20 YEARS. 20 LAKHS LOYAL CUSTOMERS. And the journey goes on. Shoppers Stop has been pioneering the modern retail industry in India for 2 decades, always staying one step ahead. Thanks to the Company's diligence, expertise and credibility, Shoppers Stop has become the highest benchmark for the Indian modern retail industry, providing the ultimate in customer satisfaction across the country. It created a World Class shopping experience by taking the first step towards a new era of fashion and lifestyle.
It's been 20 years of constant evolution and limitless innovation. It's been 20 years of upholding the philosophy to always “Start Something New.”
Annual Report 2010-11 01 MILESTONES
Annual Report 2010-11 02 MAKING BREAKTHROUGHS
Shoppers Stop’s journey to becoming a leader in the modern retail market has been dotted with successes. Over the years, it has built up a sterling reputation with its dedication to stringent quality of products, superior customer care and unparalleled shopping experience.
1991
1992 Offering expanded to include suiting, boyswear and ladies merchandise .
Added Casuals, Kidswear, Jewellery, Fragrances, Cosmetics and Watches making Shoppers 1993 Stop India’s first ever departmental store.
Shoppers Stop launched an exclusive loyalty program titled “The First Citizen’s Club” and 1994 “STOP” the first in-house label.
1995 First steps towards a pan-India presence. Shoppers Stop launched its second store in Bengaluru.
Annual Report 2010-11 03 Shoppers Stop began its journey of exciting marketing promotions and in-store excitement with a first of 1996 its kind “Festival of Britain”, celebrated in association with the commercial department of the British Consulate.
Shoppers Stop incorporated as a body corporate. Launched Parikrama, a festival to celebrate Indian 1997 tradition and culture.
Sole retailer to be awarded the Intercontinental Group of Department Stores (IGDS) membership. 1998 Instituted Customer Care Associate as the common designation for all employees.
1999 Retail revolution took roots in North India with the launch of stores in Ansal Plaza (Delhi) and Jaipur.
2000 India’s popular chain of bookstores, Crossword, became a part of Shoppers Stop. Shoppers Stop launched in Chennai.
First Indian retailer to adopt Enterprise Resource Planning (ERP) in association with J.D. Armstrong to 2001 strengthen processes.
2003 Fashion stepped into the East with the launch of a store in Kolkata.
2004 Shoppers Stop was voted India’s most favoured retail destination of the year by Images Retail Reward.
Annual Report 2010-11 04 HomeStop – Home needs specialist store launched in Bengaluru. Shoppers Stop IPO 2005 oversubscribed overall by 17.25 times. ‘Crossword’ became a wholly owned subsidiary of the Company. Brand positioning changed from “Feel the experience” to “Shopping. And beyond”.
2006 Mothercare launched in India by Shoppers Stop. Declared “Retailer of the year” at the Images Fashion Forum.
Created movie merchandising history with the unveiling of the Om Shanti Om collection. Celebrated the launch with Shahrukh Khan, Deepika Padukone and Arjun Rampal modelling the 2007 clothes at a fashion show. The Company acquired a 19% stake in Hypercity. Felicitated the Gold Shield Award by ICAI for 'Excellence in Financial Reporting for the Year 2006' in the Manufacturing & Trading Enterprise category.
Shoppers Stop was awarded the “Emerging market retailer of the Year” at the World Retail 2008 congress in April 2008. Mr. Nagesh has been inducted into the “World Retail Hall of Fame” at the World Retail Congress in Barcelona. Shoppers Stop repositioned and reinvented as a “bridge to luxury” brand with the unveiling of the new logo and tagline, “START SOMETHING NEW”.
2009 Pioneered mascot licensing through an exclusive tie-up for certain products with Vodafone for their popular brand mascot Zoozoo.
2010 Operations expanded to 36 stores across 15 cities.
2011 Recognised as the ‘Most Respected Company in the Retail Sector’ by Business World.
Annual Report 2010-11 05 BRAND JOURNEY BRAND REINVENTION
The evolution of the brand Shoppers Stop began when the baseline of the brand logo changed with ever-rising customer aspirations. From the 'Ultimate Shopping Experience' in 1992 and 'Feel the experience while you shop' in 1993, to 'Shopping. And beyond.' in 2005, the brand journey speaks about a paradigm shift from enjoying the international shopping experience to shopping for emotional fulfilments: for example, buying a diamond ring for your loved one to express your love or flaunting your status.
This changed to 'Start Something New' in 2008 as a part of the Brand's Makeover strategy, but still connecting to the current mindset of customers to constantly upgrade and experiment.
1991 – A beginning: Exclusively Male 1992 – Becoming a family stop
1993 – Grabbing attention
1994 – Infusing excitement
Annual Report 2010-11 08 1996 – Bringing in an International Experience
1998 – Not forgetting our roots
2002 – Emotionally Bonding with the market
Annual Report 2010-11 09 2003 – Outdoing customer expectations
2004 – Presenting the Corporate Entity
2005 – Evolving as a Brand to: Shopping. And beyond.
Annual Report 2010-11 10 2007 – Being simply irresistible
2008 – Thinking ahead and revamping ourselves with changing times
2010 – Riding current times
Annual Report 2010-11 11 HR PRACTICES
Annual Report 2010-11 12 INNOVATIVE TEAMWORK
Because customers come first at Shoppers Stop, every employee is a Customer Care Associate, right from the Vice Chairman to the floor staff. Associates start each day with the anthem 'Had Se Aage' written by Gulzaar Sahab, sung by Sonu Nigam and composed by Ram Sampat.
To keep such highly-involved workforce Jo Jeeta Wohi Sikandar – Recognises and Measurement of Associate Satisfaction – engaged and motivated, Shoppers Stop has lauds performances of associates who have We actively measure associates’ satisfaction introduced many people initiatives. gone beyond the call of their duty. by conducting an annual online survey to
Parichay – The Induction: This is an induction The Baby Kangaroo Programme – determine the Associate Satisfaction Index programme that comprises of classroom Recognising High Potential, this is the first (ASI). All associates participate, across levels, training, job training and also introduces the program in the retail sector which offers making this an important tool for continuous family of the associates to the organisation. a structured growth path to associates. improvement.
Learning and Development Centre – The The programme has won many accolades Learning and Development Centre is in the industry and one of them is the responsible for supporting associates in their prestigious “DMA – Erehwon Award for development needs as well as providing the Innovative HR Initiatives”. organisation with people talent for various initiatives.
Annual Report 2010-11 13 REACH & CUSTOMER EXPERIENCE
Annual Report 2010-11 14 REACHING NEW BOUNDARIES
Shoppers Stop has been delighting customers by offering a complete shopping experience in many cities around the country. It is this much-appreciated and talked-about experience that is now being introduced to other, newer cities in India.
Customers are treated with a complete Shoppers Stop has reached out to sensorial experience while shopping at customers across India, and also to Shoppers Stop stores. The soothing fragrance NRIs, through its e-commerce website, of the Beauty hall at the entrance mesmerises www.shoppersstop.com, which delivers to the customers as soon as they step in. The more than 500 cities and towns across the luxurious and uncluttered layout of the stores country. The online shopping website offers helps customer shop at ease while the peppy the ease and convenience to shop for leading Shoppers Stop Radio brightens up their mood. lifestyle brands, from anywhere with secure The liberty to try out products without the payment options and also allows First Citizen Amritsar obligation of purchase – like make-up – adds members to earn and redeem points online. Ludhiana to the overall shopping experience and the Café in each store ensures a refreshing break in-between shopping. Moreover, Fashion Siliguri Bhopal Assistants at each store help customers raise Durgapur their fashion quotient by assisting them while Indore Nashik Nagpur making a purchase decision. Aurangabad During the year, the Company extended this unparalleled shopping experience to newer cities and catchment by launching 6 Shoppers Stop stores.
(includes Crossword, Mothercare, HomeStop M.A.C., Clinique and Estee Lauder outlets)
Annual Report 2010-11 15 FORMATS
Annual Report 2010-11 16 DIVERSIFYING OUR KNOWLEDGE
Shoppers Stop provides for the customers’ every need, be it fashion and home needs or specialty retailing such as books, maternity and infant care and cosmetics. Products include both national and international brands that have one thing in common – their unquestionable quality.
Shoppers Stop HomeStop Crossword
The Company's flagship business of HomeStop is the first-of-its-kind premium Crossword is the leader in the lifestyle department stores is manifest in home concept store present in 3 cities at 4 bookstore category with a unique product mix Shoppers Stop. It offers customers an locations. It offers a wide range of home of books, magazines, CD-ROMs, music, international shopping environment and a products across categories along with some stationery and toys. This is further enhanced world class shopping experience through its of the most reputed national and international with services like 'Dial-a-Book', and facilities 38 stores in 17 cities. brands. like Gift Vouchers and 'Return, Exchange, It is a one-stop shop for all home needs & Refunds' policy. Currently, there are It houses a host of international and domestic 69 Crossword stores/doors in operation. brands across categories such as apparel, ranging from home décor to furniture, bath accessories, cosmetics, home & kitchenware accessories to bedroom furnishings, and also its own exclusive brands. Some mattresses to draperies, and carpets to health international premium brands retailed at equipment, all under one roof. Shoppers Stop are Austin Reed, MUSTANG, CK Jeans, French Connection, Tommy Hilfiger, Esprit, UCB, Chanel, Lancome, Guess, Mango, Jack & Jones and US Polo, to name a few.
Annual Report 2010-11 17 HyperCITY Mothercare & Early Learning Centre (ELC) Estee Lauder Group of Companies
HyperCITY has redefined the experience of the Shoppers Stop Ltd (SSL) has exclusive Shoppers Stop has entered into a non- Indian consumer in the 'big box mixed retail' arrangements to open Mothercare and ELC exclusive retail agreement with world format. Its offerings include food and grocery, shop-in-shops in India. Mothercare, UK's renowned cosmetics major Estee Lauder to general merchandise and apparel. The premium international brand for maternity, open stores for international brands like business operates a 'More to Discover' byline infant and childcare products, currently has 29 M.A.C, Estee Lauder and Clinique in India. and delivers quality products at a great value. stores operated by SSL, including 7 stand- As on March 31, 2011, Shoppers Stop has 17 HyperCITY operates 9 stores, one each in alone stores with a presence in 11 cities. M.A.C stores with a presence in Mumbai, Amritsar, Bhopal, Jaipur, Ludhiana, Navi Early Learning Centre (ELC), UK's number one Pune, Bengaluru, Amritsar, Hyderabad, Mumbai, Hyderabad, and Bengaluru and 2 in educational toy brand for children aged 0-6 Chennai, and Delhi. Estee Lauder has 4 stores, Mumbai. years is also available in select Shoppers Stop including 3 standalone stores, one each in stores. Delhi, Bengaluru and Mumbai. Clinique has 10 stores, including two standalone stores.
Annual Report 2010-11 18 Timezone Airport Retailing Shoppers Stop believes that Indian consumers The Company currently has 1 store each in are looking for multiple options to entertain Bengaluru and Hyderabad duty paid and 1 duty free themselves and their families. It has forayed at Bengaluru. into the entertainment sector with a stake of 46.89% in Timezone Entertainment Private Limited, which is the business of operating Family Entertainment Centres (FECs). It currently has 12 doors in leading metros.
Annual Report 2010-11 19 LOYALTY PROGRAM & FIRST INSIGHT
Annual Report 2010-11 20 REWARDING OUR CUSTOMERS
Shoppers Stop’s strength is its customer loyalty. It strives to make the shopping experience as valuable as possible, so that customers keep returning for more. Shoppers Stop takes the shopping experience to the next level, by making it personalised for its loyal customers.
Annual Report 2010-11 21 First Citizen Programme
Shoppers Stop believes that the customer The objective of the First Citizen Programme is 80% 75% takes priority over all else, which is why this to ensure customer delight and enhance 72% 73% 70% programme has more than 2 million satisfied customer satisfaction. Shoppers Stop truly 65% 61% 60% members who contribute up to 73% to our values the feedback it receives from its 50% sales. customers. To truly know customers, 40% The First Citizen loyalty programme is the most Shoppers Stop analyses the proprietary First 30% successful relationship and loyalty programme Citizen data on a continuous basis using 20% in the retail industry in India and today. The 'Drishti', a data warehousing and data mining 10% base of the First Citizen Members continues to IT backbone. 0.0% 2007 2008 2009 2010 grow. Their trust in the brand has inspired it to Customer groups are analysed using the 2011 First Citizen contribution to Sales continue to excel in service, quality and proprietary 'First Insight'. This helps to plan offerings. targeted offers, brands and communications.
Annual Report 2010-11 22 Crossword Book Rewards Programme Discovery Club Programme
Loyal Crossword Bookstore customers are The HyperCity Discovery Club brings every 90% 81% 80% rewarded through the Crossword Book customer great savings, exclusive 80% 70% Rewards programme with points, discounts, promotions, special previews and a whole lot 63% 63% 60% promotional offers and more. 'eWords', a more. One can earn discovery reward points 60% monthly e-newsletter with reviews of new and redeem them against purchases. This 50% books, news about in-store events and best loyalty programme reflects HyperCity's 40% seller lists, is mailed to these members. The commitment to offer its customers the 30% Crossword Book Rewards loyalty programme ultimate shopping experience. HyperCity's 20% 10% has more than 2.77 lac members and has loyalty programme Discovery Club, launched 0.0% contributed to 40% of sales of Crossword in 2009, continues to grow and represent 44% JAN 06 AUG 06 NOV 07 FEB 09 APRIL 10 Bookstores Ltd. of sales in Q4FY11. There are a total of 1.63 Customer Satisfaction Index Scores lacs members.
Annual Report 2010-11 23 BRANDS
Annual Report 2010-11 24 ORIGINAL CREATIONS
Attuned to the brand philosophy of ‘Start Something New’, Shoppers Stop observes fashion trends, and takes delight in offering unique quality merchandise that is trendy and aspirational. It takes pride in the fact that its customers find exactly what they need and are encouraged to explore more options.
Since its inception, Shoppers Stop has continued to introduce new brands and has Smart, comfortable clothes that are a perfect stayed ahead through exclusive and non- mix of classic and contemporary styling. exclusive tie-ups with various brands. The range of Indian and international brands have been carefully chosen to meet the needs of the modern shopper. Trendy casual clothes and accessories based Extensive experience in the retail space has on global fashion trends. helped it anticipate the customers’ shopping needs and introduce several quality international brands in India much before Elegant and exquisite traditional occasion others. Shoppers Stop has set the benchmark wear for ethnic chic. for what modern retail can offer and aspires to take it to the next level.
Annual Report 2010-11 25 Sophisticated formal and casual clothes for Shoppers Stop has named world famous sitar Elegantly stylish yet practical and comfortable the power dresser. maestro and music composer Anoushka women’s wear for special occasions. Shankar as the brand ambassador for haute curry. She is not only a youth icon but is also an apt example of ethnic diversity, be it through haute curry is a young and funky ethno- Fashionable formals and smart casuals for her music or personal style. She perfectly fusion brand for today’s young fashion stylish and flamboyant men. matches the brand values and positioning of divas. Vivid Indian colours and motifs are haute curry and her personal style statement fashionably captured in modern silhouettes mirrors the modernised ethnicity of haute and designs. The line comprises of stylish curry’s designs and styles. Fashionable coporate wear and accessories kurtis and trendy salwaar kameez and for women. dupatta sets.
Fashion denim wear for the urban youth that epitomises individuality.
Annual Report 2010-11 26 INTERNATIONAL BRANDS
Shoppers Stop enjoys an exclusive retail This German brand has been brought to the The global appeal of the collection is arrangement with the British fashion and Indian market through an exclusive retail underscored by its international silhouettes lifestyle brand Austin Reed. Under this, the arrangement, in the department store that perfectly tally with timeless yet trend- Austin Reed range of formal business wear segment, with Shoppers Stop Ltd. The inspired colours and details. It allows the and smart casual wear for men and women is apparel exhibits significant international discerning fashion devotee the option of exclusively available at Shoppers Stop stores. influence in style and finesse and it exudes buying complete ensembles, over and above urban chic with its authentic style and individual garments. unmatched comfort. As the first denim brand of Europe, MUSTANG is world renowned for its precise fits and washes.
Annual Report 2010-11 27 MARKETING INITIATIVES
Annual Report 2010-11 28 GROUND-BREAKING INNOVATION
Innovation is the key to everything at Shoppers Stop. Carrying forward the brand philosophy of ‘Start Something New’, the past year saw clutter-breaking innovative campaigns that lent newness and topicality to pull customers and helped increase footfalls.
Brand Campaign Film Merchandising: Break Ke Baad Choose Your Own Gift
This year's campaign continues with the Fashion in India is preceded and largely Shoppers Stop presented the entire store to thought of “START SOMETHING NEW”. governed by Bollywood's style statement. In their First Citizen Members and empowered The brand Shoppers Stop is aligned with social the past, Shoppers Stop met with much them to choose their own gift during their issues in the upcoming campaign – the core success for its exclusive apparel lines inspired annual loyalty programme promotion. Instead message is to showcase HIGH FASHION. by great films such as Om Shanti Om, Love Aaj of offering a pre-selected gift, Shoppers Stop The merchandise connect is extremely Kal, and Karthik Calling Karthik etc. This year offered its loyalty programme members with strong and creates an intense desire to Shoppers Stop tied up with mega starrer film Bonus Reward Points on their purchases, buy merchandise in customers minds. The 'Break Ke Baad' and launched an exclusive which could be redeemed on any product of campaign will feature stylish people in simple apparel line under its popular youth brand Life. their choice. day-to-day situations actually doing Deepika Padukone's feminine and chic style Start Something New Today something new – so the “Start Something and Imran Khan's chocolate-boy charm was New” can actually translate into action. mirrored perfectly in the casual appeal of The 'Start Something New Today' campaign is the collection. a series of small ads in leading publications Social Media Marketing that appear every Thursday on pg. 3. These End-of-Season Sale Innovative initiatives in the Social Media ads basically provide interesting fashion and Marketing space have kept the brand Shoppers Stop launched its 'Delightfully Low shopping tips to the customers. At the same connected with our customers from across the Prices Upto 51% Off Sale' campaign with new time, the same tip is highlighted at the country. Various contests on this space have eye-catching and clutter breaking imagery. physical stores through Visual Merchandising. ensured that Shoppers Stop enjoys a large The extensive outdoor campaign created the number of LIKES, more than 7 lacs on right visibility through a perfect selection Facebook. Shoppers Stop is also active on of billboards. This was supported by other platforms such as Twitter, Foursquare advertising in leading publications across and You Tube. cities with Shoppers Stop stores.
Annual Report 2010-11 29 FINANCIAL HIGHLIGHTS
Annual Report 2010-11 30 REINVENTING PROFITS
Shoppers Stop has always strived to keep its sales growth at a constant level. It is assured that the high standards of the products complement the high output level of profits.
Shoppers Stop has taken giant steps towards achieved a Gross Retail Turnover of ` 1929 achieving strategic growth. The focus on cost crores, up by 23%, while the gross margin 21,000 19,290 rationalisation, streamlining processes and stood at ` 599 crores showing a growth ensuring customer satisfaction has given it an 18,000 of 21%. CAGR = 23% 15,684 edge in the market. With equal emphasis on 15,000 14,001 cautious planning, Shoppers Stop has The Company has witnessed a strong and 12,069.1 12,000 consolidated its position as a leading retail stable environment over the year with strong innovator in India. growth in like-to-like sales of 17% for the year. 9,000 8,996
The Company has worked towards developing It is also expanding steadily in metros as well 6,000 itself as an exemplary retail model with the as tier II cities, which is witnessing the 3,000 combination of right positioning in the minds consumption boom and has given the 0 2007 2008 2009 2010 2011 of its customers, cost rationalisation Company access to a growing number of Gross Retail Turnover measures and exiting non-profitable customers. businesses. In FY 2011, Shoppers Stop Ltd.
Annual Report 2010-11 31 AWARDS
Annual Report 2010-11 32 Over the years the Company’s success in the retail field was monitored and awarded by the business world. It wasn't Lady Luck who smiled on the organisation and helped it achieve what it has, but the dedicated devotion of all the Associates, Customers and Stakeholders.
During the year 2010-11, Shoppers Stop was Retailer of the Year“ award at the Images Awards for Retail Excellence at Asia Retail the proud recipient of many industry Fashion Awards 2011 for its ecommerce Forum (Asia Retail Congress). accolades. website: www.shoppersstop.com Shoppers Stop also received a Merit It has been recognised as the 'Most ET Retail Awards, backed by the Economic Certificate in the category 'Department Respected Company in the Retail Sector' Times and Retailers Association of India (RAI), Store more than 20,000 sq.ft.' at the VMRD by Business World. have awarded Shoppers Stop with Retail Design Awards 2011. the 'Marketing Idea of The Year' award for Shoppers Stop won the prestigious loyalty POWERBRANDS, a research driven book of the Zoozoo merchandise tie-up with award for 'Customer & Brand Loyalty' in the India’s most powerful brands recognised Vodafone-Essar. 'Retail Sector' consecutively for two years Shoppers Stop as one of the most (2010 & 2011) at the Loyalty Summit. Shoppers Stop has been conferred with the aspirational brands, which has fortified its "Best Retail Marketing Campaign of the presence in the hearts and minds of the Indian The Company also received the “Most Year" award and 'Customer Loyalty consumers. Admired Non-Store Fashion and Lifestyle programme' award at the 7th Reid & Taylor
Annual Report 2010-11 33 SOCIAL RESPONSIBILITY
Annual Report 2010-11 34 PIONEERING SOCIAL RESPONSIBILITY
At Shoppers Stop, it is a moral duty to give back to society. Several social concerns are supported at all levels of the organisation. Associates are encouraged to keep in mind their Social Responsibility, and the Company uses measures and technology that positively effect the welfare of society. Customers are also motivated to look at the big picture and help out the less fortunate.
As a Responsible Corporate Citizen, Shoppers (VFD), LED, rescheduling of Air Handling Units The current brand campaign voices urban Stop has supported many social concerns. (AHUs), resulting in a 16% reduction in energy social concerns. Over the years, Shoppers Stop has taken many unit consumption in LTL stores. In the past year Foundation Day celebration Corporate Social Responsibility initiatives to we have been able to save 11 lakhs units. The Foundation Day of Shoppers Stop is voice various causes. Some initiatives of the Back to Earth by HomeStop Company's philanthropy include giving away dedicated to upholding social causes. Each green plants to customers at the launch of HomeStop continued to offer the eco-friendly store, region and Services Office helps an NGO Bengaluru’s first Shoppers Stop store. The first brand 'Back to Earth'. This collection has been of its choice. In 2010 the Services Office had Shoppers Stop store in Kolkata being inspired by nature and the products are made organised a Blood Donation drive to support inaugurated by under-privileged children, and of rubber wood, dead wood, Chinese jujube, the cause of Thalassemia in association with the Parikrama festival promoting rural artisans bamboo, jute, natural fibre, recycled wood and the State Blood Transfusion Council. linen. One can choose from a wide range of so that they could start to earn sustainable Salwar Kameez Dupatta (SKD) incomes. Some of the other initiatives taken in products across categories like furnishing, bed Exchange offer linen, kitchen accessories and home decor. the past year are: This is an annual exchange offer that Shoppers Energy Conservation Brand Campaign 'Start Something New' Stop has conducted for many years in association with NGOs like Concern India and In 2007 we formulated an Energy Carrying forward the brand's philosophy of Goonj. For this offer we invite customers to Management Policy. Taking it a step forward, 'Start Something New', the brand campaigns donate their old but wearable SKDs towards we took up “Environment Project A” and of Shoppers Stop have voiced various social the cause and in return enjoy discounts on deployed energy saving and conservation concerns and causes in its typical their new purchases of SKDs. systems like Central Energy Monitoring tongue-in-cheek manner. The brand campaign Systems (CEMS), Variable Frequency Drive of the year 2008 voiced the cause of environment conservation. Annual Report 2010-11 35 BOARD OF DIRECTORS
CHANDRU L. RAHEJA
RAVI C. RAHEJA NEEL C. RAHEJA GULU MIRCHANDANI
SHAHZAAD DALAL NITIN SANGHAVI DEEPAK GHAISAS
NIRVIK SINGH B. S. NAGESH GOVIND SHRIKHANDE
Annual Report 2010-11 36 CONTENT
Chairman's Statement 039
Board of Directors 040
Financial Highlights and Key Ratios 041
Directors' Report 042
Management Discussion & Analysis Report 050
Corporate Governance Report 064
Auditors' Report 079
Balance Sheet 082
Profit & Loss Account 083
Cash Flow Statement 084
Notes to the Financial Statements 089
Balance Sheet Abstract and Company's General Business Profile 106
Financial Information of Subsidiary Companies 107
Consolidated Financial Statements 109
Annual Report 2010-11 37 Annual Report 2010-11 38 CHAIRMAN’S STATEMENT
PROMOTING LEADERSHIP
The modern retail industry in India has done well in In the year, your Company has acquired 32% stake In the year under review, your Company received a FY 2010-11 on the back of economic and political in HyperCity Retail (India) Limited making it a 51% number of coveted awards. These have been stability, long term policy continuity, strong subsidiary of your Company. Therefore, the featured on page nos. 32 and 33 of this Annual underlying economic growth, improved customer consolidated financials of the year reflect HyperCity Report. One of the most significant was sentiment, growing urbanization & affluence and financial numbers. Your Company and its “Most Respected Retail Company of the Year” from enormously growing potential demand in the Indian management believes that there is immense Business World. This award is given to some of the Market. potential in the hypermarket sector of modern best companies in various sectors, and in modern retailing, and HyperCity will be a significant growth retail your Company has won it. Apart from that For the year 2010-11, your Company has achieved engine for your Company’s overall profitability in the other important awards that your Company has revenues of ` 1929 crores, up by 23%, EBIDTA of years to come. HyperCity’s business is currently in won were – VMRD Retail Design Award, Customer ` 152 crores , up by 34% and Profit after Tax of ` 75 the evolution stage being in its fifth year of & Brand Loyalty Award at the Fourth Loyalty Awards crores, up by 50%, over the previous year. operation. In terms of customers franchise it has programme and most admired “Non Store Fashion Operating profit (EBIDTA) has increased from 7.30% been able to earn commendable loyalty from its and Lifestyle Retail of The Year” at IMAGES Fashion in the previous financial year to 8% of sales in the customers. Its stores are well appreciated by Awards 2011. These awards only reiterate the current financial year. customers and even admired in the industry. respect and admiration that your Company In the year gone by, your Company saw a Like-to- Awards conferred upon HyperCity across last many commands in the industry and amongst its peers. Like sales growth of 17%, whilst chain level growth years support this fact. Your Company has drawn up extensive plans to in sales was 23%. The Average Selling Price & Your Company’s loyalty programme, ‘First Citizen’ launch its next phase of growth and expansion. Transaction Size have seen growths of 7% and 9% achieved a major milestone in FY 10-11. The total With the strong backing of your Company’s respectively over the last year. The QIP and membership of the programme crossed the customers, shareholders, associates and vendor Promoters Warrants issue totaling to ` 253 crores 2 million mark and today is one of the largest loyalty partners, your Company and its management is was successfully completed by your Company. In programmes across sectors. Your Company’s First confident that the your Company will go from view of this robust performance a 15% dividend Citizens continue to be a huge bastion of support strength to strength in the future and continue to be has been recommended by the Board, subject to and have contributed to 73% of your Company’s a major and significant player in the field of Indian approval of members. sales. As our loyalty programme grows, our modern retail. As part of our continuous endeavour to grow and Facebook fan club is also growing very fast. It has penetrate the market, your Company opened 6 new now crossed 7 lakhs fans. It is very important for a Shoppers Stop stores during the year – one each at retail company like yours to remain in touch with Bengaluru, Bhopal, Delhi, Aurangabad, Siliguri and customers at all the times and social media is an Durgapur taking the number of chain of stores to 38 important avenue to remain in constant touch with CHANDRU L. RAHEJA as of March 31, 2011. At a chain level your customers. Chairman Company has added more than 3,00,000 square feet in the year 2010-11.
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Customer Entry (in mn.) 10 5 0 2006-07 2007-08 2008-09 2009-10 2010-11 Year 6RXUFH &RPSDQ\0,6 $QQXDO5HSRUW_ 0DQDJHPHQW'LVFXVVLRQDQG$QDO\VLV5HSRUW 6KRSSHUV6WRS/WG &RQYHUVLRQ5DWLR &RQYHUVLRQLVWKHUDWLRRIWKHQXPEHURIWUDQVDFWLRQV &DVK0HPR YHUVXVWKHWRWDOFXVWRPHUHQWU\LQWRWKHVWRUHV7UDFNLQJFRQYHUVLRQ KHOSVWKHUHWDLOHUXQGHUVWDQGWKHSURGXFWLYLW\RIKLVIURQWHQGVWRUHHPSOR\HHVDQGWKHDWWUDFWLYHQHVVRIWKHPHUFKDQGLVHDQGVHUYLFHV Conversion Ratio (%) (Departmental Store) 30% 28% 27% 27% 25% 25% 24% 20% 15% 10% Conversion Ratio (%) Conversion Ratio 5% 0% 2006-07 2007-08 2008-09 2009-10 2010-11 Year 6RXUFH &RPSDQ\0,6 6DOHV *URVV6DOHVERWKDWFKDLQOHYHODQGIRU/LNH7R/LNHVWRUHVVKRZHGDQLPSURYHPHQWDVFRPSDUHGWRODVW\HDU7KHJURZWKZDVLQ JURVVUHWDLOWXUQRYHURI6KRSSHUV6WRSGHSDUWPHQWDOVWRUHEXVLQHVV7KHVDOHVSHUVTIWKDVEHHQFRPSXWHGRQEXLOWXSDUHD Sales Per Square Feet (in `) Sales (like-to-like growth %) (Departmental Store) (Departmental Stores) 9000 8671 25 8218 8518 8000 7973 7955 21 ` ) 20 7000 17 6000 15 14 5000 4000 10 3000 2000 4 5 Square Feet (in Sales Per Sales (like-to-like growth %) 1000 1 0 0 2006-07 2007-08 2008-09 2009-10 2010-11 2006-07 2007-08 2008-09 2009-10 2010-11 Year Year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ales Mix (%) (Departmental Stores) Non-Apparels Apparels 100% 41.1% 38.8% 39.6% 40.5% 41.2% 80% 60% 58.9% 61.2% 60.4% 59.5% 58.8% Sales Mix (%) 40% 20% 0% 2006-07 2007-08 2008-09 2009-10 2010-11 Year 6RXUFH &RPSDQ\0,6 3ULYDWH/DEHO 3ULYDWH%UDQGV $QQXDO5HSRUW_ 0DQDJHPHQW'LVFXVVLRQDQG$QDO\VLV5HSRUW 6KRSSHUV6WRS/WG $YHUDJH6HOOLQJ3ULFH $63 $YHUDJH6HOOLQJ3ULFHLVWKH*URVV5HWDLO6DOHVGLYLGHGE\WKHQXPEHURIXQLWVVROG7UDFNLQJ$63KHOSVWKHUHWDLOHUWRDOLJQWKHRIIHULQJDV SHUWKHFXVWRPHUVHJPHQWDVZHOODVLPSURYHWKHSURGXFWLYLW\RIWKHIORRUVSDFH Average Selling Price (Like to Like) (Departmental Stores) 1000 913 900 856 821 800 759 704 700 Average Selling Price ( ` ) Selling Price Average 600 500 2006-07 2007-08 2008-09 2009-10 2010-11 Year 6RXUFH &RPSDQ\0,6 7UDQVDFWLRQ6L]H 7UDQVDFWLRQVL]HUHSUHVHQWVWKHDPRXQWVSHQWE\HDFKFXVWRPHURQKLVEX\LQJ7KLVLVFRPSXWHGE\WKHWRWDOVDOHVGLYLGHGE\WKHQXPEHU RIFDVKPHPRV Transaction Size (`) (Departmental Store) 2400 2207 2100 2029 1800 1843 1713 1562 1500 1200 900 Transaction Size ( ` ) Transaction 600 300 0 2006-07 2007-08 2008-09 2009-10 2010-11 Year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hrinkage (as a % of Sales) 0.70% 0.65% 0.60% 0.55% 0.52% 0.50% 0.47% 0.46% Shrinkage (as a % of Sales) 0.45% 0.40% 0.40% 0.36% 0.35% 2006-07 2007-08 2008-09 2009-10 2010-11 Year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