Shoppers Stop posts net loss of Rs 22 cr in Q2 owing to lower sales

Retail chain Shoppers Stop on Thursday reported a standalone net loss of Rs 22 crore for the second quarter ended September 30 on account of lower sales and exceptional loss.

The company had posted a net profit of Rs 10.68 crore in July-September quarter a year ago.

Total income stood at Rs 843.65 crore during the quarter under review, down 12.30 per cent as against Rs 962.01 crore in the year-ago period, Shoppers Stop said in a BSE filing.

"Second quarter was relatively subdued owning to stock and supply challenges on account of GST implementation. However, teething issues have been resolved and we are well on track for a strong festive quarter," Shoppers Stop Customer Care Associate and Managing Director Govind Shrikhande said.

Total expenses were down 12.79 per cent to Rs 824.15 crore as against Rs 945.03 crore earlier.

The company also reported an exceptional loss of Rs 33.78 crore due to impairment in value of investments in its subsidiary HyperCity Retail.

Last month, Shoppers Stop announced the sale of loss-making HyperCity to Future Retail for Rs 655 crore. The HyperCity, majority owned by Shoppers Stop, operates 19 large format premium stores in some key cities.

During the quarter, Shoppers Stop's board approved the issuance of 43.95 lakh equity shares of Rs 5 each at price of Rs 407.78 per piece to Amazon.com NV Investment Holdings LLC for Rs 179.25 crore on preferential basis.

Shoppers Stop also disposed its 40 per cent stake in the joint venture with Swiss major Nuance Group and exited from duty-free airport stores.

"Our partnership with Amazon India...will be a significant boost to our existing online play. Our exit from Nuance Group and HyperCity will further sharpen our focus on core departmental store business," Shrikhande said.

In a separate filing, the company said its independent director Gareth Thomas has resigned with effect from October 26.

Shares of Shoppers Stop settled 1.63 per cent lower at Rs 517.95 on BSE.