Annual Report 2016-17
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2016-17 ANNUAL REPORT Contents Corporate Overview 1-28 2 Introducing Shoppers Stop Ltd. 5 Geographical Presence 6 Shoppers Stop 8 Chairman's Statement 10 Managing Director's Message 12 Brand Transformation 14 Talent Transformation 16 Tech Transformation 18 Supply Chain Transformation 20 Board of Directors 22 Marketing & Communication Initiatives 24 People Initiatives 26 Corporate Social Responsibility 27 Corporate Information 28 Financial Highlights & Key Ratios Statutory Reports 30-96 30 Management Discussion & Analysis 42 Director's Report 72 Business Responsibility Report 81 Corporate Governance Report Financial Statements 98-212 98 Standalone Financial Statements 151 Consolidated Financial Statements Cautionary Statement The statements made in this report describe the Company’s objectives, projections, expectations and estimations which may be ’forward looking statements’ within the meaning of applicable securities laws and regulations. The annual results can differ materially from those expressed or implied, depending on the economic and climatic conditions, Government policies and other incidental factors which are beyond the control of the Company. TRANSFORMATION After 25 years of stupendous growth, we are accelerating our transformation like never before. We have strengthened our brand identity by bolstering our distinctive brand experience, developing world-class private brands, partnering with new global fashion brands, launching a fresh brand campaign, and creating multiple experiential events. We have expanded our talent to catalyze our transformation story. We continue to invest in our people and develop their skills in order to create a future-ready workforce. We have actively embraced and leveraged smart technologies to help us tread new frontiers in online retail, customer relationship management, and smart warehouse management systems. We have enhanced our supply chain in keeping with global benchmarks to ensure our operations always remain agile. This Annual Report encapsulates our journey of transformation and the measures we have undertaken across the facets of brand, talent, technology and supply chain to create an unparalleled shopping experience. Introducing Shoppers Stop Ltd. Shoppers Stop Ltd. is a professionally managed and systems driven organization promoted by the K Raheja Corp Group (Chandru L Raheja Group). stablished in 1991, Shoppers Stop Ltd. was instrumental in Esparking the retail revolution in the country. As pioneers of modern retail in India, the Company has introduced multiple retail formats that have been hugely successful. From national to international fashion brands, home décor to childcare, books to groceries, Shoppers Stop Ltd. is phenomenally well- differentiated and has grown to be an intrinsic part of every household in India. Shoppers Stop In FY 17 Shoppers Stop Shoppers Stop is India’s foremost fashion retailer offering leading international LAUNCHED and national brands across apparel, accessories, fragrances, cosmetics, 7 NEW STORES home décor and footwear. The retail store offers more than 400 of the finest brands taking the store count to 80 across 38 cities in India. such as CK Jeans, Tommy Hilfiger, Gas, United Colors of Benetton, French Connection, Vero Moda, Jack & Jones, Guess, etc. as well as popular 4.7 MILLION private brands Kashish, Stop, LOYAL CUSTOMERS Haute Curry, Life, and Vettorio Fratini. 2 CORPORATE OVERVIEW SHOPPERS STOP | Annual Report 2016-17 HomeStop HyperCITY HomeStop is a premium HyperCITY continues to home concept store that redefine the hypermarket offers an enormous variety of ‘EWORDS’ shopping experience for products across all categories customers across the nation. in the home segment A MONTHLY Last year, HyperCITY added including home adornments, 3 new stores taking its store bed and bath, kitchen NEWSLETTER count to 19. It has 1.3 million appliances and accessories, loyal members. home storage, and much more aimed at transforming with reviews of new books, Crossword homes. As of FY17, bestseller lists, information Crossword, with its wide HomeStop has 16 stores about in-store events portfolio of books, movies, across 11 cities in India. music, toys and stationery, and much more is sent is the definitive place and Online to registered members of space for those who seek www.shoppersstop.com has Crossword every month. information, knowledge or had an exponential growth just the pleasure of reading. trajectory with more than It has 88 stores across the 50% growth in Q4FY17. The country and over 6.5 lakh shopping website has more loyal customers. than 50,000 products across different categories and Joint Ventures sub-categories to choose Airport Retailing: In from and offers the benefit of association with The Nuance seamless transactions. Group AG, Switzerland, Shopper Stop operates a duty Beauty Formats free store at the International Shoppers Stop has been airport in Bengaluru. instrumental in bringing the world’s foremost beauty, TimeZone Entertainment: skincare and cosmetic Shoppers Stop Ltd. has brands to India including 48.42% stake in TimeZone Estée Lauder, M.A.C, Bobbi Entertainment Private Brown and Clinique, amongst Limited and currently has 25 many others. operational doors. ESTÉE M.A.C HAS GROWN TO CLINIQUE ADDED LAUDER HAS 40 STORES 2 NEW 7 STORES WITH 4 NEW STORES LAUNCHED IN FY17. STORES ACROSS IN FY17 AND NOW BENGALURU, BOBBI BROWN HAS HAS A TOTAL OF MUMBAI, CHENNAI, DELHI, 7 STORES KOLKATA AND ACROSS DELHI, 27 IN GURGAON, NOIDA, GURGAON. MUMBAI AND PUNE. INDIA. 3 4 CORPORATE OVERVIEW SHOPPERS STOP | Annual Report 2016-17 Geographical Presence Amritsar Jalandhar Ludhiana Gurgaon Chandigarh Delhi Ghaziabad Meerut Noida Faridabad Agra Jaipur Udaipur Lucknow Siliguri Kohima Gandhinagar Durgapur Ahmedabad Bhopal Ranchi Gandhidham Anand Bilaspur Vadodara Indore Raipur Kolkata Surat Nashik Aurangabad Bhubaneswar Mumbai Latur Pune Visakhapatnam Hyderabad Vijayawada Kolhapur Goa Chennai Mangalore Bangalore Mysore Calicut Coimbatore Kochi Shoppers Stop Hypercity Kottayam DC locations Specialty* Trivandrum * (includes Crossword, Mothercare, HomeStop, M.A.C, Clinique, Bobbi Brown and Estée Lauder outlets) Graphical Representation not to scale 5 Shoppers Stop The company’s flagship business of department stores has become one of India’s leading and most respected fashion retailers. e studied vision statements of the top W companies in the world and felt the need to carve out a new vision statement that clearly explains our focus, our strategy and impact measurement. VISION STATEMENT “To be an inspirational and trusted brand, transforming customers’ lives through fashion and a delightful shopping experience every time.” Our vision impacts all our key For Partners stakeholders and has a Shoppers Stop will be a distinct connotation for each. great partner to work with: transparent, responsive and For Customer Care committed to growth. Associates A great place to work where For Shareholders associates feel respected and Shoppers Stop will be inspired to contribute their a shareholders’ delight, best. delivering consistent value. For Customers For Society Shoppers Stop aspires to Shoppers Stop will be be the customer’s favourite respected for being highly shopping destination. A brand ethical, innovative and the customer can trust. responsible. 6 CORPORATE OVERVIEW SHOPPERS STOP | Annual Report 2016-17 VALUES 1. Excellence I.G.D.S We will have an environment that encourages development and excellence Shoppers Stop is the only Indian member of the coveted 2. Openness The obligation to dissent ‘Intercontinental Group of Department and an environment conducive Stores’ which has many of the world’s to openness biggest departmental stores among 3. Care its members. We will have a willingness to apologize and forgive 4. Integrity We will be fair and not take what is not ours 5. Innovative We will have an environment of innovation and growth 6. Socially responsible We will respect our customers’ rights and be socially responsible MISSION 2020 • Invest in Omni-channel to achieve 10% share of sales in 3 years • Increase share of private and exclusive brands • Deliver higher profitability and free cash flow • Leverage Loyalty Program and Social media 7 Chairman’s Statement 8 CORPORATE OVERVIEW SHOPPERS STOP | Annual Report 2016-17 INDIAN ECONOMY in Omni-channel, digitization of stores and our e-commerce push 4.7 million he last year witnessed starting to bear fruit in the coming First Citizen Loyalty Program two important policy years. members developments in India, Two years ago, your Company the passage of the GST T had launched a project named bill in the Parliament in order ‘Mission 2020’ with an objective to bring in more transparency to create the next generation in the tax administration and Shoppers Stop that can 75% withdrawal of legal tender of high successfully navigate across Contribution to Company’s value currency notes (` 500 and Channels and establish us as sales ` 1,000) i.e. demonetisation, with our customers’ most preferred an intention to curb black money brand & retail destination and to and running of a parallel economy make Private Brands visible like & the introduction of new ` 500 a total First Citizen base of over ‘National/International Brands’. and ` 2,000 currency notes. With 4.7 million members and today Your Company under this project a moderate start in 2016, the it is one of the largest loyalty is reviewing the brands within economic momentum recovered programs across sectors and the stores from the lens of towards