Shopper's Stop Limited - Securities and Exchange Board of India

2) End of Season Period
Our product range comprises of lifestyle and aspirational products, which are dependent on fashion
cycles and trends and are also seasonal in nature. We currently operate in two seasons, Autumn-Winter
and Spring-Summer.
It is important for all fashion retailers to ensure that shelf space is continuously available for new, fast
moving, and high margin merchandise for sale. In order to achieve the same, all fashion retailers conduct
end-of-period clearance sale to achieve the following:
1. Merchandise left at the End of the Season is sold out
2. Space is generated for the new season merchandise
3. Customer acquisition in the value segment (customers in this segment make purchases during
such sales as the merchandise becomes affordable to them)
Such end of season sales impact our margins during the quarter that they are held. Internationally, the
end of season sale takes place two to four times a year, while in India it currently takes place only twice.
1) Flow Merchandise: Flow merchandise means goods which are not fashion oriented neither season
oriented and can be sold during any season (subject to their being in saleable condition).
For example: Merchandise bought with an intention to continue and repeat purchases season after
season under the same style code from the same /alternate or multiple vendor.
2) Season Merchandise: Season Specific merchandise are those goods that are used during the specific
season and are flow items for the respective season.
Expenditure
We continuously focus our efforts towards achieving process improvement in our business. We have
invested in technology over a period of time so that we can monitor business activities on a day-to-day
basis.
Purchases
We have various types of arrangements with our vendors for the merchandise they supply to us. These
include:
� Bought Out Merchandise
� Merchandise on Consignment Basis
� Concessionaires
Operating expenses (other than Purchases):
Our operating and other expenses were 27.46% of Gross Retail Turnover in FY 2004 and have increased
by 43% to Rs 1086 mn in FY 2004 as compared to Rs. 757 mn in FY 2003. We had opened 2 new stores
in FY 2004 and also achieved full year of operations for the 3 stores that were opened in FY 2003.
Our operating expenses can be broadly classified into Staff Costs, Administration Expenses, and Selling
& Distribution Expenses.
(Rs. Mn)
Period ending March 31 2004 2003 2002
Gross Retail Sales 3954 2949 2402
Staff Costs 224 171 157
% of Gross Retail Sales 5.7 5.8 6.5
Selling Expenses include our advertising/publicity expenses, direct marketing expenses, sales
promotions, discounting charges on credit card transactions and packaging materials.
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