - 1199 599 - 1299 399 - 1299 899 - 1299 249 - 1199 149 - 1199

Mothercare

Mothercare

Kid's ZoneGirls

Stop Girl Mothercare Gini & Jony Stop Canvass Stopboy

Boys Bottomwear Boys' Watches Girls' Gini & Jony Boys' Girls' Gini & Jony Zoop Mothercare Gini & Jony

350 - 900

299 - 1199 349 - 1299

PRIVATE LABELS

Private Labels Currently 10 private labels as compared to 4 in 2002. Was introduced to provide exclusivity in addition to filling in the gaps in categories where no other brand is present. Plans to increase the advertising spend on private labels to position them as brands. Their aim is to ensure that private labels contribute to at least 25% of the total sales

Private Labels Major Private Labels: Kashish - Mens's Ethnic Wear Stop - Western Wear - Men & Women Life - Mens Casual Wear , Jeans Wear Mario Zegnoti - Men's Formal Wear Acropolis - Men's Formal Wear Push and Shove Mens Eye Wear Vettorio Fratini - Premium Men's Wear

Private Labels Private labels account for about Rs 200 crore in revenues. Sales grew by 17% for Private Labels Contribution of private labels has decreased to 19.9% of sales from 21.1% last year Margin for private labels is 15%-20% for FMCG and 30% for Consumer durables.

Investments in various verticals

Various Businesses by K Raheja Group Start something new Crossword Bookstore HomeStop (Furnishings) Brio Franchised Coffee bars Desi Caf HyperCity MAC (Cosmetics) Mother Care Time Zone

True to its mottoLatest Addition to the Line: German brand Mustangs foray into Indian Markets Shop-in-shop @ Shoppers Stop Airport Retail: Started at Bengaluru, Mumbai and Hyderabad. Shut down at Mumbai due to Swine Flu, Low passenger Traffic.

Online Store of Shoppers Stop

Zoozoo Collection

Single Gift Voucher redeemable at Crossword, Shoppers stop, HomeStop, Mother care etc. Customization + Gifting Surprizes

Keeping track of what people buy? ERP Implementations deployed applications for Customer Loyalty Management CRM for First Citizens Club (1 mill customers) Data Mining and Business Intelligence helps customize the promotions for Loyal customers Wi-Fi, Advanced Payment systems server virtualization, B2B portal, RFID for monitoring movement

First Citizen and Project Drishti "First Citizen" reflects commitment to offering the ultimate shopping experience Reward Points every time at Shoppers Stop. Exclusive benefits & privileges Updates on what to look forward to shop for

Project Drishti: Data Warehousing and Mining Launched in 2008, enabled micro segmentation Enabled micro-segmentation across all formats

Lowest shrinkage in Business 0.4% shrinkage levels for the last 4 years The reason they say is the investments in Technology. Approach to IT- Nothing but the Best HyperCity runs on E3 technology The most advanced replenishment technology. The logic developed in-house from pattern study. Business Intelligence @ Shoppers Stop

Growth Strategy

Growth Strategies Corporate growth strategies are incorporate a combination of: M&A Organic growth Restructuring Corporations strategic plans are dominated by events or milestones. E.g. revenue/profit targets, IPO and entry into certain markets. Corporations should not lose sight of longer-term changes in the market, competition, and technological and regulatory environment. Strategic mistakes are often made when things appear all rosy.

Elements of Growth Strategy1. Customer Focused Right product, packaged in the right solution with well thought out support systems that the right target market really needs and wants

2. The Company is Oriented to Performance Incentives are aligned to self-responsibility, authority, accountability and ability to take risks

3. Youve Removed the Rub Points Smooth communication flow from what is promised to the customer all the way from sales through order processing, production, billing, delivery and after sales support

Elements of Growth Strategy4. Your People Understand how the Company Makes Money Everyone should know how their expertise and efforts contribute to the bottom line and where they fit in the financial equation.

5. You Focus on and Make Decisions Based on the Right Key Performance Indicators Your indicators should show you where you have cash leaks in the system, before you have to start bailing

Growth Strategy of Shoppers Stop Believe in Organic growth Ramp up to 49 stores spread across 3.6 million square feet. In addition to Tier-1 and Tier-2 cities where the company has a presence, they have also identified 23-24 cities for expansion. The total number of First Citizen members has crossed the 1 million mark.

Growth Strategy of Shoppers Stop Extensive use of IT to streamline various processes and focus on systems. Strong understanding of the real estate business Enhancing our human capital

Factors inhibiting growth Execution Risk Employee Retention: Poaching between retailers. Delay in store delivery: Any delays in the construction of the malls will delay the companys retail expansion plan. High retail lease: Boom in real estate prices led to an increase in retail rentals. Store renovations: Affect cash flows and also have a gestation period before they can ramp up to original levels.

Profitability Analysis

Year 2008-09 Apparel contribution reduced from 61% (2008) to 59% (2009) Increase in private label sales by 17% Gateway Multichannel Retail (India) Limited, a

subsidiary closed down operations

Sales growth, Mar-08, Sales growth, Mar-06, Sales growth, Mar-07, 34.20% 33.20% 32.70% Sales growth, Mar-05, 27.30%

Sales growth

15.60%

Falling footfalls and poor conversion ratio Organised retail sector: 11% sales decline

Performance(All amounts in Rs. million) Retail turnover (Sales) Total expenditure (LOSS)/PBT (LOSS)/PAT Mar-09 12,709.41 13,104.34 -643.57 -637.18 Mar-08 10,993.68 10,848.51 145.17 69.67 Change % change

15.6% 20.8%

Expenses as a percentage of sales COGS

Mar-09 63.5%

Mar-08 63.0%

Change

Employee costOperating and administrative expenses Interest and finance charges Depreciation and Amortisation

6.9%25.8% 2.0% 5.0%

7.1%24.0% 1.0% 3.6%

Operating profit Margi

Like to Like sales growth reduced New Store launches Decrease in Gross margins

Profitability trendGross profit margin, Mar-05, 29.30% Gross profit margin, Mar-08, 32.00% Gross profit margin, Mar-09, 31.70%

Gross profit margin Operating marginOperating margin, Mar-05, 6.70%

PBT margin PAT margin

PAT margin, Mar-05, 3.80%

Operating margin, Mar-09, 1.80%

PAT margin, Mar-09, 4.60%

High borrowing costs Reflected in low debt-equity ratio

EffectROI & ROCEROI, 2004-05, 22.00%

ROIROI, 2006-07, 9.30%

ROCE

ROCE, 2004-05, 14.20%

ROCE, 2006-07, 6.20%

ROCE, 2008-09, -11.10%

ROI, 2008-09, -24.10%

The Way Ahead Plans to open 3 new stores before March 2010 Targeting doubling the store count in next three years.

Plan to Raise funds by allotting 40 lakh shares to institutional buyers & 4 million convertible warrants to promoters. Plans to open stores in five smaller cities like Amritsar, Mangalore and Vijaywada.

Collaboration with German jeanswear and lifestyle brand MUSTANG which will operate shop-in-shops within Shoppers Stop. Plans to increase 19% stake in Hypercity to 51% by June 2010

Recommendations To go for Low cost funds Cut down Operating expenses Focus on Private labels

References www.shoppersstop.com http://corporate.shoppersstop.com en.wikipedia.org/wiki/Shoppers'_Stop www.moneycontrol.com/.../shoppers-stop-toraise-funds_425018.html