Sanjiv Goenka to focus on Spencer’s growth

After renaming his business as RP Sanjiv Goenka Group,

Sanjiv Goenka has decided to focus on re-building his loss-making retail arm – Spencer’s Retail to convert it into revenue generating business. With a backing of his Rs 19,000 crores empire, Sanjiv Goenka’s umbrella of companies consist of CESC, Noida Power and Integrated Coal Mining (ICML) in power, Phillips Carbon Black, Spencer’s Retail, MusicWorld Retail and Au Bon Pain Cafe India (ABPCIL) under the retail umbrella, Saregama India and Open Media Network in entertainment and media and CESC Properties, a real estate company.

According to the new set goal, Goenka wants to convert his Rs 9,000 crores Spencer’s to become Rs 25,000 crores in five years. He expects the non-power business to contribute at least 50 per cent of the Group’s revenue by 2016-17, from the current 39 per cent. Of this, the 14 per cent that comprises revenue from retail is expected to grow by almost 30 per cent. However, in the past 15 years Spencer’s has tried various methods to become a profit-making venture but has failed by making a loss of Rs 520 crores during 2008, Rs 220 crores in 2009-10 and Rs 130 crores in 2010-11. It also had to shut almost 150-odd stores between 2008 and 2010. With about 220 existing stores, achieving break-even is still far away for the company. Goenka is already in talks with several domestic retail players for a tie-up on the back-end of the supply chain. By doing this, he expects to boost margins by up to 50 per cent.