Financial Daily from THE HINDU group of publications
Tuesday, May 07, 2002
Financial Daily from THE HINDU group of publications Tuesday, May 07, 2002 |
|
|
|
|
|
Marketing
-
Retailing Crossword looks for strategic investors Purvita Chatterjee
MUMBAI, May 6 THE Rs 28-crore book store chain, Crossword, is looking for strategic investors. Speaking to Business Line, Mr R. Sriram, CEO and Managing Director, Crossword, said, "As we grow and our capital requirements increase, we would be looking at diluting our stake and having more strategic investors picking up a stake in our company.'' Two years ago, Shoppers' Stop picked up a 51 per cent stake in the company buying out IBH's (India Book House) stake. The balance is held by ICICI Ventures. Meanwhile, the nine-year-old book retail chain is planning to set up 25-30 `Crossword Corners' in the next two years across seven cities. These would be smaller stores ranging between 300 and 600 sq.ft. The total investment for each store would be around Rs 12 lakh. This format of stores would comprise a mix of both company-owned and franchise operations just like its existing stores. "Currently we would get funds from our own cash flows but in the future we might look at our investors to enhance our capital base," says Mr Sriram. The total capital employed by the company till date amounts to Rs 20 crore. Adds Mr Sriram, "We would also look at entering the Kolkata and Bangalore markets where we still do not have any presence." Besides the book store chain is also planning to do some cross-selling with Shoppers' Stop. Using their respective database of customers, especially its loyalty card members, the chains are considering approaching each other's customers to generate more sales. Explains Mr Sriram, "We would look at adding value to the customers of Shoppers' Stop and vice versa. For instance, through its database we could be selling books to the children of their members and likewise they could use our list to sell their merchandise.'' Some cross-selling in the area of services is also being planned. Considering Crossword has a free home delivery service for its customers, it could offer the same to customers of Shoppers' Stop to push up sales of its books. Crossword already has a base of 30,000 loyalty card members while Shoppers' Stop has almost 2.1 lakh members registered under its First Citizens Club loyalty programme. Mr Sriram pegs the book retailing industry at Rs 3,000 crore with a growth rate of 10 per cent annually. Claiming to make profits, Crossword gets almost 60 per cent of its sales from its books alone. Besides it also stocks CD-roms, music, stationery and toys. States Mr Sriram, "We are making profits at the store cash levels and our margins vary between 15-30 per cent.'' Crossword expects to register a turnover of Rs 35 crore this year.
Send this article to Friends by E-Mail
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|