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Rediff News  All News  » Business » Retailers' losses mount as stores remain shut

Retailers' losses mount as stores remain shut

November 29, 2008 13:16 IST

Retailers, who are already reeling under the economic slowdown, were forced to keep their shops shut in the southern and central parts of Mumbai as terrorists holed up in plush hotels and buildings of the city continued to battle military commandos.

Stores such as Provogue, Big Bazaar, Reid & Taylor and others have kept their stores shut for the past two days, taking a hit on their topline in the crucial wedding season. Those who opened their stores, saw up to 50-75 per cent drop in sales.

"It is difficult to do business in the current situation. Already we are battling a slowdown and a sharp rise in input costs," said Jay Gupta, managing director of discount chain 'The Loot' which closed three of its South Mumbai stores due to the tension in the area.

Retailers are also worried because the terror attacks have extended towards the weekend, which brings in most of their revenues as shopping in malls and big retail outlets is a family experience.

"Customer sentiment is weak and people are not coming out. We do not see any major sales this weekend," said Nikhil Chaturvedi of Provogue, a Mumbai-based retailer which has shut nearly 15 of its stores in Mumbai and expects a business loss of nearly Rs 1 crore (Rs 10 million).

Panic stricken customers are also avoiding crowded places including malls and multiplexes, which could become potential terror attack spots, going by the ongoing strategy followed by the terrorists.

Govind Shrikhande, chief executive of department store chain Shopper's Stop, said: "When the government is unable to provide security to malls, it is better that we close down our stores," he said.

Brandhouse Retails, a unit of S Kumars Group which manages brands such as Reid & Taylor, Stephens Brothers, Belmonte and Carmichael House, has asked all its 25 franchisees to close their stores for two days. "Shopping is the last thing on people's mind," said Tarun Joshi, MD, Brandhouse Retails.

Retailers felt closing stores, even at the cost of business loss, was sensible in the current conditions.

"Even if we need to close our stores for three days we will do it as we can not take risks with the lives of our employees and consumers. Business comes next," said Rakesh Biyani, chief executive of Pantaloon Retail. Pantaloon has closed some of its Big Bazaar and Pantaloon stores in Mumbai.

However, some malls such as High Street Phoenix in Lower Parel, Inorbit Mall in Malad, Oberoi Mall in Goregaon, which were closed on Thursday, opened on Friday.

Raghavendra Kamath in Mumbai