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Raheja group may exit Crossword

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Eleven years after buying Crossword Bookstores, the — the promoter of — is reviewing the future of the book retailing chain.

According to three people in the know, it is exploring various options, including alliances and joint ventures, and may even exit the business altogether. The group is being advised by investment bank Avendus.

Formerly a division, is now a wholly-owned subsidiary of Shoppers Stop, India’s leading department store chain. The holding company also acts as the master franchisee.

What started in Mumbai in 1992 as a chain of stores by serial entrepreneurs and – whose focus was to encourage readers to drop by, browse and buy books – has now grown far bigger.

1992: R Sriram and K Anita launch a bookstore chain in Mumbai after stints in Landmark (1988) & launching Walden in Hyderabad (1990)
* India Book House becomes initial investor
2000: Srirams arrange buyout of Crossword by Shoppers Stop for Rs 25 crore, continue as CEO & MD 
* ICICI Ventures picks up 49% in Crossword
2005: Shoppers completes Crossword acquisition, buys out ICICI Ventures
2006: Sriram steps down, floats consulting company 
2010: From a division, Crossword Bookstores becomes a wholly-owned subsidiary of Shoppers Stop
2011: Avendus appointed to explore sale, alliance options

It is today one of the country’s few profitable book and music chains. It has 72 stores, both company-owned and franchisees, most of these in west and south India.

Crossword, according to sources, clocked Rs 150 crore revenue in 2010-11 and earnings before interest depreciation, tax and amortisation of Rs 5 crore in a landscape where online players such as Amazon and Kindle are as much a threat as other brick-and-mortar chains such as the Tatas’ Landmark and the Deccan Chronicle Group’s Odyssey.

Shoppers Stop did not respond to Business Standard’s queries. B S Nagesh, vice-chairman and non-executive director, did not want to comment on operational issues as he was no longer manning the company’s day-to-day business. Mails to the company’s spokesperson did not get any response. The company’s managing director, Govind Shrikhande, and chief financial officer, C B Navalkar, were travelling overseas and could not be contacted despite several attempts.

Industry watchers and informed sources said most big retailers and peers would be keen to examine any opportunity to buy Crossword.

While the Tatas are the only mutli-brand big retailer with standalone bookstores, companies such as Reliance Retail, Future Group, Aditya Birla Retail and RPG’s Spencer could be potential suitors. Sources said Crossword promoters expected one-two time sales as a fair valuation but added that any deal might be some time away.

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