Traditional bookstores across the world are at risk of losing their sheen with more and more readers exploring digital mediums to browse, read or purchase books. However, Crossword Bookstores, a wholly-owned subsidiary of Shoppers Stop, is working on a new strategy that will focus on optimally sized stores and better curation of offerings to woo customers.
“We are leaning towards somewhere around 1,500 sq. ft. to be the right size for our Crossword stores, the focus being on 75% revenue from books and 25% from general merchandise. At present, books contribute to 55% of Crossword’s revenue, while the remaining comes from stationery and merchandise,” said Rajiv Suri, managing director and chief executive of Shoppers Stop, in an exclusive interview to Fortune India. The 55-year-old took over as head of the ₹5,113 crore K Raheja Corp-promoted department store chain in June 2018.
Crossword has been incurring losses over the past few years. In 2017-18, it posted a net loss of ₹5 crore, against a net loss of ₹4.2 crore in 2016-17, up from ₹3.2 crore the year before. Lately, Crossword has also been shutting stores. As of September 30, there were 84 Crossword stores in 34 cities across the country, down from 87 in 2017-18. Crossword is now also available on the Shoppers Stop website and mobile app. They also sell on Amazon India.
In 2017-18, Crossword Bookstores clocked revenue of ₹100.6 crore, down from ₹111.8 crore the year ago.
Over the next few months, Suri will look at creating the right “mix of books” to drive growth. “Books are in one way or the other making some sorts of a comeback. Especially in India, parents are quite insistent that kids read books. That’s a part of the culture and online has not had any impact on children’s books,” Suri said.
Management books and non-fiction books, too, have done well compared to paperbacks, he added.
According to a 2016 study by market research firm Nielsen, purchases of K-12 (kindergarten up to Class XII) school books are estimated to account for some 71% of the market, with higher education books accounting for an additional 22%. Speaking at an event organised by industry body FICCI in 2015, Vikrant Mathur, director–book practice at Nielsen India, had said that the print book market in India has a size of ₹26,000 crore, which is double the size of the Indian film industry and six times the size of music, radio and gaming industries, all together.
As Suri chalks out a revival plan, he believes that Crossword has now reached a situation where the impact of online has already been factored into its performance. “We have reached a stable phase and don’t see our sales going down any further,” he said.
E-commerce giant Amazon had picked up a 5% stake in Shoppers Stop last year and Crossword now sells the Kindle, the e-reader designed and marketed by Amazon, through its own stores.
According to a report by Edelweiss Securities released in June this year, Shoppers Stop has invested ₹4.5 crore in its omni-channel technology over the past two years and is now working towards accomplishing the third phase of its omni-channel journey, and has outlined another ₹15 crore for this.
“The target is to generate 10% of overall revenue through the omni-channel strategy. This strategy would be also extended to HomeStop (home retailing) and Crossword,” the report said.
On the omni-channel strategy for Crossword Bookstores, Suri said they were in the early stages of discussion on the new growth strategy and would be able to elaborate on this in the next few months.
By December 2018, Crossword Bookstores will have a clearer picture on its next steps that will help it grab a larger share of the market, Suri said.