Download - Shoppers Stop

FASHION RETAIL MANAGEMENT: PROFILE OF MAJOR RETAILER

START SOMETHING NEW ….

PROJECT GUIDE: SUBMITTED BY:

Mr. Sushil Raturi Ajay Kumar M/FMS/08/02

Course Cordinator, FMS Dept. Bhavik Gandhi M/FMS/08/10

National Institute of Fashion Technology, Prachi Jain M/FMS/08/20

Mumbai Sameera Baig M/FMS/08/25

Soumya Mishra M/FMS/08/30

FASHION RETAIL MANAGEMENT

2008 P a g e | 2

CONTENTS

TOPICS Page No.

1. Introduction………..……………………………………………....................... 03

2. Evolution….…………………………………………………………………… 07

3. Status

3.1 Various Location of Shoppers Stop………………………………..... 08

3.2 Number of stores…………………………………………………….. 09

3.3 Retail area……………………………………………………………. 09

3.4 Manpower……………………………………………………………. 09

3.5 Brands………………………………………………………………... 09

3.6 Awards……………………………………………………………….. 10

4. Sales Analysis………………………………………………………………….. 11

5. Financial Analysis……………………………………………………………... 16

6. Product Mix & Price Point…………………………………………………….. 17

7. Human Resource……………………………………………………………….. 19

8. Expansion Plans………………………………………………………………… 20

9. Strategic Alliance……………………………………………………………….. 21

10. Promotion……………………………………………………………………… 22


2008 P a g e | 3

1 INTRODUCTION

Then NOW

The company‟s flagship business of department stores is manifest in Shoppers Stop. A pioneer of

modern retail in India, Shopper‟s Stop Ltd. today, is the country‟s largest chain of Department

Stores. It offers customers an international shopping environment and a world-class shopping

experience through its 24 stores in 12 cities. It houses a host of international and domestic brands

across categories such as apparel, accessories, cosmetics, home & kitchenware as also its own

exclusive brands.

Pioneer of modern retail in India, Shopper‟s Stop Ltd, has been instrumental in bringing about

the retail revolution in India. A professionally managed and systems driven organization,

Shoppers Stop has always been attuned to evolving consumers. The customer insights have

enabled company to service them better and fulfill aspirations.

Shoppers Stop has evolved its positioning to „Bridge to Luxury‟ and continues to reinforce its

leadership position. The company recently revealed our New logo, which reflects the essence of

the company‟s new philosophy.

HomeStop is the first-of-its-kind premium home concept store at Bengaluru, Mumbai and New

Delhi, offering a wide range of products and some of the most reputed national and international

brands.

It is a one-stop-shop for all home needs ranging from home décor to furniture, bath accessories

to bedroom furnishings, mattresses to draperies, carpets to modular kitchens & health equipment,

all under one roof.


2008 P a g e | 4

Spacious, well laid out bookstores that feature methodical classifications, clear signages,

dedicated enquiry/orders desks and attractive displays along with cafés, reading tables and chairs

within the store make Crossword the leader in the lifestyle bookstore category. Its unique

product mix of books, magazines, CD-ROMs, music, stationery and toys is further enhanced

with services like Dial-a-book and Email-a-book and facilities like gift vouchers and „Return,

Exchange & Refunds‟ policy. Crossword Bookstores Limited, is a wholly owned subsidiary of

the company with 48 stores across the country.

Mothercare PLC of UK, the largest specialist retailer for infant and toddler care, is now in India.

It stocks a variety of products for mothers and babies, toddlers and children till eight years of age

with the focus being on style, function and safety. Mothercare is currently present as 19 stores

including 10 shop-in shops at Shoppers Stop in leading metros.

Shopper‟s Stop Ltd. has a 19% stake in Hypercity Retail (India) Ltd. The first store was opened

in 2006 with an area of over 124,000 sq. ft. HyperCITY has redefined the experience of the

Indian consumer in the big store format. Its offering includes food and grocery, general

merchandise and apparel. HyperCITY provides a truly international shopping experience, where

customers can shop in comfort in a large, modern, and exciting environment.

Shopper‟s Stop Ltd. has ventured into catalogue Stores, call and collect stores, internet retail

website and telephone orders through its subsidiary, Gateway Multichannel Retail (India)

Limited under the name of „HyperCITY-Argos‟. Currently there are 5 stores operating at Thane.


2008 P a g e | 5

Shopper‟s Stop Ltd.‟s foray into Food & Beverage began with Brio - a step up the evolutionary

ladder from “franchised coffee bars.” Brio - the café bistro has been designed to be a warm &

friendly place to relax, revive and reflect. It has a classic yet sophisticated ambience, friendly

service and excellent food. Brio has 20 outlets in select cities.

Desi café is the Indian fast food concept by Shopper‟s Stop Ltd. The menu is, expectedly, as full

of perennial favourites as it is with yummy twists. The best part of the fare is that it has

something for every Indian. Be it the breakfast section, the snacks, or the mini-meals – the

choices are diverse enough to take you on a crosscountry tour. The company is currently running

3 outlets of Desi Café, one each in Delhi, Lucknow and Mumbai.

Shopper‟s Stop Ltd. has entered into a non exclusive retail agreement with world-renowned

cosmetics major Estee Lauder to open M.A.C Cosmetics stores in India. M.A.C (Makeup-Art

Cosmetics) the professional brand of choice, is the first brand under the Estee Lauder Group of

Companies portfolio to enter the Indian retail market. Currently there are 4 M.A.C stores

operating in Bengaluru, Delhi and Mumbai (2) with Shopper‟s Stop Ltd.

Arcelia is a new retail concept aiming at the growing accessories & cosmetics segment, with a

strong emphasis on experience and indulgence and primarily caters to discerning women

shoppers. It retails cosmetics, fragrances, fine jewellery, footwear, handbags etc. Currently there

are 2 stores operational in Delhi and Pune.


2008 P a g e | 6

Shopper‟s Stop Ltd.‟s entry into airport retailing is marked by a joint venture with The Nuance

Group AG of Switzerland, the world‟s leading airport retailer. Shopper‟s Stop Ltd is handling the

retail operations in the duty paid zones whereas the joint venture company is handling the

operations at the duty free zones in international terminals. The joint venture company, called

Nuance Group (India) Private Limited, is already operating outlets at the international airports at

Bengaluru and Hyderabad.

Shopper‟s Stop Ltd. believes that the Indian consumers are looking for multiple options to

entertain themselves and their families. It has forayed into the Entertainment sector by acquiring

a 45% stake in Timezone Entertainment Private Limited which is in the business of setting up &

operating Family Entertainment Centers (FECs). It has 5 outlets in Ahmedabad, Hyderabad,

Kolkata and Mumbai.


2008 P a g e | 7

2

EVOLUTION

YEAR EVENTS

1991 The first store opened at Andheri, a suburb in Mumbai selling only

Menswear

1992 Ladies wear was introduced

1993 Added Children & non apparels

1994 Loyalty Program titled First Citizen was launched.

1995 Opened second store in Bangalore

1997 Launched co-branded credit card for our loyalty members in association with

HSBC.

1998 Opened third store in Hyderabad

1999 Implemented JDA Retail ERP (a global leader in retail ERP packages).

Opened our fourth & fifth store in Jaipur & Delhi

2000 Opened sixth & seventh store at Chennai & Chembur – Mumbai. Acquired

Crossword – India 's leading retail book chain

2001 Opened eight & ninth store in Pune & Bandra

2002 Opened the tenth store in Kandivli – Mumbai

2003 Opened the eleventh, twelfth & thirteenth store in Mulund – Mumbai,

Gurgaon & Kolkata

2004 Opened fourteen, fifteen & sixteenth store in Malad – Mumbai, Kolkata &

Bangalore

2005 Opened seventeen, eighteen, nineteen & twentieth store in Pune, Juhu –

Mumbai, Bangalore & Ghaziabad . Launched M.A.C & Homestop – our

home store.

2006 Opened out twenty first (Mumbai) and twenty second store in Lucknow .

Launched Mothercare in India and our F & B outlets Brio & Desi Café.

Bought 45% of Timezone India .

2007 Signed a 50:50 Joint Venture with the Nuance Group for Airport Retailing

Signed an MOU with the Home Retail Group of UK to enter into a franchise

arrangement for the Argos formats of catalogue & internet retailing.


2008 P a g e | 8

3

STATUS

3.1 Various location of Shoppers Stop:

The location of various stores of Shoppers Stop Limited is classified into Shoppers Stop,

Homestop, Hypercity and Speciality (Includes Crossword, Mothercare, Arcelia, M.A.C. Clinique

and Food & Beverage outlets).

The Shoppers Stop group has its presence in 14 cities and 9 states across India.


2008 P a g e | 9

3.2 Number of Stores

Sr Formats No. of Stores No. of cities Remark

1 Shoppers Stop 24 12

2 HomeStop. 03 03

3 Crossword 48 14

4 Mothercare 19 08 10 shop-in-shop

5 Hypercity 01 01

6 Hypercity Argos 05 01 Catalogue stores

7 Brio 20 -

8 Desicafe 03 03

9 M.A.C 04 03

10 Arcelia 02 02

11 Nuance 02 02 Airport retailing

12 Timezone 05 04

3.3 Retail Area

Total retail area of Shoppers Stop and its various formats total‟s to 1.6 million

sq. ft.

3.4 Manpower

Every Shoppers Stop employee is termed as Customer Care Associate to

emphasize the belief that the customer always comes first. The total number of

customer care associates stands at 3754 in the year end March 31, 2008.

3.5 Brands

STOP - Smart, comfortable clothing with a perfect mix of classic and contemporary styling.

LIFE - Trendy, energetic casual clothing & accessories based on global fashion trends.

KASHISH - Elegant & exquisite traditional occasion wear for the ethnic chic.

VETTORIO FRATINI - Sophisticated formal & causal clothing line for the power dresser.

ELLIZA DONATEIN - Fashion formals styled with elegance for the modern working woman.

HAUTE CURRY - Young & funky ethno fusion wear for today‟s young & trans-global fashion

divas.

I JEANS WEAR - Fashion denim wear for the urban youth epitomizing individuality.

INSENSE - Elegantly stylish yet practical & comfortable women‟s wear for social occasions.

MARIO ZEGNOTI - Romantic fashion formals & smart casuals for stylish & flamboyant men.


2008 P a g e | 10

ACROPOLIS - Basic, smart & comfortable line that offers value.

INDI-VISUAL - India visualized in a T-shirt range A snap shot of everything that‟s inherently

Indian in the most colorful manner.

Shoppers‟ Stop offers a wide range of brands (more than 400 brands) for the entire family to

choose from. Exclusive and established brands share shelf space to offer an array of choices

customers across all ages, tastes and occasions. Shoppers‟ Stop is the single largest retailer for

Levi‟s Strauss, Pepe, Lee, Arrow, Zodiac, Ray-Ban, Swatch, among others. It is also a launch

pad for non-apparel brands like Walt Disney, Tencel, Clarins and Elizabeth Arden.

3.6 Awards

Received the following awards from the “Clothing Manufacturers Association of India” (CMAI):

Retail Professional of the year - Mr. B.S. Nagesh (For 3 consecutive years)

Advertising Campaign of the year - Shoppers Stop (For 3 consecutive years)

“Department Store of the Year” at the Star Retailer Awards

“Value Retailer of the Year” to HyperCITY at the Star Retailer

Awards.

“Emerging Market Retailer of the Year” at World Retail

Congress Awards

Mr. B. S. Nagesh has been inducted into the World Retail Hall

of Fame (The first Indian to be bestowed with this honour)

“Retail Destination of the Year” at the Images Fashion Forum

(For 4 consecutive years)

“Most Admired Retailer – Technology Application” at Images

Retail Forum

“Most Admired Retailer – Leisure Category” to CROSSWORD

at Images Retail Forum

“Most Admired Retailer – Retail Design & Visual Merchandising” to HyperCITY at Images

Retail Forum


2008 P a g e | 11

4

SALES ANALYSIS

Customer Entry:

The opening of new stores coupled with attractive advertising enabled the Company to attract

higher number of customers in new as well as existing stores. Retailers measure entry as

footfalls, which is the number of people entering the stores. This is computed through manual

count in all stores during trading hours.

Conversion Ratio:

Conversion is the ratio of the number of transactions (Cash Memo) versus the total customer

entry into the stores. Tracking conversion helps the retailer understand the productivity of his

front-end store employees and the attractiveness of the Merchandise and services. Consequent to

recent stores being part of malls, the customer entry has increased but the conversion ratio has

dropped. However in absolute numbers customers converted have shown growth in 2 years.


2008 P a g e | 12

Sales:

Gross Sales both at chain level and for Like-to-Like stores showed an improvement as compared

to last year. The growth was 34% in gross retail turnover. The sales per sq.ft. have been

computed on built-up area.

Apparel:

The Apparel contribution to total sales of the company was 58.6% in 2007-08 as compared to

58.9% in 2006-07. There has been growth in Non-Apparel segment which has resulted in Non-

Apparel sales percentage growing. This is primarily due to customer buying life style products.

Non-Apparel:

This category includes Cosmetics, Personal Accessories, Jewellery, Leather goods, Home Wares,

Electronics, Books and Music. These lifestyle products have high aspiration value, and as the

consuming class increases, there will be a big surge in the demand for this category. The Non-

Apparel contribution to total sales of the Company was 41.40% in 2007-08.


2008 P a g e | 13

Private Label & Private Brands:

The Company aims to provide a differentiated and unique offering to the customer through its

own private labels as well as through exclusive private brands. The contribution of private label

has decreased to 20.1% of sales from 20.6% last year and private label sales have increased by

28%. The exclusive licensing arrangement with Austin Reed UK to retail men‟s & women‟s

wear has posted a healthy growth. As a part of its strategy to provide a wide range of

merchandise to customers, the Company aims to fill in the gaps in the national brand offering

through its private labels & exclusive arrangements with private & international brands.

Average Selling Price (ASP):

Average Selling Price is the Gross Retail Sales divided by the number of units sold. Tracking

ASP helps the retailer to align the offering as per the customer segment as well as improve the

productivity of the floor space.

Transaction Size (Rs.):

Transaction size represents the amount spent by each customer on his buying. This is computed

by the total sales divided by the number of cash memos.


2008 P a g e | 14

Merchandise Purchase:

The company‟s ability to present on the shelves correct merchandise assortments in the right

mix, style, colour & fashion is one of its most critical success factors. A team of Buyers &

Merchandisers continuously ensure that the pricing strategy and value proposition are completely

in tune with the customers‟ expectations. They regularly monitor sales trends to optimize

inventory levels. Our well established systems and processes in Buying & Merchandising &

Logistics enables the company to efficiently manage the flow of inventory to stores, provide

prompt replenishments and manage pricing. The company believes in a broad distribution of risk

with no high dependency on any single supplier and has a diversified supplier base. Suppliers are

selected after evaluation based on fairly stringent parameters which ensure the quality &

reliability of supply. Alternate distribution channels for inventory have also been put in place as

a contingency, should the need arise.

Supplier Risks:

Shoppers Stop broadly varied offering necessitates alliances with a large number of suppliers

from various business sectors. In order to mitigate the risk involved, Shoppers Stop enters into

arrangements with vendors in various business formats such as Outrights Buy/Sale or return,

Consignment & Concessionaire/Conducting arrangement.

Shrinkage:

Shrinkage in the retail business is defined as the loss in inventory through a combination of shop

lifting, pilferage, and errors in documentation transaction processing that go unnoticed. They

have focus on inventory control and have set up a separate department called profit

enhancement, which not only monitors Shrinkage on a regular basis but also looks at various

factors that could lead to Shrinkage at stores and distribution centers. The Profit enhancement

department, Store Operations along with the Supply Chain team have worked together and

monitored the Shrinkage level on a month on month basis which has resulted in the Shrinkage

percentage being controlled at 0.47% of the Turnover and the company‟s endeavour will always

be to lower this ratio through proper monitoring and continuously reviewing Inventory

management processes and systems.


2008 P a g e | 15

Loyalty program:

The Company has pioneered India‟s first retail loyalty program - “First Citizens”. The First

Citizens base grew from 781,000 to 10,13,000 over customers in this year. During the current

year, the First Citizens contributed 65% of the Company‟s annual sales. The First Citizen

program has 3 tiers - Classic Moments (entry level), Silver Edge and Golden Glow. Members

fall into the various tiers on the basis of their spends with the company.

First Citizens also earn differential reward basis on their current tier of membership. First

Citizens receive:

• Reward points on all their spends. Reward points can be redeemed for a wide variety of

merchandise at Shoppers Stop.

• Exclusive schemes, benefits and promotions.

• Extended and exclusive shopping hours - specially during the festive season. Special previews

before the sale periods.

• Invitations to exclusive events - both in-store as well as those organized outside the stores.

• Home delivery of altered merchandise.

• Exclusive First Citizens lounge at select stores to relax after hectic shopping.

First Citizens always stay updated with all details pertaining to their membership as well as the

best of offers and privileges available, through a unique service launched last year - First

Citizens First Through this service First Citizens get all the information that they want on their

mobile phones simply by sending an SMS.

In the coming year your Company proposes to announce some ground breaking programs for it‟s

First Citizens which will not only enhance front end sales but will also strengthen customer

loyalty for the company.


2008 P a g e | 16

5

FINANCIAL ANALYSIS

The Company has opened five department stores i.e one at Noida, one at Kolkata and three at

New Delhi during the year, taking its chain of department stores to 27 stores spread across India.

The revenue has touched Rs. 11,602 million (previous year Rs.8,741 million), registering a

growth of 33% on y-o-y basis, whereas cash profit stood at Rs. 538 million and net profit at

Rs. 70 million against Rs. 743 million and Rs. 262 million respectively last year.


2008 P a g e | 17

6

PRODUCT MIX & PRICE POINTS of SHOPPERS STOP

Product Range Price Point

Women’s apparel:

Shirts: formal 449-1395

casual 349-995

Bottomwear: formal trousers 549-1899

casual bottomwear 349-1299

jeans 599-2599

Mix n match: kurtas 419-1399

churidars,salwars n dupattas 1199

Coordinated sets:

(includes salwar kameez, churidar kameez and patiyala

kameez )

799-2999

Ready to stitch materials 799-2999

Skirts 399-999

Dresses 699-799

Knits (includes tops, dresses, n t-shirts) 399-599

Lingeries 250-700

Nigtwear 499-2099

Women’s accessories:

Hand bags 499-3845

Fashion jwellery:

sets

1390-4970

earrings 125-470

chains and necklaces

Fragrances

395-3990

375-4100

watches 1395-18000

sunglasses 895-5990

Writing instruments 50-1599

crystals 99-599

socks 99-299

Men’s apparel:

Shirts: formal 399-2299

casual 375-1299

partywear 399-2990

semiformal 375-1599


2008 P a g e | 18

Trousesrs: formal 599-2895

semiformal 575-1899

Casual pants 499-1399

Jeans 799-3299

T- shirts and polos 399-1499

Kurta pyjamas and stoles 475-1299

Ties 299-1199

innerwear 99-599

seasonal 99-399

Men’s accessories:

Wallets

Watches

belts

364-1599

599-7995

499-999


2008 P a g e | 19

7

HUMAN RESOURCE

The Indian retail industry is growing by leaps and bounds and is poised for an unprecedented

growth. The Company is gearing up to the ride the growth wave and believe that our people will

fuel this exponential growth in the future. Shoppers Stop continue to increasingly focus on

internal growth and development of our associates, cutting across levels and functions, through

focused developmental efforts and growth opportunities.

For the year under review, the HR dept. has provided 66 hours of training per associate and 320

hours of international training. The company has been able to employ innovative strategies to

attract talent from other industries as well as from renowned educational institutions. 104

associates have participated in the Company‟s growth through ESOPs.

The Company has a well-established system of competency mapping and assessment centre

deployment that ensures a fair and transparent vehicle for providing growth opportunities to its

associates. In the last financial year, 35 assessment centre were conducted covering 360

associates across various levels.

The company have been able to successfully deploy initiatives to enhance associate satisfaction

levels, which are reflected in the increase in the Associate Satisfaction scores for the fourth

consecutive year in a row. ASI or Associate Satisfaction Index computed through an annual

online survey for all the associates, tracks the satisfaction levels of associates on various work

experience, identifies the current drivers of employee loyalty, tracks improvement over last year

and identifies the current key strengths and weaknesses to take necessary action.


2008 P a g e | 20

8

EXPANSION PLAN

Geographical reach: The company continues to increase its Pan-India footprint. The

Company has plans to increase the number of departmental stores to 41 in the next 3

years. In addition the company will also continue to expand its various other formats.

Hypercity – An entry into mixed retail: the Company has entered the hypermarket

segment, which is a high growth segment by acquiring a 19% stake in Hypercity. The

company believe that the scope for hypermarkets in India is immense. The store run by

Hypercity has shown very impressive performance in the year gone by.

Format diversification: Shoppers Stop, in it‟s constant endeavor to capture wallet share,

has diversified into multiple formats viz. HomeStop which retails hard and soft

furnishings, Crossword for books, music and stationery, airport retailing by tying up with

The Nuance Group AG of Switzerland, and F&B formats comprising Brio and Desi Cafe,

and Arcelia, which retails high end non apparel and accessories for ladies.

Preferred partner for foreign players: the Company believes that by virtue of it‟s

presence across all lifestyle categories in the departmental format, it‟s strong brand value

and it‟s presence in the books and music segment, it is best placed to bring in

international brands into the country, there by enriching the product bouquet for it‟s

customers and in turn increasing opportunities for product diversification and profit

enhancement.


2008 P a g e | 21

9

STRATEGIC ALLIANCE

Shopper‟s Stop Ltd. has entered into a non exclusive retail agreement with world-

renowned cosmetics major Estee Lauder to open M.A.C Cosmetics stores in India.

Shopper‟s Stop Ltd. has a 19% stake in Hypercity Retail (India) Ltd.

Mothercare PLC of UK, the largest specialist retailerfor infant and toddler care, is now in

India.

Shopper‟s Stop Ltd.‟s entry into airport retailing is marked by a joint venture with The

Nuance Group AG of Switzerland, the world‟s leading airport retailer.

Shopper‟s Stop Ltd has forayed into the Entertainment sector by acquiring a 45% stake in

Timezone Entertainment Private Limited which is in the business of setting up &

operating Family Entertainment Centers (FECs). It has 5 outlets in Ahmedabad,

Hyderabad, Kolkata and Mumbai.


2008 P a g e | 22

10

PROMOTION

Shoppers Stop Ltd.believe that shopping today is not confined to need. It is a new

form of entertainment, to fulfill new aspirations and to bring out the new self.

Shoppers Stop revealed its new logo in all fanfare with Mr. Shah Rukh Khan as the

guest of honour. Upon revealing the new look, Shoppers Stop also announced the

new cause of Think Green that it has taken up.

The first initiative under the Think Green campaign is the cause of the Neem

Tree. The exclusive brand „Life‟ merchandise is now sold with sachets of Neem

seeds to help create awareness and encourage customers to support the cause.

Shoppers Stop print advertising campaign, though tongue in cheek, also

highlights environmental concerns. Shoppers Stop has been running a TV

campaign which communicates the brands new baseline „Start Something New‟.

Another exciting feature is the new limited edition of Shoppers Stop

shopping bags. The first in the series are shopping bags depicting

„Fashion through Ages‟ like the Audrey Hepburn – Breakfast at

Tiffany‟s look and The John Travolta Saturday Night Fever look.

The company has introduced Shoppers Stop Radio, the first of its kind

retail radio format in the country. The Shoppers Stop Radio has two

dedicated RJs (Radio Jockeys) who entertain customers while they

shop. The radio plays all genres of music and also provides important

information to customers related to shopping.