Home Stop looks to break even by the end of this fiscal

Shopper’s Stop is trying to turn around Home Stop, its home solutions retail business

Shopper’s Stop is working on its subsidiary brand Home Stop to turn it around by the end of this financial year. Home Stop has been operational since the past three years.

“We are focusing on Home Stop and we believe that it will turn around by the end of this year. It should break even by the end of this financial year as the real-estate market is slowly reviving,” said Govind Shrikhande, president and chief executive officer, Shopper’s Stop.

He also added, “The home retail segment is one of the toughest categories for a retailer. You need to take care of the timing of entering this segment, examine the situation and judge the market. It is difficult to earn healthy margins from this segment as taxes, transportation and delivery costs are very high.”

Because the real-estate market was in the doldrums for the past 18 months, very few consumers were buying new homes. This directly impacted furniture sales in the home retail market. “Consumers expected a further fall in prices. So we reported subdued sales in the furniture segment over the past few months. But now, at the current rates, a few deals have started happening. We expect our sales also to pick up,” Mr Shrikhande told Moneylife.

He also pointed out that kitchen goods contribute more than 50% of the revenue generated from Home Stop.

“Kitchen goods have given us the maximum throughput in the home category. These goods can even be used as gift items for different occasions (irrespective of the fluctuations in the real-estate segment),” said Mr Shrikhande. He also said that earlier, Indians regarded furniture to be a lifetime investment. However, the mindset is gradually changing and furniture is being replaced in five to seven years, said Mr Shrikhande. — Pallabika Ganguly


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    China not India set to dominate gold demand and consumption

    According to the China Youth Daily, the Daiwa Institute of Research has suggested that China's gold reserves should reach 6,000 tonnes in the next 3 to 5 years and perhaps 10,000 tonnes in 8 to 10 years. In September China’s gold output rose 13.4% in the first seven months of this year to 172.867 tonnes, and it produced 26.36 tonnes in July..

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    JSW Energy plans to ramp up capacity

    Power company JSW Energy plans to increase its power capacity up to 11,390MW by 2016. However, officials from the company agree that the risk factor involved in coal imports needs to be addressed

    JSW Energy plans to increase its total power capacity up to 11,390MW by 2016, from its current operational capacity of 995MW. While the fuel requirement would be met by a mix of domestic coal sources and imported coal, officials agree that important issues need to be addressed for ensuring uninterrupted coal supply.

    “Domestic coal has its own challenge. If we want to ramp up capacity, there are issues. We have tried to enter this space very differently with a mix of domestic coal and imported coal. We have around three to five years to explore various sources for coal allocation. A lot of capacity is coming in, but we have to keep an eye on the challenges which we will face in procuring domestic coal. The reason for this is that we are not seeing a huge amount of coal capacity actually coming on stream,” said Pramod Menon, chief financial officer, JSW Energy Ltd.

     “We believe it is ideal to have a (supply) mix of domestic and imported coal. We have most of our projects dependent on imported coal located near ports, so we have the infrastructure in place,” added Mr Menon.

    Currently, JSW Energy imports coal from Indonesia and Mozambique. It owns two coal blocks in Mozambique. Coal sourced from this country will fuel JSW’s power plants dependent on this source in about three to four years.
    On being questioned whether a single source like Indonesia would be able to produce and supply the huge amount of coal that will be required for future power projects, Mr Menon said, “We need to de-risk the dependence on a single source by working out arrangements with multiple parties. Over time, you will find us addressing these risks.”
    Moneylife had earlier reported on how modifications in Indonesia’s mining policies could affect Indian coal imports. India is one of the major importers of coal from Indonesia. “Indonesia does not have the facility to export the amount of coal that India is expecting,” an analyst had told Moneylife. Indonesia plans to cap its annual coal exports at 150 million tonnes, post-2010.

    Out of JSW’s total planned capacity of 11,390MW, 240MW would be generated by hydro power; the balance will be met by thermal power. Financial closure for 3,140MW of the planned capacity expansion has already been completed, said the company.

    The investment for the expected capacity expansion would carry a 3:1 debt-equity ratio. The company has also finalised 100% of its fuel requirement needs for 3140MW of its planned capacity expansion. For its projects under development, JSW said that it has tied up 60% of its fuel requirements.

    As per company officials, to achieve a robust GDP growth, India requires a growth of 8% to 10% in the power sector. To fuel this growth, total power capacity in the country has to increase by 20,000 MW every year.

    JSW plans to open its Initial Public Offering (IPO) on 7th December. The issue will close on 9th December. The company is targeting an equity mop-up of Rs2,700 crore through this IPO.
    — Amritha Pillay

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