Mumbai: Departmental store chain Shoppers Stop Ltd has approved a proposal to sell 5% equity in the company for Rs179.25 crore to Amazon NV Holdings LLC, the investment arm of the world’s largest online retailer Amazon Inc. in a board meeting held on Saturday.
The proposed deal values Shoppers Stop shares at Rs407.78 each. The firm’s shares closed at Rs416.45 during Friday’s trade, down 3.39%.
Shoppers Stop will use the funds to continue its investments in expanding physical and online retail businesses, said managing director Govind Shrikhande.
The company will now hold an extraordinary general meeting (EGM) of its shareholders to seek their approval for this deal. However, Shrikhande said the company did not have an exact timeline yet for when this investment proposal will have gone through all necessary approvals.
In a related development, Shoppers Stop also announced it had entered into an exclusive partnership with Amazon Seller Services Pvt. Ltd, a part of Amazon India, to sell all its private labels and brands that have tied up exclusively with the retailer on a dedicated microsite for Shopper’s Stop on Amazon.in. In total, Shoppers Stop will sell over 400 brands through this microsite.
This move comes a few days after the Aditya Birla group announced it was closing its own fashion e-commerce website abof.in citing unsustainable discounts to win customers in the Indian e-commerce business. “We will have the same discounts on Amazon as we carry in our stores,” Shrikhande said to Mint.
In return, the two retailers will conduct “joint marketing” initiatives while Shoppers Stop will open Amazon Experience Centres where the online retailer can showcase its brands.
“These will be for customers to touch and feel Amazon’s exclusive brands, mainly for fashion and accessories,” Shrikhande said. “This is still a work in progress and we will be able to share more details by Q4 (quarter ending March) of this financial year (2017-2018),” he said.