HyperCity reduces store sizes for profitability

K Raheja-owned hypermarket chain HyperCity has reduced the size of its Amritsar

and Hyderabad stores as per plan. While in Amritsar, the company downsized the store by half, it let go over 30,000 square foot retail space at its Hyderabad store.

The plan is to reduce around two lakh square feet across its fifteen existing stores to reduce rent liability and operating costs, while bringing in efficiencies. Now HyperCity’s newly invented two formats would have either 45,000-50,000 square feet for the large stores and 25,000-30,000 square feet for compact smaller stores. There are currently 15 HyperCity stores, spread over an area of 12.86 lakh square feet.

In the third quarter, ended December 31, Shoppers Stop including HyperCity, HomeStop, Mothercare, Crossword and MAC reported a 5.5 percent like-to-like growth lower than the double-digit growth in the earlier two quarters -15.5 percent in the September quarter and 12 percent in the June quarter respectively. The company’s stand-alone net profit for the quarter stood at Rs 17.34 crore, a jump of 1.5 percent year-on-year. However, on a consolidated basis, net profit was way lower at Rs 5 crore due to losses at HyperCity.

The HyperCity format has taken longer than expected to break-even and the parent company is trying several methods to bounce back.