RPG to close 10 percent of Spencer’s storesJuly 30th, 2008 - 9:53 pm ICT by IANS
Kolkata, July 30 (IANS) The RPG Group has decided to close down around 10 percent of the 410 outlets of its retail arm Spencer’s across India citing low revenues and ‘very high rents’. “We are reviewing the position of approximately 10 percent of the stores which are not profitable. Some of them are giving low revenue returns, while some others have very high rents,” RPG group vice chairman Sanjiv Goenka told reporters here Wednesday.
Alongside, the group has plans to open about 300 Spencer’s stores across the country.
On the talks between the company and the representatives of hawkers and city’s civic officials regarding the Spencer’s outlet in Gariahat, the inauguration of which was prevented by hawkers July 4, Goenka said: “It is an emotive issue. I can only say the dialogue process is on. But I know for certain there is no conflict of interest between our store and the hawkers”.
Hawkers say the hypermarket, located in a busy market zone, would affect their business.
The store was finally opened July 7, but the hawkers have demanded various restrictions on the items to be sold at the and their price bands.
Spencer’s, part of the Rs.135-billion RPG group, sells a wide range of products that include food items, apparel, fashion accessories, electronics goods, lifestyle products, music and books.
The chain is targeting Rs.20 billion sales turnover by the end of the current financial year.
Goenka said the company has got the clearances for the mall which it is developing at an investment of Rs.1.5 billion on its idle land at Beckbagan in the southern part of the city.
The construction work of the 720,00 square-foot mall will begin after the rains.
Goenka also said the RPG Group was among the eight bidders shortlisted for developing the Old Silver Mint on Strand Road, off the Hooghly river.
Asked about the problem of power cuts in Kolkata, Goenka, whose power utility CESC Ltd is the sole supplier of electricity in the city, said: “We have a total generating capacity of 975 megawatt, but the demand is more than 1,400 megawatt. WBSDCL (the West Bengal State Electricity Development Co. Ltd) provides power to meet a portion of the deficit. We try to borrow power to meet as much of the remaining shortfall as possible.”
Goenka, who is CESC vice chairman, said during the coming Durga Puja festive season in October, the company would buy power at a very high rate - about Rs.9 per unit - to ensure uninterrupted supply.
He admitted there was a miscalculation in gauging the demand in the city. “It was miscalculated by everyone concerned. And we are apologetic about it.”