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Retail troika celebrate sizzling quarter

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Retail troika celebrate sizzling quarter

The retail juggernaut keeps rolling! The top three retail chains (Pantaloon Retail, Shopper's Stop and Trent posted net sales growth of 58%, 36% and 42%, respectively for quarter ended June, over the corresponding quarter of the previous year. The growth is primarily driven by expansion into new markets, such as Gujarat and South India.

Pantaloon Retail is estimated to have clocked a turnover of about Rs 553 crore for the quarter, with more than 70% of revenues coming from the value retailing segment. While the value retailing segment (comprising largely of Big Bazaar and Food Bazaar chain of outlets) grew at 73% , the lifestyle segment with its Pantaloon Lifestyle stores reported a topline growth of 29%.

Pantaloon has not reported its June quarter results so far and these figures are based on the company's investor updates for the value retailing and lifestyle segments, which account for the bulk of company's revenues. Addition of new outlets accounted for 42% of growth over last year's figure, while same store growth stood at 18%.

Interestingly, the contribution of new stores under the value retailing segment in geographies like Gujarat, South India and UP over the last year, almost matched up with the revenue contribution from the lifestyle segment during the same period.

Shopper's Stop clocked net sales of Rs 160 crore for Q1 FY07, and backed it up by a 96% jump in net profits. The base of repeat customers (First Citizen Club) accounted for 63% of the sales. The same store growth rate was better for Shopper's Stop at 24% backed by a 17% hike in customer entry.

This increase in same store sales was achieved by a 11% hike in average selling prices and 12% rise in the average transaction size per customer. Private label sales went up by 41% since last year, improving the operating margin by one percentage point.

Shopper Stop's speciality stores like Home Stop and Mother Care aggregated a combined turnover of Rs 7 crore, while Hypercity generated an annual run rate of Rs 125 crore in its first month of operations. Trent, with its chain of Westside, Star India Bazaar and Landmark stores, clocked highest-ever net sales of Rs 105 crore for the quarter.

But, operating margins came under pressure with increase of 60% and 50% in employee costs and 'selling and admin' expenses, respectively. The growth in operating margin was just 9%, while income from investments of unutilised proceeds of the rights issue helped in managing a better PAT growth of 26%.

Provogue reported a growth of 20% and 32% in net sales and profits, respectively. A product portfolio dominated by its own brands aided it to report an operating margin of 15%. Piramyd Retail clocked net sales of Rs 30 crore for the quarter, but it's yet to break even at the operating level.


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