Shoppers Stop Ltd, which runs a chain of departmental stores, is selling its controlling stake in Crossword Bookstores to the owners of Agarwal Business House (ABH) for approximately ₹41.6 crore, as it seeks to focus on its core business, the company said on Tuesday.
Shoppers Stop expects to complete the divestment of a 51% stake within 15 days, and another 39% over the next 12 months, it added.
Owners of ABH, Dinesh Gupta, Aakash Gupta and family, have signed a share purchase agreement with Shoppers Stop on 31 August, it added. “Under the agreement, ABH will take over all the assets and brand. Any liabilities will be adjusted to arrive at the final consideration.”
The sale of the Crossword Bookstores is consistent with the company’s strategic plan to expand its core businesses, including First Citizen, private labels and beauty products, besides its omni-channel business, which has grown more than three times in the last one year, it said.
Shoppers Stop first picked up a stake in Crossword in 2000, and increased its stake gradually. The chain sells books, toys, confectionary and stationery. However, the business was a laggard for several years. The impact of the pandemic due to store closures since March 2020 only aggravated its owes.
In FY21, the company shuttered several stores, to bring the numbers down from 41 to 29, according to its annual report. Crossword Bookstores posted net loss of ₹12.91 crore with ₹21.58 crore in revenue. “The covid-19 pandemic and the nationwide lockdown during the year under review severely affected operations. Crossword has increased its focus on online sales and is taking various initiatives to meet the challenging business environment being faced by it,” the company had said in its annual report for FY21.
“While Crossword continues to take steps to revamp its operations (including store right sizing and brand positioning), the gestation period to achieve the desired level of turnaround is taking longer than previously envisaged. Based on a business valuation, the company has recognised impairment loss of ₹22.40 crores in the year with respect to its total equity investment and financial assistance of ₹68.72 crore,” the report said.
Source: Mint