From: William Bissell [mailto:
Sent: 18 March 2018 08:09
To: Charu Sharma <>
Cc: Harpreet Duggal <>
Subject: Re: Nagpur Law College Road store relocation Feasibility - Charu's concerns on new stores not meeting projections
RA – CEO
From: Charu Sharma <
Date: Saturday, 17 March 2018 at 1:50 PM
To: Ajay COM <
Cc: >, 'Viney Singh' <
Subject: Re: Nagpur Law College Road store relocation Feasibility
Dear Ajay,
My concern is the stores opened or relocated this year have not been meeting the projected sale figures.
S.No. / Store Code / Type / Year Bucketing / Store Name / State / Type / Original Carpet Area / New Carpet Area / Capex Year 1 (in lacs) / Capex Ach / Date of opening/ expansion/ relocation1 / HYDINT / New / 0-1 Yr / Hyderabad, International Airport / Hyderabad / Airport / 620 / 27 / 20/Feb/18
5 / DELINT / New / 0-1 Yr / Delhi International Airport / Delhi / Airport / 861 / 55 / 38.2 / 13-Dec-17
9 / FBDNIT / New / 0-1 Yr / Faridabad, NIT / Haryana / Compressed / 1400 / 21 / 4 / 03/Nov/17
10 / DELSUV / New / 0-1 Yr / New Delhi, SundarVihar / New Delhi / Compressed / 1600 / 15 / 6.3 / 28/Oct/17
11 / ISKNCZ / New / 0-1 Yr / Nashik, Neelkamal Comm Zone / Maharashtra / Compressed / 2856 / 29 / 22 / 12/Oct/17
12 / DELFO / New / 0-1 Yr / New Delhi, SaritaVihar / New Delhi / Compressed / 2400 / 21 / 8 / 06/Oct/17
13 / BOMKEM / New / 0-1 Yr / Mumbai, Kemps Corner / Mumbai / Compressed / 9658 / 155 / 75 / 05/Oct/17
14 / $DELJP / New / 0-1 Yr / New Delhi, Janpath / New Delhi / Compressed / 3700 / 75 / 4..8 / 16/Sep/17
17 / DELDW7 / New / 0-1 Yr / New Delhi, Dwarka Sec-7 / New Delhi / Compressed / 2000 / 28 / 12.8 / 01/Sep/17
18 / BLRINT / New / 0-1 Yr / Bangalore, International Airport / Bangalore / Airport / 1356 / 45 / 23.1 / 30/Aug/17
21 / AMDBDH / New / 0-1 Yr / Ahmedabad, Bodakdev Home / Ahmedabad / CHDC / 2400 / 40 / 25.6 / 18/Aug/17
23 / MAAFVM / New / 0-1 Yr / Chennai, Forum Mall / Chennai / Compressed / 840 / 14 / 13.1 / 11/Aug/17
25 / GGNSPM / New / 0-1 Yr / Gurgaon, South Point Mall / NCR / Compressed / 2500 / 52 / 39.1 / 02/Aug/17
28 / BOMLNT / New / 0-1 Yr / Mumbai, Seawoods / Mumbai / Compressed / 2131 / 30 / 22.7 / 20/Jul/17
30 / GOIVAS / New / 0-1 Yr / Goa, Vasco / Goa / Compressed / 1213 / 15 / 5.9 / 07/Jul/17
32 / HDWNR / New / 0-1 Yr / Haldwani, Nainital Road / Uttarakhand / Compressed / 1715 / 13 / 7.9 / 25/May/17
38 / AMDSQM / New / 0-1 Yr / Ahmedabad, 4D Square / Ahmedabad / Compressed / 1112 / 12 / 7.1 / 01/Apr/17
41 / BLRBNK / New / 0-1 Yr / Banashankari / Bangalore / Compressed / 2100 / 24 / 13.4 / 23/Feb/17
43 / RAJTGR / New / 0-1 Yr / Rajkot Tagore Road / Gujarat / Compressed / 2100 / 18 / 12.1 / 10/Feb/17
1 / CCUSC / Relocation / 0-1 Yr / South City Mall Kolkata / Kolkata / Compressed / 650 / 2835 / 106 / 24/Jan/17
2 / STVIM / Relocation / 0-1 Yr / Surat, Dumas Road / Gujarat / Compressed / 1880 / 3200 / 40 / 27.8 / 7/Oct/17
3 / BLRBR / Relocation / 0-1 Yr / Bangalore, Bel Road / Bangalore / Compressed / 3792 / 7515 / 80 / 60.8 / 22/Sep/17
4 / DELGPK / Relocation / 0-1 Yr / New Delhi, Green Park / New Delhi / Compressed / 1100 / 2400 / 42 / 24.9 / 16/Jul/17
5 / BHOTTN / Relocation / 0-1 Yr / Bhopal, Arera Colony / MP / Compressed / 2500 / 5751 / 65 / 41.3 / 6/Jul/17
6 / UDRRKM / Relocation / 0-1 Yr / Udaipur, Rkay mall/ ashoknagar / Rajasthan / Compressed / 1524 / 1800 / 15 / 10.7 / 19/May/17
7 / NOIMOI / Relocation / 0-1 Yr / Noida, Mall of India / NCR / Compressed / 1232 / 3963 / 100 / 87.6 / 10/May/17
8 / BELGAM / Relocation / 0-1 Yr / Belgaum / Karnataka / Compressed / 1000 / 2630 / 17 / 13.6 / 23/Feb/17
9 / IXWHST / Relocation / 0-1 Yr / Jamshedpur / Jharkand / Compressed / 1050 / 1829 / 31 / 24.3 / 26/Feb/17
Dear Viney and Mukesh,
Should we be capping the capex as a %age of sale, and also define a minimum level of sale per sq ft.
Regards,
Charu Sharma
# 09312508194
From: Ajay COM <
Date: Saturday, 17 March 2018 at 12:18 PM
To: Charu Sharma <>, 'Viney Singh' <
Cc:
Subject: RE: Nagpur Law College Road store relocation Feasibility
Hi Mam,
The major issue in Nagpur is getting a commercial approved building. We have been trying for over a year now but have not been getting the same. Secondly the taxes are high and in this case we are getting a property which is inclusive of all local taxes @ 70/-.
Our agreement with the existing landlord is already over and he is asking us to vacate as he is willing to sell the same. We don’t want to renew as the store is very ill placed and very small to grow business. Nagpur today has a standalone Central, Lifestyle, Shopper Stop and two stores of Pantaloons. There is a new mall coming up in Nagpur Trilium by Tata but that is going to take a couple of years. The city is getting Metro and the work is happening at a breakneck speed as the city also represents the current CM and Nitin Gadkari the present Transport Minister.
Nagpur is also developing as a hub for all Central warehouses post GST. Future Group have come up with one of their biggest warehousing facilities here as this is the centre point of India.
The town for sure has a potential to grow to the numbers projected in your mail in the next couple of years. Our decision to relocate Bhopal store has given us a 23% growth August to February and although we are still 15 lacs away from the approved feasibility we are generating an EBDITA of 27% YTD which also includes the April to July performance of the old store.
The proposed Project cost is 1.65 crores and there is a 13 lacs WDV and a 13 lacs of contingency planned. We do expect that the store will be done in 1.50 lacs and not more.
Last but not the least the current store works on a 62% GP as this is only a Garments store. We have projected the feasibility on 58% presuming that the store will also have home offerings. If the sale ratio helps us to achieve 60% GP then we will be hitting a 39% EBDITA against the 37% projected now and the current EBDITA of 39% (YTD February).
Regards
Ajay
From: Charu Sharma [mailto:
Sent: 17 March 2018 07:18
To: Viney Singh <>; 'Ajay Kapoor' <
Cc:
Subject: Re: Nagpur Law College Road store relocation Feasibility
Dear Ajay,
I too think the area is too large for the projected sales, as sales per Sq foot is dropping to Rs 1000/- . Is in not possible to get a smaller space. You have already projected the sales to double, Do you think Nagpur has the potential to take the sales up to 50-60 L in the next couple of years?
Is it possible to bring down the project cost as 192 L seems high for the projected sales, even the EBIDTA is coming down to 36% compared to current 40%.
Charu Sharma
# 09312508194
From: Viney Singh <
Date: Saturday, 17 March 2018 at 12:09 AM
To: Ajay COM <
Cc: >, Charu Sharma <
Subject: RE: Nagpur Law College Road store relocation Feasibility
Dear Charu and Mukesh,
I am ok to move ahead on this site. Do let me know if you have any other opinion.
Regards
Viney
From: Ajay Kapoor <
Sent: 16 March 2018 11:48
To: 'Viney Singh' <
Cc:; 'Charu Sharma' <
Subject: RE: Nagpur Law College Road store relocation Feasibility
Hi Viney,
The proposed site is 4600 sq ftapprox on Carpet, we will be getting approx. 4065 sq ft of retail area taking out the non trading areas which has been plugged to categories.
Yes, I agree that the earlier proposal was for 3000 sq ft, but it had no representation for home. Nagpur is seeing a lot of development as the city is the base for the CM of Maharashtra as well as Nitin Gadkari. This would be a kind of flagship store for us.
The other challenge in Nagpur is the non availability of any clear commercial property which we are getting here. The main market is the cantonment where the dwellings are very small and then Dharampeth where the size of the stores are again the same with not all of them being commercially clear.
Regards
Ajay
From: Viney Singh [mailto:
Sent: 15 March 2018 16:55
To: 'Ajay Kapoor' <
Cc:; 'Charu Sharma' <
Subject: RE: Nagpur Law College Road store relocation Feasibility
Dear Ajay,
Is the proposed store size 4065 sft or 4600 sft ? Do we need such a large store.
Earlier you had recommended a 3000 sft store which seemed like a perfect progression from our current 1400 sft.
Regards
Viney
From: Ajay Kapoor <
Sent: 15 March 2018 16:43
To: 'Viney Singh' <
Cc:; 'Charu Sharma' <
Subject: RE: Nagpur Law College Road store relocation Feasibility
Hi Viney,
Please find attached the same.
Sorry missed attaching the feasibility and the pics earlier in the mail.
Regards
Ajay
From: Viney Singh [mailto:
Sent: 13 March 2018 10:21
To: 'Ajay Kapoor' <
Cc:; 'Charu Sharma' <
Subject: RE: Nagpur Law College Road store relocation Feasibility
Can we see some photos of the site pl?
Regards
Viney
From: Ajay Kapoor <
Sent: 12 March 2018 13:16
To: 'Viney Singh' <
Cc:; 'Charu Sharma' <
Subject: RE: Nagpur Law College Road store relocation Feasibility
Hi Viney,
We had left the earlier location which was approved for want of commercial clearances. We have finally found another location which is very close to our existing store and is on a bigger plate.
We have already overshot our agreement in the current premises and the same has been sold off and the landlord is wanting us to vacate the same immediately. Since the proposal was approved earlier and the location is very close to our existing store we are going ahead with the new proposed premises.
The details of the Commercials are as under :
Rent : Fixed rental of 3.50 lacs a month on approx.4600 carpet area which works out to 76/- per sq ft. and 70/- a sq ft on the SBA.
CAM @ 3/- per sq ft
Rent escalation 15% after 3 years.
Lease term: 3+3+3
Lock in: 18 months.
Fit out period: 45 days.
Security Deposit : 6 months
Advance Rent : NA
Stamp duty & Registration : 50:50.
Key store Metrics:
Projected Sales per month: 42 lacs per month.
Incremental Category wise breakup of the proposed sales and area is as under :-
EBIDTA: 37%
Garments 40%
Home 27%
ROCE on totalcost: 66%
ROCE on project cost :98%
Rent : Sales : 8%
Occupancy cost on Carpet area 9%
Capex: 192.25 lacs, 213.25 lacs including Capex and Deposit, 283.81 including Capex, Deposit and Stocks.
Regards
Ajay Kapoor
From: Viney Singh [mailto:
Sent: 24 May 2017 13:51
To: 'Ajay Kapoor' <
Cc: 'Nidhi Women's' <>; ; 'Charu Sharma' <
Subject: RE: Nagpur Law College Road store relocation Feasibility
Dear Ajay,
The productivity of the store is low and hence ROCE is below norm. However as this is a flagship store for Nagpur I am ok to move ahead as rentals seem reasonable and location is most favoured in Nagpur. Hence if we are able to get some upsides on sales the financial viability will be v good. Pl try and get some capex support from developer which will help us improve ROCE.
Regards
Viney
From: Ajay Kapoor [mailto:
Sent: 14 May 2017 15:36
To: 'Viney Singh' <
Cc: 'Nidhi Women's' <>; ; 'Charu Sharma' <
Subject: Nagpur Law College Road store relocation Feasibility
Dear Viney,
Please find enclosed the proposal for a store to be relocated from the current location to Cement Road, Nagpur.
At present the store is on the main Law college road, but is in the lower ground floor and has very poor visibility. The store which was earlier in Empress Mall was moved to the Law College Road in the year 13-14 and has been doing consistently. However the representation of the brand needs a much better location and space. We have looked for a place in the parallel road called Cement Road and the location was visited by me and Saveen on the 4th of May. The destination is a standalone building with offices on the top and will be available to us in the GF and FF. The store will be a kind of destination store in the city as the location is in the most affluent residential colony and has a good visibility and ample parking space.
Proposed Store size is 3000 sqft carpet on two floors and the store will be interconnected through stairs. The landlord himself being an architect has constructed a good building with no pillars and uses the upper floors for his office space now.
The performance of the store for the last 5 years is as under :
The proposal is being submitted keeping the following in mind :-
- To present a store which becomes a Fabindia experience for the customer as the current store size is too small and has no scope for any expansions.
- Nagpur today is the constituency of Nitin Gadkari and Transport minister and Devendra Fadnavis, current CM of Maharashtra and is attracting good investments.
- At the moment we don’t have a fair representation of many categories in the store and overall the presence of garments in the basement is too cramped.
- Dedicated parking for the customers.
The details of the Commercials are as under :
Rent : Fixed rental of 3.22 lacs (including ST) a month on 3000 carpet area which works out to 93/- per sq ft.
CAM @ NA
Rent escalation 15% after 3 years.
Lease term: 3+3+3
Lock in: 18 months.
Fit out period: 45 days.
Security Deposit : 6 months
Advance Rent : NA
Stamp duty & Registration : 50:50.
Key store Metrics:
Projected Sales per month: 35 lacs per month.
Incremental Category wise breakup of the proposed sales and area is as under :-
EBIDTA: 35%
Garments 37%
Home 29%
ROCE on totalcost: 72%
ROCE on project cost :102%
Rent : Sales : 9%
Occupancy cost on Carpet area 9%
Capex: 144.04 lacs, 160.84 lacs including Capex and Deposit, 211.15 including Capex, Deposit and Stocks.
Will request for an approval for us to take the same forward.
Regards
Ajay Kapoor