Shopper’s Stop Ltd plans to raise Rs300 crore within the next two quarters from institutional investors to fund 18 new stores and to increase its stake in HyperCity Retail (India) Ltd from the current 19%, said customer care associate and vice-chairman B.S. Nagesh.
The new stores will add to the 30 outlets that the company already has across India, while HyperCity will open four new outlets to take its tally to 11 by March 2011. Nagesh added the company’s board will meet on 30 June to buy additional 32% stake in HyperCity at Rs125 crore, taking its share to 51% in a move approved in April. He also said that HyperCity will have 35 stores by 2015. A typical HyperCity store is 100,000 sq. ft large. The new stores may be only around 55,000 sq. ft. The Shopper’s Stop board has approved an issue of 4 million shares to institutional investors, but the exact number of shares to be issued is yet to be determined. Govind Shrikhande, customer care associate, president and chief executive of Shopper’s Stop, met investors in New York and London this month. He said the qualified institutional placement could happen within the next two months. On Tuesday, shares of Shopper’s Stop rose 0.89% to close at Rs477.55 on the Bombay Stock Exchange, while the Sensex lost 0.71% to close at 17,749.69 points. Since 25 May, the stock has risen by 27%. But Shrikhande said he is waiting for the market to stabilize before fixing a valuation price for the share offer. “Rs550-600 a share would be an appropriate valuation for the sale.” The optimism also follows a strong recovery in the retail sector. “Same store sales in the April-June quarter are higher by 20% from a year ago,” said Shrikhande. Pinakiranjan Mishra, partner and national leader, retail and consumer product practice, at audit and consulting firm *Ernst and Young*, said he expects same-store sales for most apparel retailers to grow by 10% in the June quarter. “The consumer sentiments are positive as new launches like Hamleys (a UK-based toy departmental store) and Zara (a Spanish apparel brand) have been received well by consumers.” The two-decade-old retail chain will also renovate its existing stores, said Nagesh. “Renovations give better returns on capital employed of more than 20% over a five-year period as compared to launching a new store.” -- Regards Hardik Shah -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
