Feb 3 2011
For a long time Varkey’s Supermarket chains were a staple of lots of city & town dwellers in the state of Kerala. It’s so convenient to have all those options in one store and especially if they had lots of franchises scattered around the region. People working in offices in the city would stop by on their way home to buy vegetables, chicken, fish, bread, fruit juices packets, perfumes, powders, utensils, etc etc. I live near two of their franchises so for the past 4 years I’ve come to always expect the stores to be filled with people buying stuff.
However it seemed that the roll-out of stores across the state through debt funds has stuck their finances really bad. Too many stores at the wrong time – during the recession has made it difficult for Varkeys to maintain their status quo and hence all you see is closed stores all across the cities. The retail chain, with 59 stores across the state, could be divesting at least 25% stake to raise funds to manage growth as well as for stabilising operations, which has been overheated by rapid expansion. The retailer has appointed investment bankers for a possible stake sale. With current liabilities, including bank loans, supplier credit and overdue salaries, running into almost Rs 20 crore, the company has asked vendors to stop supplies until the revival.
It’s always sad to see the closed shutters of their store when I go across the city. So I was glad to see that the stores were opened up in their MG Road branch. I couldn’t see much stuff on the shelf and it could be that they were doing some maintenance work or something else. I hope they recover and start opening their doors to customers once again.