Spencer’s Retail (Spencer’s), the retail arm of CESC, is planning to invest Rs100 crore in expansions in FY2010E, and to introduce some international apparel brands in the country.
The company is also looking at expanding the US-based Beverly Hills Polo Club (BHPC) brand, with which Spencer’s had tied-up last year. It will raise the number of BHPC standalone stores to ten in the next six months, from the three at present.
Spencer’s has also entered into an agreement with French bakery chain Au Bon Pan, and will open the first India outlet at Bangalore in October. The company, which had a turnover of around Rs1,000 crore in 2008-09, has registered a growth of 18% in its mainstream grocery business during the Q1FY2010.
It is also exploring the option of a revenue-sharing model with realty owners for its new stores. For FY2009, SpencerRs.s reported a Top-line growth of 32% to Rs1,071 crore.
The company reported a Loss after tax of Rs177cr in FY2009, as against Rs89 crore in FY2008. We maintain a BUY on CESC, with a target price of Rs449.