In an effort to boost profitability and achieve break even by 2015, HyperCity will stop selling consumer durables and IT (information technology) products. The space so released – about 15,000 to 20,000 sq. ft. - will allow it to reduce the size of some of its stores.
HyperCity started off as a big box hypermarket retailer selling everything from food and grocery to apparel, consumer durables and home products spread over 1 lakh square feet space. But now the company opens stores only in the 50,000-70,000 square feet range and even smaller. Once the move to exit durables is complete, HyperCity may see more stores at 30,000 sq. ft. which are focused on food and apparel. A 30,000 sq. ft. store is expected to breakeven in 12-14 months, unlike the 18-24 months breakeven target at a typical HyperCity outlet. It recently opened a 30,000 square feet mini-hypermarket in Bangalore.
The company is already in the process of "rightsizing" two stores in Hyderabad and Mumbai, even as it has shut its Ludhiana store. The exit from consumer durables and IT products will be completed across its outlets over the next 12-15 months and that will automatically lead to rightsizing of stores and improved efficiency.