A Shoppers Stop showroom in Chennai. — Bijoy Ghosh

Sravanthi Challapalli

Chennai, May 28 Shoppers Stop, which had undergone a makeover in April 2008 to connect better with younger customers, says the exercise has worked for it.

Speaking to Business Line, Mr Govind Shrikhande, Customer Care Associate and CEO of Shoppers Stop, said customer satisfaction studies showed that the satisfaction index had jumped 25-30 per cent since late 2007.

The Customer Satisfaction Index score climbed to 81 in February 2009 from 63 in November 2007. The survey, he said, was carried out by Customer Satisfaction Management & Measurement, an independent, specialist unit of IMRB International.

As the store has tried to reposition itself as a premium destination, like-to-like sales of luxury brands such as Tommy Hilfiger, Calvin Klein, FCUK, Nautica, Esprit, Lancome, Chanel and Max have jumped 40 per cent. However, like-to-like sales at Shoppers Stop stores overall dropped 3 per cent in the fourth quarter of 2008-09 but grew one per cent in the fiscal.

A larger number of younger customers (25-35) have been enrolling in First Citizens’ Club, the store’s loyalty programme, Mr Shrikhande said. Earlier, 80 per cent of the members were 35 and older, but now, that ratio has shifted to 70-30 between older and younger customers, he said.

Around 12.77 lakh customers, who are part of the store’s loyalty programme, contributed to 72 per cent of the sales in 2008-09.

The contribution to the turnover of categories primarily targeted at youth – sportswear, denims, youth and fashion brand – had grown by 15-18 per cent, Mr Shrikhande said.

He also made the point that the difference between the two categories was not really that big as older customers want to look younger than ever, though he did say that some of the foreign brands in apparel and cosmetics could be better afforded by the older age group.

Shoppers Stop Ltd, the larger corporate entity, made a net loss of Rs 57 crore on a turnover of Rs 1,382 crore. Shoppers Stop Ltd includes the departmental store business, Home Stop, Crossword, Mothercare, MAC, Clinique and Estee Lauder, Arcelia, Airport Retail Domestic, F& B, and e-commerce ventures.

Shoppers Stop, which has 27 outlets across the country now, expects to open four stores every year for the next three years. Its earlier plan was to open 5-7 stores but with the slowdown affecting malls’ expansion, it has had to revise its plans.

Currently, it has sufficient funds internally to finance this level of expansion but may take a call on going in for a rights issue by September, depending on the market conditions, Mr Shrikhande said.

This year, Shoppers Stop opened one outlet this month in Hyderabad, its second outlet in the city; from September to October, three more will open in Hyderabad, Bangalore and Ahmedabad. In the next two years, it will set up its first outlets in Amritsar, Coimbatore, Jalandhar, Ludhiana and Vijayawada, and expand further in Bangalore and Gurgaon.

Mr Shrikhande said the current economic situation has definitely led to “more realistic expectations of rentals” and that his company had definitely got better deals be it rent reduction or revenue-sharing arrangements. On old properties, however, more revision is hoped for.

The company has rolled out an e-commerce facility over the last 5-6 months but it will take a while to take off, he said, as touch and feel were important for categories such as apparel and cosmetics.

However, the company has exited the catalogue business and the café business as their performance was not in tune with expectations. The cafés will now be managed by Café Coffee Day.

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