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B&E
Can Shoppers Stop do it?
Can Shoppers Stop do it? Does Shoppers Stop have it within them to fight the slowdown and one day become India’s answer to
WalMart? angshuman paul investigates...
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 ‘First movers create the market but it’s not necessary that they sustain the first mover’s advantage. You can enter late but simultaneously, you can cash in on the market created by the first movers.’ That’s what Sam Walton, the god of retail, always touted; and his first WalMart store (then named Walton’s 5&10, which he opened in Bentonville in 1950 on borrowed money and savings from a stint in the army), wasn’t even actually USA’s first discount department store. In fact, it wasn’t even his first – Walton had to actually sell off his first store in Newport because of the lease running out. Neither was Walton the pioneer in the industry, nor was he one of the best, but what he surely knew, was that no success is worthwhile if the same is not attached with a world beating vision. From just one store to making Walmart the world’s largest and number one on the Fortune 500 list, there’s surely much to learn from Sam, and vision tops the bill.
Is B.S.Nagesh India’s answer to Sam? In his vision to revolutionise retail
buying, surely yes. In his vision for making Shoppers Stop a world standard, perhaps not. That brings us to the next question. Is Shoppers Stop India’s answer to WalMart? Not yet; and strangely, mostly because of reasons that seem to be beyond their control (or are they?). And that’s where the pain starts; of being Shoppers Stop, of being B.S.Nagesh, of operating in an industry and environment that can only support you this much, of being enmeshed in a vision that is entrapped within not only the limits of the sector’s operations, but also of the vision of the government.
Despite my evident undercurrent of the critic’s clarinet, I accept that Nagesh (and even Shoppers Stop for that matter) is the best that could have happened to India in a century of retailing. Well, at least until the past year (I’ll come to that later). There can be no better logic that justifies this status than the manner in which a single man and a brand jumpstarted the view of India to retail.
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 Think about it... For decades, the only option for a godforsaken departmental store that Indians ever had was the nightmare of a shopping excuse called Super Bazaar! And if you’re one of the teeming wastrel dozens who had their penny-wise romantic interludes in the generation spanning Kendriya Bhandar, none the better. Come 1991, and Nagesh became the Salvador Dali of shopping, romanticising the art for Indians in a way they felt was alien, yet enslavingly addictive. If the ‘91 inaugural Andheri store started in an upstreet Linking Road in Mumbai smoked the intent, the Ansal’s Plaza outlet in New Delhi went the full figurative blast. From one store in 1991 to 36 in 2009 (and 51 CrossWords, 3 HyperCity Marts), Nagesh, and Shoppers Stop, had arrived! But like I said, till the last year.
The numb’ers
For eighteen straight years, Nagesh has intently focused on growing Shoppers Stop’s geographical reach. And the impact has been frivolously brilliant, especially in terms of revenues. Look at just the last five years. From Rs.3,448 million turnover in FY 03-04, Shoppers Stop jumped 27% to Rs.4,411 million in FY 04-05. The next year was brilliantly more fantastic. A super growth of 42% made revenues shoot up to Rs.6,228 million in FY 05-06. With Rs.8,123 million in FY 06-07 (30%) and Rs.10,799 million in FY 07-08 (32%), Nagesh commandingly was traversing the upper crust. But both MD Nagesh and CEO Govind knew the warning signs were already there. With three quarters of this year giving Rs.9,606.6 million turnover, replicating last year’s growth might not be possible at all; though all indications are that they will surely beat last year’s revenue figures.
It’s quite ironical then that the year in which Shoppers Stop has reached the historical high grandstand of its revenues, is the same year that has perchance been the worst for it during the past decade. Even before the start of the year, the last quarter of the previous year had given them Rs.25.6 million loss (net after taxes). If that looked only trite figurative or bookish, the next quarter made its intentions clear. A mammoth Rs.256 million loss. The third quarter of the year ending September 2008 was the movie 300 in action; a bloodbath of Rs.496.7 million loss. Fourth quarter ending December 2008 gave another loss of Rs.32.6 million.
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