Shares of Shoppers Stop rose 6 per cent to hit an intraday high of Rs 254.55 on BSE after the company announced that it has closed the sale of a controlling stake of its 100% Subsidiary, Crossword Bookstores Limited to the owners of Agarwal Business House (ABH), Pune, according to the share purchase agreement between Shoppers Stop and ABH signed on August 31, 2021.
The business of Crossword Bookstores is valued at Rs 41.6 crore. Under the agreement, ABH will take over all the assets and brands.
The stock opened 1.7 per cent higher at Rs 244.90 against the previous close of Rs 240.80. It has been gaining for the last 2 trading sessions.
With a market capitalisation of Rs 2,680.51 crore, the shares stand higher than 5 day, 100 day and 200 day moving averages but lower than 20 day and 50 day moving averages. The small-cap stock has risen 22.5 per cent since the beginning of this year, and has delivered 39 per cent return in the last 12 months.
The company informed that the sale of the Crossword Bookstores is consistent with the company's strategic plans, which is to focus on its core business and expand its strategic pillars viz, First Citizen, Private Labels, Beauty and most importantly, its Omnichannel business, which has grown more than 3 times in the last one year.
Commenting on the sale, Venu Nair, Managing Director and Chief Executive Officer of the company said, "We are pleased to continue the business transformation we set out to accomplish from last March and selling the books' business is an important part of that strategy. This represents another step in our progress to elevate Shoppers Stop to a customer focused, Omnichannel retailer, to enable us to deliver on the promises we make to our customers and shareholders."
"Most importantly, we are selling Crossword Bookstores to our franchisee ABH, who has been in this business for more than two decades and are extremely passionate about the book business. We are extremely confident ABH will grow the book business and take it to the next level. I am very thrilled about this deal, as it is a win-win for both Shoppers Stop and ABH."
The company reported a loss of Rs 104.89 crore for the quarter ended June 2021 compared to a loss of Rs 120.25 crore in the year-ago period. Revenue from operations grew 269 per cent to Rs 205.23 crore in the June-ended quarter against Rs 55.55 crore a year ago.
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today