IndiaRetailBiz

Pantaloon Retail (India) Ltd, the flagship listed company of kishore Biyani owned Future Group, while posting sales of Rs 3,550.35 crore for the year ended June 30, 2007 (an increase of 75% over the previous year), earned net profit of Rs 119.99 crore (an increase of 87% over the previous year).

Despite, Q4 sales at Rs. 1019 crore being 77% higher (yoy), adjusted net profits at Rs. 6.8 crore were 57% lower (yoy) than the previous year. While the gross profit margin dropped 5.5% due among others to higher raw material costs, the operating margin fell to 5.6% (a loss of 0.9% over the previous year). Though, share prices of the company declined only by 2.5%, the performance was nothing short of disastrous. The decline in the share prices was stemmed on account of the company’s decision to unlock the value of its subsidiaries through IPO and private placement.

While the growth in sales was driven by addition of new space through new stores (rather than increase in sales from same stores), margins declined sharply due to shift in product mix from lucrative ‘lifestyle’ segment to less profitable ‘value’ segment. Increased spending in promotions including higher discounts to customers also resulted in erosion of margins.

The company’s Board while taking results for the year on record has recommended a dividend of Rs. 0.50 per share (25%) and has approved the raising of up to Rs 2,000 crore through an IPO and private placement for its subsidiary Future Ventures India Ltd.

Pantaloon Retail is currently present in 42 cities across the country and operates in entire consumption space through multiple retail formats both in “value” and “lifestyle” segments. Among the major retail formats, it has 68 Big Bazaar hypermarkets and 100 Food Bazaars in the “value” segment, while 31 Pantaloons stores and four “central” malls in the ‘lifestyle’ segment. Among the major product categories offered are apparel, accessories, footwear, health and beauty, food, grocery, durables, home improvement, books, gifts, and music, telecom, travel and consumer finance.

For the last quarter (Q4) ending 30th June, 2007, Pantaloons added 31 stores and 0.7 million sq.ft. Adding 4.5 million sq.ft. of space up to third quarter, the overall space occupied was 5.2 million sq.ft.

With the annual turnover at Rs. 3,550 crore, together with 5.2 million sq.ft. of retail space (as at end of June, 2007), Pantaloon continues to occupy highest position among modern retailers of the country.