Shoppers Stop looks to exit JV with Nuance Group

Shoppers Stop, the fashion and lifestyle retail major, is looking for an immediate exit from its joint venture (JV) with Switzerland-based Nuance Group for duty-free airport stores.

The JV was formed in 2006 with ~103.5 crore paidup capital, and has stores in Mumbai and Bengaluru airports. Shoppers Stop which previously had a 50 per cent stake in the JV till March 31, 2017, had reduced it to 40 per cent.

“We are on the lookout to exit this business as soon as possible and, hopefully, in the coming quarter will be able to do so”, Govind Shrikhande, managing director, Shoppers Stop, told Business Standard.

Although Shrikhande refused to provide further details when asked about the financial performance of the venture, the company’s annual report states that it had incurred a ~6.8-crore loss from this business, despite the topline increasing by 19 per cent to touch ~157.76 crore. According to the company, the rise in sales is primarily attributed to the growth in passengers footfall in the stores as well as increase in the range of perfumery, fashion and food categories. On the other hand, total assets of Shoppers Stop in this project, as on March 31, 2017, had also declined by nearly 16 per cent at ~92.5 crore. Asked about the reasons of the company’s decision to sell off its stakes in the joint venture, Shrikhande said, “Sometimes they (business models) work and, at times, they don’t”.

At the end of the last fiscal year, Shoppers Stop had made a provision of ~11.80 crore towards diminution in value of investment in Nuance.