Loot India Ltd is looking to either shut down non-performing stores or taking them over from franchisees.
Loot India Ltd, which runs The Loot chain of multi-brand discount-format stores, is looking to either shut down non-performing stores or taking them over from franchisees.
Jay Gupta, managing director, said the retailer recently took over 5 stores from franchisees when it found them unviable and then turned them around. “After we took over the stores, they are showing better results. It is actually the mismatch created by the franchisee or their lack of contribution. We may shut down 2-3 unviable stores, but this is not due to lack of footfalls,” Gupta said.
Of its 98 stores, 65 are run by franchisees. “Of them, 50% are doing very well, 20% are average performers while 25% are below average. We plan to correct 5% of these 25%,” Gupta said.
Loot India has also drawn up certain criteria for choosing its franchisees for future stores. “We now have a ‘don’t franchise with a certain type of people list’,” Gupta said. The company plans to open 100 more stores this fiscal. In 2008, it had announced investments of Rs 100 crore for expansion over the next 3 years.
Loot India is close to taking a decision on a private equity partner for the expansion. “In the last 3-4 months, we received 8 proposals. We will finalise the partner soon. Pre-IPO (initial public offering), we will we will offer a maximum of 25% stake to PE players,” he said. Gupta said the company expects to launch an IPO in the next 9 months to a year.
Loot India reached a turnover of Rs 70 crore in FY09 from Rs 50 crore in FY08. “We should be able to achieve Rs 100 crore turnover even without expanding, but with expansion, a Rs 125 crore turnover is very possible,” Gupta said. The company is targeting minimum same store sales growth of 25%.
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