Shoppers Stop to leave airport retail business and clean up balance sheet

By

Isabelle Crossley

Published
Oct 11, 2017

The multi-brand fashion retailer Shoppers Stop has now left the duty free airport retail business after disposing of its 40 percent stake in Nuance Group India and will also work to clean up its balance sheet.

Nuance Group India Private Limited was founded as a joint venture between the fashion business Shoppers Stop and Nuance Group AG Switzerland with an equal split of shares. Shoppers Stop has now divested themselves of 40 percent of the company’s shares, which they sold to Nuance Group AG Switzerland at a consideration of 6 crore rupees (approximately 0.9 million dollars). This amount was the remainder of the shares Shoppers Stop had in the company after reducing their shares to 40 percent in April this year. What this means is that Shoppers Stop will now exit the duty free outlet they held at Bengaluru International Airport.

This is part of Shoppers Stop’s plan to clean up its debts and along with exiting the airport duty free retail business, the company also sold HyperCity to Future Retail Limited on Monday. Shoppers Stop sold five percent of their shares to Amazon’s investment arm in September. This slew of equity selling is intended to reduce the company’s debt.

Govind Shrikhande, the Managing Director of Shoppers Stop, said about the company’s debt reduction plans: “We wanted to ensure that we clean up the balance sheet, the P&L [profit and loss] and the return numbers. Currently, we are at 81 stores and at about 5.5- 5.6% Ebitda [earnings before interest, taxes, depreciation, and amortisation]. The whole idea is to take that 81 to 100, take the Ebitda to more than 8% and to take our online sales share from 1% to 10% over the next three years.” The plan is for the business’ standalone debt to be reduces from 492 crore rupees (approximately 74 million dollars) to 200 crore rupees (approximately 30 million dollars), more than halving it.