Shoppers Stop, the country’s oldest department store chain, saw its stock price tank over 12% on Friday on the Bombay Stock Exchange, after news emerged of the resignation of MD & CEO Venu Nair from the company. While the retailer has elevated Homestop head Kavindra Mishra as its new MD & CEO, effective September 1, Shoppers Stop has seen three heads in five years. This includes Rajiv Suri (June 2018-July 2020), Nair (Nov 2020-Aug 2023) and now Mishra, who has been appointed for three years only.
Shoppers Stop offered no reason for Nair’s exit, saying he was moving on for personal reasons. BS Nagesh, chairman, Shoppers Stop, said that Mishra, who has over 24 years behind him in the domestic retail industry, was an “excellent fit” for leading the company. “In the last five months, he has taken over the charge of Homestop and the commercial part of the Shoppers Stop business,” Nagesh said.
“Brands are finding it unfeasible to supply at 40-45% margins on consignment to department stores,” says Jaydeep Shetty, a Mumbai-based retail expert and consultant.
“Also, malls have become conservative about signing up department stores as their tenants because consumers are preferring single-brand showrooms instead where the shopping experience is different from a multi-brand showroom. All of this is putting pressure on the department store model,” Shetty says.
Nair was in the midst of revamping operations at Shoppers Stop including bringing the focus on value retail and giving a boost to its beauty retail operations. Under Nair, Shoppers Stop had forayed into value retail with ‘Intune’, taking on larger players such as Trent’s Zudio and Landmark group-owned Max Fashion in June. It was also billed as a bold bet for a retailer such as Shoppers Stop, which has traditionally positioned itself as a premium retailer of brands.
The move had also prompted the country’s largest organised retailer Reliance Retail to step into the value retail segment with Yousta, which was announced on Thursday. Like Intune, Yousta began its operations in Hyderabad, with plans to expand across the country. Intune has three stores – two in Hyderabad and one in Dombivli, near Mumbai, with plans to add another three more outlets in the coming months.
Nair had admitted on a recent earnings call that the apparel segment in general was witnessing moderation and that the value retail foray by Shoppers Stop could help the company tap into the growing trend for affordable fashion and lifestyle products, aiding sales growth.
That was an important statement for Shoppers Stop, which reported a nearly 37% year-on-year drop in net profit to Rs 14.5 crore in the June quarter of FY24, even as revenue grew only 4.8% versus the previous year to nearly Rs 994 crore.
On a yearly basis, the company had last reported a net profit of nearly Rs 114 crore in FY23 after three consecutive years of loss between FY20 and FY22 due to the Covid-19 pandemic. FY23 topline also jumped nearly 60% year-on-year to Rs 4,022 crore, the highest in six years, its results showed.