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

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

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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.

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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.

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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.

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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.

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2 EVOLUTION

YEAR

EVENTS

1991

The first store opened at Andheri, a suburb in Mumbai selling only Menswear Ladies wear was introduced Added Children & non apparels Loyalty Program titled First Citizen was launched. Opened second store in Bangalore Launched co-branded credit card for our loyalty members in association with HSBC. Opened third store in Hyderabad Implemented JDA Retail ERP (a global leader in retail ERP packages). Opened our fourth & fifth store in Jaipur & Delhi Opened sixth & seventh store at Chennai & Chembur – Mumbai. Acquired Crossword – India 's leading retail book chain Opened eight & ninth store in Pune & Bandra Opened the tenth store in Kandivli – Mumbai Opened the eleventh, twelfth & thirteenth store in Mulund – Mumbai, Gurgaon & Kolkata Opened fourteen, fifteen & sixteenth store in Malad – Mumbai, Kolkata & Bangalore Opened seventeen, eighteen, nineteen & twentieth store in Pune, Juhu – Mumbai, Bangalore & Ghaziabad . Launched M.A.C & Homestop – our home store. 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 . 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.

1992 1993 1994 1995 1997 1998 1999 2000 2001 2002 2003 2004 2005

2006

2007

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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.

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3.2 Number of Stores Sr 1 2 3 4 5 6 7 8 9 10 11 12

Formats Shoppers Stop HomeStop. Crossword Mothercare Hypercity Hypercity Argos Brio Desicafe M.A.C Arcelia Nuance Timezone

No. of Stores 24 03 48 19 01 05 20 03 04 02 02 05

No. of cities 12 03 14 08 01 01 03 03 02 02 04

Remark

10 shop-in-shop Catalogue stores

Airport retailing

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.

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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

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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.

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

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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.

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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.

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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.

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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.

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6 PRODUCT MIX & PRICE POINTS of SHOPPERS STOP

Product Range

Price Point

Women’s apparel: Shirts: formal casual Bottomwear: formal trousers casual bottomwear jeans Mix n match: kurtas churidars,salwars n dupattas Coordinated sets: (includes salwar kameez, churidar kameez and patiyala kameez ) Ready to stitch materials Skirts Dresses Knits (includes tops, dresses, n t-shirts) Lingeries Nigtwear

449-1395 349-995 549-1899 349-1299 599-2599 419-1399 1199

799-2999 799-2999 399-999 699-799 399-599 250-700 499-2099

Women’s accessories: Hand bags

499-3845

Fashion jwellery: sets earrings chains and necklaces Fragrances watches sunglasses Writing instruments crystals socks

1390-4970 125-470 395-3990 375-4100 1395-18000 895-5990 50-1599 99-599 99-299

Men’s apparel: Shirts: formal casual partywear semiformal

399-2299 375-1299 399-2990 375-1599

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Trousesrs: formal semiformal Casual pants Jeans T- shirts and polos Kurta pyjamas and stoles Ties innerwear seasonal

599-2895 575-1899 499-1399 799-3299 399-1499 475-1299 299-1199 99-599 99-399

Men’s accessories: Wallets Watches belts

364-1599 599-7995 499-999

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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.

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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.

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9 STRATEGIC ALLIANCE 

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

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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.

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