Globus Retail Stores reports huge losses

Huge losses were reported by Globus Retail Stores. For the Financial Year 2014-2015, the company made a loss of Rs 26.33 crore, with sales falling by over 11.2 per cent to Rs 2,017.1 crore. Three loss-making stores were also shut down and tried to reduce operation costs by setting up smaller stores. As a result total expenditure declined by 1 per cent to Rs 240.30 crore, which led to the EBITDA loss dropping by 86 per cent to Rs 2.09 crore. The Rajan-Raheja Group promoted Globus chain of stores has a total debt of Rs 146 crore as of March 31, 2015.

Globus plans to close all its loss-making stores; it has already shut down its Jalandhar store. The boom in e-commerce has majorly affected its offline sales. As a result, the company started selling its products from major e-commerce websites. The response has given the company the confidence to revamp its e-commerce site, with all the latest features to make it ready for the omni-channel retailing experience in the days to come. Vinay Nadkarni, managing director and chief executive officer, Globus Retail Stores, feels that by focusing on e-commerce and omni-channel the company has seen some growth. He is now ‘focusing on reducing expenditure and getting the right format which would be sustainable in the long-term’.

At present Globus has 37 stores which are operational across the country. These stores are spread out over areas ranging from 3,000-7,000 sq ft. Mumbai-based Globus opened its first store in Indore in 1999 but since 2008 it started facing difficult times. Now, its focus is on smaller format stores, and primarily on youth-oriented clothes and accessories.