Losses At HyperCity Bears On Shoppers Stop’s Fourth Quarter Earnings
The retail chain had a loss of Rs 36 crore in the fourth quarter.
Shoppers Stop Ltd. registered a loss in the March-ended quarter as it wrote down the value of its supermarket chain subsidiary Hypercity Retail (India) Ltd. in its books of accounts.
The retail chain reported a loss of Rs 36 crore in the fourth quarter of financial year 2016-17, according to its stock exchange filing. Analyst tracked by Bloomberg had expected the company to post a profit.
Shoppers Stop recognised an impairment of a separate Rs 36 crore for reduction in the value of its investment in subsidiary Hypercity Retail (India). "Losses of Hypercity Retail, a subsidiary company, have substantially eroded its net worth", the notes to its financial statement said.
Hypercity is taking steps to revamp its operations, however, the gestation period is taking longer than previously forecast, the notes added.
The company said that no further impairment will be required at this stage.
Shopper Stop's revenue went up 3.1 percent to Rs 910.2 crore over the same quarter last year. Operating income went up 2 percent, while operating margin remained flat at 6.4 percent.
The modern retail chain is now looking to increase its presence in the online space to take on e-commerce players like Flipkart and Amazon India, which has eaten into its market share.
We are very positive about FY18 as we have a slew of exciting actions to bring romance back to retail. We will also see our investments in omni-channel, digitisation of stores and our e-commerce push bear fruit in the coming year.Govind Shrikhande, Customer Care Associate and Managing Director, Shoppers Stop
Shares of Shoppers Stop had closed 0.6 percent higher while the country's benchmark declined.