RPG faces slowdown music in retail bazaar

NEW DELHI: RPG Enterprises, which runs Spencer���s, Music World and Books and Beyond retail stores, has slashed revenue target by 16-22% for its retail business from Rs 1,800 crore to Rs 1,400-1,500 crore this fiscal on store closures and ���challenging��� retail environment.

���We closed 56 non-performing stores. Either the location of such stores was not good or we were paying very high rentals for the stores,��� RPG Enterprises vice-chairman Sanjiv Goenka said, adding that the company didn���t intend to close down more stores. Spencer���s currently has 400 stores, including 32 large-format stores.

Mr Goenka said company���s expansion plans remained intact, as it would spend Rs 2,500 crore on taking the total number to 750 stores by March ���10. The company plans to add 50 stores by the end of the current fiscal.

���The retail environment is challenging and the period up to March ���09 will be difficult,��� Mr Goenka said, adding that a decline in inflation may prompt RBI to cut interest rates further fuelling demand from the beginning of the next fiscal. A stock market turmoil, high rate of inflation and recent reports of job cuts have forced Indian consumers to defer purchases, putting pressure on retailers��� top line in the past six months. Diwali sales were weak at Spencer���s this year. ���Earlier we used to have bumper sales on all 7-8 days leading up to Diwali. But this year, we saw such sales only on Dhanteras (two days before Diwali),��� he said.

Meanwhile, Spencer���s also announced a franchisee agreement with US-based apparel brand Beverly Hills Polo Club (BHPC).