Shoppers Stop shares jumps 6% to Rs 254.5 apiece on BSE
The Economic Times
On Wednesday, shares of Shoppers Stop surged 5.6 per cent to Rs 254.5 apiece on the BSE in the intra-day trade after the company sold its wholly-owned subsidiary Crossword Bookstores as a strategy to exit “non-core” businesses.
“The company has closed the sale of a controlling stake of its 100 per cent subsidiary, Crossword Bookstores Limited Dinesh Gupta, Aakash Gupta and Family (owners of Agarwal Business House), Pune, according to the share purchase agreement between Shoppers Stop and ABH signed on August 31, 2021. The business of Crossword Bookstores has valued at Rs 41.6 crore,” the retail chain store said in an exchange filing.
At 10:04 AM, the stock was quoting at Rs 247 apiece, up 2.7 per cent on the BSE. In comparison, the benchmark S&P BSE Sensex was at 57,913 levels, up 0.6 per cent. At the meeting of the company held on Tuesday, August 31, the board approved the transaction. Subject to receipt of necessary consents, Shoppers Stop shall divest a 51 per cent stake (expected to be completed within 15 days) and another 39 per cent in the next 12 months.
“This represents another step in our progress to elevate Shoppers Stop to a customer-focused, Omnichannel retailer, to enable us to deliver on the promises we make to our customers and shareholders. Most importantly, we are selling Crossword Bookstores to our franchisee ABH, who has been in this business for more than two decades and is extremely passionate about the book business,” said Venu Nair, Managing Director and chief executive officer of Shoppers Stop in a statement.
During the June quarter of FY22, Shoppers Stop had posted 272.9 per cent revenue growth at Rs 201.0 crore, against revenue of Rs 53.9 crore in the corresponding quarter of the prior fiscal. The stores operated merely for 28 per cent of days in Q1, which impacted the sales and profits, according to the company. Effectively, its earnings before interest, tax, depreciation, and amortisation (Ebitda) for Q1 declined to Rs 1.3 crore (from Rs 1.6 crore). However, loss for the period was reduced to Rs 104.9 crore from Rs 120.2 crore YoY.