Godfrey Phillips to Exit 24Seven Retail Business: Reasons and Implications

Team FS

31/Jul/2024

Key Points:

Godfrey Phillips will exit its 24Seven retail business, which generated 403 crore in FY24, accounting for 7.6% of total revenue.

The decision is driven by stakeholder feedback, long-term performance issues, and challenging market conditions in the retail sector.

The exit allows Godfrey Phillips to refocus on its core business, addressing the capital intensity and EPS dilution associated with retail operations.

In a significant strategic move, Godfrey Phillips has decided to exit the 24Seven retail business. This decision marks a pivotal shift in the company's approach, focusing on refining its core business operations. The retail division, which reported a revenue of 403 crore in the fiscal year 2024, contributed to 7.6% of the company's total revenue.

The closure of 24Seven is influenced by a combination of factors. Stakeholder feedback played a crucial role, reflecting concerns over the division's performance and market viability. The long-term performance of the retail division since its inception has not met the company's expectations, prompting a reevaluation of its role within the overall business strategy.

Prevailing market conditions in the retail sector also contributed to this decision. The retail environment has been challenging, characterized by increased competition and shifting consumer preferences, making it increasingly difficult for retail operations to thrive.

Additionally, the move aligns with the company's long-term business strategy. Retail operations have been notably capital intensive and have resulted in earnings per share (EPS) dilution. By exiting this segment, Godfrey Phillips aims to concentrate resources and efforts on its core business areas, which are expected to offer better returns and align more closely with the company's strategic goals.

This strategic exit allows Godfrey Phillips to streamline operations and focus on areas with higher growth potential, ensuring a more robust and sustainable business model moving forward.

Also Read : India's Retail Sector Sees Record Growth: Luxury Brands and Major Leases Dominate 2024

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Godfrey Phillips to Exit 24Seven Retail Business: Reasons and Implications

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