Shoppers Stop reported consolidated net loss of Rs 97.70 crore in Q2 September 2020, higher than net loss of Rs 8.18 crore in Q2 September 2019.
Consolidated net sales slumped 65.7% to Rs 296.98 crore in Q2 FY21 as against Rs 866.48 crore in Q2 FY20. Pre-tax loss stood at Rs 131.89 crore in Q2 FY21 compared with pre-tax loss of Rs 17.29 crore in Q2 FY20. The Q2 earnings were announced after trading hours on Friday, 16 October 2020.
Shoppers Stop reported a sales of Rs 371.20 crore and an EBITDA loss of Rs 83.30 crore in the quarter (Non-GAAP). With GAAP (Generally Accepted Accounting Principles) adjusted, the turnover stands at Rs 292.40 crore and EBITDA (before exceptional item) at Rs 28.40 crore. The company said that its Q2 performance has been impacted by intermittent lockdowns, Maharashtra was closed until second week of August 2020 and the number of operating days were 20% lower than last year. The store timings were restricted. Customers continue to be cautious in visiting stores. A combination of these factors impacted the normal business and consequently financial performance.
North and East have been performing better than West and South. West being most impacted, primarily due to extended lockdown until mid-August 2020. The Tier II and Tier III towns continue to outperform the metro cities. Despite these operational constraints during the quarter, Shoppers Stop observed that its customer visits were mission based resulting in significantly higher conversion and ATV (Average Transaction Value). The shopping mall's footfall had increased sequentially in 3 months.
Commenting on the Q2 FY21 outcome of the company, B S Nagesh, the customer care associate, non-executive chairman of Shoppers Stop, has said that: "Within the operative constraints, our company has performed better than expectations in all KPI's. Overall, easing of lockdown and festive season ahead, we expect better footfall, sales and performance in Q3. The silver line in these dark clouds is our progress in e-commerce. Our journey for a complete digital transformation and strengthening our omni business continues."
"During the quarter, we made substantial progress such as, improved user interface on our App and Website, page download optimization, advanced analytics to generate demand and to achieve personalization and delivery turnaround time optimization. We reached out to customers in various innovative ways and improved customer's online interactions with our Personal Shoppers. This resulted in additional 22,000 First Citizens shopping online. Our e-commerce sales grew by 50% year or year, contributing to 7.8% of the total revenue. We continue our journey to make Shoppers Stop a truly omni channel organization."
"Our engagement with First Citizens continues with number of new initiatives. First Citizen trust on Shoppers Stop remains encouraging with a healthy sales mix of 83% (+600 bps vs LY). Private brands mix to overall shares increased to 15.5% in Q2 (370 bs vs LY), with increased product offerings such as Sleepwear, Loungewear and Innerwear besides sharpening our product price- points," he added.
Shoppers Stop has made considerable savings of Rs 314 crore over the last year in the first two quarters through number of initiatives. This is despite opening 11 new stores in FY20. The company focussed on conserving cash, maintaining short-term liquidity and strengthening the balance sheet given the unprecedented times continue. The firm's cash and bank deposits are at Rs 87 crore as of 30 September 2020, to deal with exigencies in the coming quarters. With continued lockdown, intermittent store closures, and a subdued retail landscape, the sales and margins are strictly not comparable with Q2 FY20.
Meanwhile, the company's board approved the appointment of Venugopal G Nair as an additional director of the company. He has also been appointed as a managing director, designated as managing director & chief executive officer of the company for a period of three years effective 6 November 2020, subject to approval of shareholders of the company.
The board also approved raising up to Rs 300 crore through rights issue of equity shares. The board has constituted the right issue committee of board of directors and authorized it to proceed with rights issue forthwith, and decide the other terms and conditions of the rights issue, as may be required, from time to time.
Shares of Shoppers Stop rose 1.44% to Rs 175.60 on BSE. Shoppers Stop is the nation's leading premier retailer of fashion and beauty brands established in 1991. Spread across 89 department stores in 44 Cities, the company also operates premium home concept stores (11 Stores), 132 Specialty Beauty stores of M.A.C, Est Lauder, Bobbi Brown, Clinique, Smash box, Jo Malone and Arcelia, occupying an area of 4.5 million sq. ft.
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