IndiaRetailBiz

Shoppers Stop, India’s pioneering and leading listed retailer, has taken several measures, including restructuring of top organisation and cut in salaries of top honchos, to conserve cost and improve profitability.

The retailer has already reported nominal profit of Rs 7.63 crore (before interest and tax) during the first quared of this financial year compared to loss of Rs 20.25 crore during the same period last year.

The multi-format, multi-products retailer has not replaced 300-odd front-end associates (shop floor assistants) who chose to leave the company in the past few months. This has resulted 24 per cent saving in consolidated employee costs during the last quarter ending June, 2009. The employee costs have now been brought down to Rs 18.43 crore. (source).

In another development, some 150 top employees of the organisation have agreed to take 15 per cent cut in their salaries.

B S Nagesh, the new vice chairman of K Raheja promoted company, who is looking at making the operations more lean and efficient, has dismantled the dual structure corporate layers in the organisation.

“We have operated a two-dip structure with a back-up available for the top management up to four levels as part of our exercise of identifying and groom talent. We also had a corporate layer of heads above the respective vertical’s CEOs whose focus was to drive synergies across our formats even as we were driving top line growth. We have now dismantled this dual structure corporate layer,” said Nagesh.

“We have eliminated the position of business head in charge of property acquisition as we found that most developers wanted to deal directly with the managing director or the Rahejas when it came to agreeing deals,” said Nagesh.

The retailer, according to an equity research report, is also cutting down on office space and corporate office expenses. While, the office space has been reduced by 20 per cent, the corporate expenses are being reduced by 40 per cent.

HyperCity Retail, the hypermarket format arm of the Raheja group, is also head hunting to find replacement for ex-CEO Andrew Levermore– an expat from South Africa– who left the company a few months ago after serving for two terms company.

In a recent major restructuring of the organisation, Govind Shrikhande became operational head when he took over the charge of Chief Executive Officer (CEO) of the company from B S Nagesh. B S Nagesh moved up to become Vice Chairman of the company– non-executive position. The changes became effective, about a fortnight ago, from the 18th August, 2009.