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SEC/043/2018-
BSE Limited
Mumbai Samachar Marg,
Fort, Mumbai - 400 001.
Stock Code : 532638
Dear Sirs,
SHOPPERS STOP
August 10, 2018
National Stock Exchange of India Ltd.
Exchange Plaza,
Bandra-Kurla Complex,
Sandra (East}, Mumbai - 400 051.
SHOPERSTOP
Sub: Submission of Annual Report 2017-2018.
Pursuant to Regulation 34(1) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, we wish to inform you that the members at the
21st Annual General Meeting of the Company held on July 27, 2018 have approved
and adopted the Annual Report for the financial year 2017-18.
In this connection, please find enclosed herewith the said Annual Report for the
financial year 2017-18. The same is also available on the Company's website at
www.shoppersstop.com.
We request you to kindly take the same on record.
Thanking you,
Encl: aa
Shoppers Stop limited Registered & Service Office - Urnang Tower, 5th Floor, Mindspace, Off. Link Road, Malad (West), Murnbai - 400 064, Maharashtra. T + 022 42497000, F + 022 2880887 7.C IN : L51900MH1997PLC 108798. E- mail us at cust omerca re@slloppersstop.com , To ll Free No.:T + 1- 800 - 419 - 6648 (9 am t o 9 prn).
BRINGING ROMANCE
BACK TO RETAIL
A N N U A L R E P O R T 2 0 1 7 - 2 0 1 8
BRINGING
ROMANCE
BACK TO
RETAIL
When we entered the business of retailing in 1991, we had a simple mission – to transform the way India shops. From a single 4,000 sq. ft. store in suburban Mumbai, we have metamorphosed into a trusted retailer that caters to millions of customers across the length and breadth of the country.
But our raison d’être remains the same.
We are a retailer at heart but have always stood for much more than just our products, our brands, our stores and our services. We represent all those soul-stirring moments that unfurl as people shop for something new
- a young couple starting a family of their own, daddy’s little girl growing into an independent young woman, a group of friends becoming each other’s confidantes. We are deeply connected to our customers’ journeys.
We are bringing the stories back to shopping.
We are bringing the giggles back to the trial room.
We are bringing the exhilaration back to online shopping.
We are bringing the romance back to retail.
But in the recent past, India’s retail ethos has significantly shifted. Deep-discounting has become par for the course. And, brand loyalty has lost its sheen. The time has therefore come for retail to reinvigorate itself and rewrite its story. As pioneers of the industry, we are taking charge and leading that change.
Our customers come through our doors for our superior product assortment, but we want them to stay for the moments of personal transformation they experience in our aisles. Our customers click onto our shopping site for convenience, but we want them to come back for the sheer joy and promise of adding to their shopping carts.
And so, we are making the shopping experience more immersive, more seamless and more exciting. There’s more to enjoy. And much more to look forward to.
02000000000000000000000000000000222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222222 Annual Report 2017-2018AnnAnnualual RReport 2017-
GROUP
OVERVIEW
Shoppers Stop Ltd. is a professionally managed and systems-driven organisation promoted by the K. Raheja Corp Group (Chandru L. Raheja
Group). Your Company has played a pivotal role in bringing about the
retail revolution in India. Since inception in 1991, we have introduced
various retail formats that have set a benchmark for the Indian retail industry. Apart from the flagship business of department stores,
we also operate specialty stores for beauty, books-toys-stationery and
home décor.
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Our shopping website and mobile app have more than 50,000+
products across different categories and sub-categories to
choose from
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HOMESTOP
CROSSWORD
Premium home concept store
The definitive place and space for those who seek information, knowledge or simply the pleasure of reading
05
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HELLO BEAUTIFUL!
Bringing the best brands in beauty to our customers
(Including 2 shop-in-shop)
STORES
07
STORES STORES
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OUR REACH
Amritsar
Delhi
Ahmedabad
Vadodara
Bhopal
Noida
Pune
Jaipur
Hyderabad
Gurgaon (^) Chandigarh
Raipur
Surat
Siliguri
Ranchi
Gandhinagar
Udaipur
Kottayam
Kochi
Panaji
Calicut
Nashik
Kohima
Mangalore
Thrissur
Vijayawada
Mysore Coimbatore
Aurangabad
Indore
Durgapur
Kolhapur
Trivandrum
Meerut
Agra
Latur
Nagpur
Visakhapatnam
Ludhiana
Jalandhar
Bengaluru Chennai
Mumbai
Kolkata
Lucknow Kanpur
Shoppers Stop DC locations
Specialty* * (includes Crossword, Mothercare, HomeStop, M.A.C, Clinique, Bobbi Brown, Smashbox and Estée Lauder outlets)
Graphical representation not to scale
Faridabad
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CHAIRMAN’S
REVIEW
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It was a year of major
upheavals. To bring
our focus back on the department store
and omni-channel
business, we have
exited from all the Company’s non-core
businesses.
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CONTRIBUTION TO
COMPANY’S SALES
+5.3 Million
FIRST CITIZEN LOYALTY
PROGRAMME MEMBERS
It is with a great pride and reflection that I present to you my final annual report of Shoppers Stop as its chairman. It was a year in which we made key decisions to align ourselves to the changing dynamics of the retail industry and secure our long-term growth.
The fiscal was also a remarkable one for the Indian economy and was characterised by implementation of path-breaking policy reforms such as the goods and services tax (GST). Notwithstanding the initial disruptions across the supply chain, over the longer term, GST will benefit all sections of the economy. Along with enhancing transparency and boosting investments, it will accelerate the pace of formalisation of the economy, which will aid organised players.
Our economy withstood these hiccups efficiently and registered a growth of 6.7%. Amid early signs of reviving private investment, improving industrial production and favourable monetary policies, the Indian economy is likely to grow at 7.4% in the ongoing fiscal (source: RBI). Rising purchasing power owing to multiple enablers such as a normal monsoon, pay hike for government employees and continued thrust to the rural economy is likely to propel consumption growth in the economy. This will improve the prospects of India’s retail sector.
With rapid growth of the online retail segment on one hand, and increasing participation from foreign players on the other, the Indian retail industry is going through an exciting phase. Healthy economic growth, improving
demographic profile (in favour of young, earning middle-class population), urbanisation and growing prominence of the Tier- and Tier-3 cities, are the key growth drivers for Indian retail. The sector is projected to grow from $672 billion in 2017 to $1.1 trillion in 2020. Further, the size of India’s modern retail could double over the next three years to $111.25 billion (Source: IBEF Retail Report, 2018). In FY 2018, your Company invested significant efforts into identifying strategic priorities and strengthening operations. A result of this was that we exited our non-core businesses in the mixed retail format, entertainment centres and duty-free airport retailing segments. We also accelerated the pace of deleveraging our balance sheet and reduce debt worth ` 508 crores during the year. The cash flows freed will be deployed to enhance our business and take the Company to greater heights.
Your Company also put up a healthy performance. Uptick in like-to-like sales coupled with higher cost-efficiencies and savings in interest costs boosted our overall profitability. Going forward, we will expand our reach with a complementary mix of brick-and-mortar stores and our online presence. Adoption of this omnichannel strategy will empower us to stay ahead of the curve by meeting our customers’ latent and existing needs with speed and efficiency. I reflect on my 20-year plus association with Shoppers Stop with a great pride. As one of the early
Dear Shareholders,
entrants in the Indian organised retail sector, your Company has earned longstanding trust and respect of customers. The fact that our existing customers contribute 75% of our revenues is a testimony to the healthy bond that we share with them. Over the years, we have built a large yet agile retail Company that is ready to deliver a promising future. As I step down from the Board as the Chairman of Shoppers Stop, my heart is filled with the love and respect showered upon me by all the people I connected with over these two decades. No words can sufficiently express my heartfelt gratitude to all the customers, employees, business associates and investors who have supported us.
I would request you all to welcome Mr. B.S. Nagesh as the Non-Executive Chairman of Shoppers Stop with the same love and respect that you have bestowed upon me in the past many years. He has been associated with the Company since the very first day and has donned multiple hats throughout its exciting journey. I am confident that under his able leadership, we are uniquely poised to accelerate the growth momentum of the Company. It is our constant endeavour to delight our customers and create value for all our stakeholders in a sustainable manner. On behalf of the Board of Directors of Shoppers Stop, I want to thank you all for your continued trust, confidence, and support.
Chandru L. Raheja Chairman
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able to swiftly adjust our inventories and sales. As a result of this, we are happy to report that your Company is 100% GST compliant and all processes in the supply-chain have been seamlessly aligned to power onward and upward.
On the business side, FY 2018 was a hallmark year for us. We have made strategic decisions to evolve our business as our customers’ preferences have evolved.
SHARPEN FOCUS ON CORE
BUSINESS + STRENGTHEN THE
BALANCE SHEET
In a bid to sharpen our focus on our core department store business and omni-channel strategy, we decided to exit our peripheral non-core businesses. Therefore, we divested our stakes in Hypercity Retail — the mixed retail format, Timezone Entertainment Private Limited – the JV business of family entertainment centres, and Nuance Group (India) Pvt. Ltd. – the duty-free airport retailing JV. We believe that these exits will serve in giving us the eagle eye focus required to significantly scale-up our core-businesses while also dramatically change our balance sheet and thereby increase shareholder value. We aim to be completely debt-free by FY 2019.
We plan to open 4-6 department stores and 8-10 beauty stores each year for the next 3 years to reach a wider and broader footprint. Where our physical stores are not present, our online shopping site will give customers the joy of shopping at a single click. Our robust investment in omni-channel will continue steadfastly.
Furthermore, as a testament to Shoppers Stop’s potential and India’s
robust retail story, Amazon.com NV Investment Holdings LLC, registered as Foreign Portfolio Investor with SEBI in India, has invested by acquiring 5% stake in your Company.
OMNI-CHANNEL PIVOT
Shoppers Stop was among the first retailers to invest in e-commerce, digital technology and organisational alignment to support a seamless customer experience. However, we understand that customer expectations are changing at an even faster pace today than just a few years ago. In view of this, we have embarked on a path-breaking partnership with Amazon India to deepen our presence in the online space. In addition to our own shopping site www.shoppersstop. com and mobile app, online shoppers will now have the opportunity to also experience Shoppers Stop in the marketplace arena via our flagship brand store on Amazon.in. This alliance with Amazon.in will give a significant fillip to the growth of our omni-channel business, helping us to achieve our target of 10% of overall sales from digital touch-points much quicker than we had anticipated.
BUILDING SUPERLATIVE
ASSORTMENT AND CUSTOMER
EXPERIENCES
In the year gone by, we have partnered and launched a slew of new brands such as Rheson by Rhea and Sonam Kapoor, Nush by Anushka Sharma and Smashbox in beauty. We will continue to evaluate opportunities to bring in aspirational and sought-after brands into our fold.
Further, we are making improvements in our Private brands portfolio especially with respect to styling
and pricing. We are positive that these changes will bear fruit in the coming year and be a game-changer for the brand.
We continue to create exciting, unique and engaging experiences for our customers. Our aim is not just to delight, but also to elevate customer experience. We believe our investments in technology and analytics will further help us enhance our customer centricity. Our love for our customers and our passion for retail has compelled us to relook at the way we conduct our business and our role in shaping India’s retail story. We want to bring the joy back to shopping by bringing the romance back to retail.
My life has been enriched both professionally and personally in the last 17 years while donning various management roles in this wonderful and exciting journey at Shoppers Stop. I feel humbled to be a part of this magnificent journey in which your Company has achieved key milestones like going from 7 stores in 2001 to 83 in March 2018, marquee brand and partner associations, and successful rollout of impactful customer engagement programmes.
I am delighted to welcome Rajiv Suri who will take over from me. Rajiv comes with a rich experience of 25 years in the global retail industry, and I envision him to take your Company to greater heights from here on. I request you all to extend a warm welcome to him and continue support in the times ahead as we ‘Start Something New’.
Govind S. Shrikhande Managing Director
THE
SPARKLING
ALLURE OF
OUR BRANDS
Over the years, in order to differentiate ourselves and keep our customers hooked to our assortment, we have introduced to India multiple exciting fashion labels and brands through exclusive and non-exclusive retail arrangements with coveted brands. We have also partnered with India’s leading designers, fashion icons and celebrities to co-create and/or
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From the moment you step into our stores or click onto our
shopping website, you are drawn into a luscious array of the best
Indian and international brands. We offer an incomparable range of fashion apparel, accessories, beauty, footwear, perfumes, home
products, maternity and childcare products, toys and much more.
distribute exclusive fashion brands in the country.
One of our big-ticket announcements in FY 2018 was the launch of Rhea and Sonam Kapoor’s highly- anticipated fashion brand Rheson. Rheson is a complete embodiment of Rhea and Sonam’s style statement and personalities – each piece of the collection is distinctive, unique
Our beauty business is one of the key drivers of our top-line growth and also among our biggest differentiators in the market. Our assortment of beauty, skincare and cosmetics is unparalleled with
and homegrown in the truest sense. The design sensibility and concept comes from Rhea and Sonam and the Shoppers Stop team brings their vision to life with our long-time retail experience.
In the year gone by, we also introduced Anushka Sharma’s popular fashion brand Nush.
brands such as Estee Lauder, M.A.C, Clinique, Bobbi Brown, Smashbox, Guerlain, Clarins, L’Oreal, Shiseido, Elizabeth Arden and many more lining our shelves. We pride ourselves on introducing to our customers
the world of beauty and cosmetics, and helping them experience such renowned brands on their home turf and on their own terms. Our beauty advisors and experts are nifty, helpful and always ready to serve customers with a smile.
KRITI SANON’S
WOMEN’S LINE
— MS. TAKEN
VIRAT KOHLI’S
BREAKAWAY
YOUTH FASHION
BRAND — WROGN
RHEA & SONAM
KAPOOR’S HIGH-
STREET FASHION
BRAND — RHESON
ANUSHKA
SHARMA’S HIGH-
STREET FASHION
BRAND — NUSH
DESIGNER ROCKY
STAR’S LINE– RS BY
ROCKY STAR
A WOMEN’S HIGH-
STREET BRAND
BY FASHION
STALWARTS
DOLLY SIDHWANI,
BHAVANA PANDEY
AND NANDITA
MAHTANI —
LOVE GEN
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