Spencer’s Retail to demerge after booking profits

The demerger of Spencer's Retail from RP-Sanjiv Goenka Group's flagship company CESC will take place only after the company succeeds in achieving it target of booking profits. Spencer's posted a net loss of Rs 166 crores from a revenue of Rs 1,458 crores during FY14.

Pathik Retail, the holding company of Spencer's was merged with CESC in 2007 to leverage the balance sheet of the the power utility to fund the expansion plan. Spencer's was looking forward to reporting profit from third quarter of 2013-14. The company now plans to open 10-15 stores every year focusing over the next few years.

The retail arm currently operates 126 stores including 33 in large format in 40 cities of the country. Spencer's had closed several small format stores in the past across places it operates. At present, 80 percent of the revenues are generated from food, a low margin business. The chain will try to increase the higher margin non-food business, particularly casual wear and kitchenware, to 25 percent in a couple of years.