Amazon buys 5% equity in Shoppers Stop for Rs. 179.25cr
Departmental store chain Shoppers Stop Ltd, in a board meeting, has okayed the proposal to sell 5% equity to Amazon's investment arm for Rs. 179.25 crore. This deal values Shoppers Stop shares at Rs. 407.78 each, lower than its Friday's closing price of Rs. 416.45. The firm said that this fresh capital would be used for physical and online expansion purposes. Here's more!
Shoppers Stop will now hold an extraordinary general meeting (EGM) to have its shareholders approve the equity sale to Amazon NV Holdings LLC. Its MD Govind Shrikhande said that no specific timeline has been determined for the completion of this investment process, as of now. Meanwhile, the firm has also gotten itself into an exclusive partnership with Amazon Seller Services Pvt. Ltd.
In this partnership, Amazon.in will host a microsite for Shoppers Stop, where the latter will sell all its private labels and brands. Reports say, over 400 brands will be up for grabs on this microsite. MD Govind Shrikhande said to Mint, that in this Amazon microsite, "We will have the same discounts on Amazon as we carry in our stores."
In this "joint marketing initiative" Shoppers Stop will also open Amazon Experience Centres, where the online retail giant will showcase the Amazon exclusive brands, primarily its fashion and accessories segment. Shrikhande informed, "This is still a work in progress and we will be able to share more details by Q4 (quarter ending March) of this financial year (2017-2018)."
Meanwhile, being unable to keep up the pace with online behemoths, like Flipkart and Amazon, Aditya Birla Group's e-commerce site Abof.com has decided to cease operations by year-end. Aditya Birla Group's HR director Santrupt Misra said, "Looking at how the big and long-term e-commerce businesses continue to struggle and are unlikely to make money for some time, it did not seem logical to continue."