Globus turns to ecom to boost sales

Globus has failed to keep up with Shoppers Stop, Pantaloons, Lifestyle and others which entered the fashion segment around the same time or much later. With losses at Rs 24 crores in 2015-16, the accumulated losses at the fashion chain have now gone up to Rs 241.19 crores. The retailer’s sales were up just 2.7 per cent and consequently the loss before interest, taxes depreciation and amortisation widened to Rs 2.52 crores. Operating expenses in 2015-16 rose 2.9 per cent. Total debt of the company increased 11.9 per cent.

In the June 2016 quarter, the retailer shut two loss making stores, leaving it with 35 stores. Whereas Pantaloons has 179 stores and one factory outlet. Shoppers Stop has 80 department stores while Westside has 104 stores. Reliance Trend has 300 stores. Globus has, during the year, responded to this challenge by selling its products from most the major e-commerce sites and has seen a good potential of growth there. The company is also investing in upgrading its own e-commerce site with all latest features.

The fashion category in India has been growing by 12 per cent to 13 per cent every year for the last five years and fetches higher margins. Most fashion retailers are performing well and better than food and grocery or jewelry players. That means Globus needs to change its strategy.