Vishal Retail may miss revenue target for '09
Delhi-based retailer, Vishal Retail may miss revenue targets for the financial year 2009 due to low sales following global financial crisis. Its sales may decline as consumer spending is continuously declining following fears of job cuts and grim job outlook.
The retailer is unlikely to go for expansion plans for the next quarter due to unavailability of easy funds and low growth of business. The Chairman and Managing Director of Vishal Retail, Ram Chandra Agarwal said, "Since we have frozen our expansion plans for the rest of the financial year, it is unlikely that we would be able to meet our revenue target."
The company is analyzing the performance of various stores across the country and it would revise growth targets in days to come. It has currently 181 stores with nearly 29,80,900 sq ft of retail space across India. The company has arranged debt of about Rs 800 crore from banks out which Rs 725 crore has already been borrowed.
The retailer ruled out the possibility to sell stake and said, "We do not need to sell our stake to any retailer as we will not expand this fiscal and, we have enough working capital to run our daily business."
Commenting on low demand, Manager — Strategic and Commercial Intelligence (Transaction Services), KPMG, C Ravishankar said, "The company will not be able to meet its revenue target due to freeze in its expansion of stores as well as slowdown in demand."
It is worth noting that all retailers are facing cash problem. Recently, Shopper's Stop defered plans to raise stakes in Hyper city due to unavailability of cash and low sales.