Goenka: Pensive

Calcutta, June 8: RPG Group’s Spencer’s Retail has suffered a Rs 289-crore loss in the last fiscal because of the adverse economic situation.

Spencer’s had reported a loss of Rs 150 crore in 2007-08 on a turnover of Rs 812 crore. In the last fiscal, it had sales of Rs 1,070 crore.

The loss included exceptional items of Rs 90 crore on account of closures and the divestment of the mobile retail business.

Sanjiv Goenka, vice-chairman of RPG Enterprises, said he was hopeful of a turnaround later this year.

“We will achieve breakeven in the January-March quarter. May was the best in terms of sales,” he told The Telegraph.

Spencer’s, which is mainly into food and grocery retail, had closed 100 stores last year.

Goenka said the focus would be on large stores, spread over 20,000-60,000 square feet compared with smaller ones of between 1,000 sq ft and 3,000 sq ft.

The contraction in net sales area because of the store closures would be made up by new outlets this year. “We will end up with 12.5 lakh sq ft of net sales area by the end of this year,” Goenka said.

Spencer’s now has 10 lakh sq ft after closing down around 2.5 lakh sq ft.

The company, which is a wholly owned subsidiary of power generator CESC, has 290 stores. It will add 15-20 this year.

Consequent to Spencer’s mounting losses, CESC’s consolidated net profit came down to Rs 77 crore in the last fiscal from Rs 267 crore in 2007-08.

Earning per share declined to Rs 6.20 from Rs 22.62.

Saregama fund plan

RPG’s music outfit Saregama has decided to raise Rs 25 crore to fund its film production business.

The board of directors today approved the plan, which involved preferential allotment to the promoters and a private placement to financial institutions.

Shares will be issued at Rs 110 against today’s closing price of Rs 100.10.

The promoters’ holding will remain within 55 per cent.