Tuesday , 21 August 2018
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Spice selling 120-store mobile retailing business – Gadgets Now

Spice selling 120-store mobile retailing business – Gadgets Now


KOLKATA: BK Modi-owned Spice Group is selling its 120-store cellphone retail chain Hotspot for an undisclosed amount in a private equity-supported management buyout by its executive director, Subhasish Mohanty.

Spice Mobility chairman Dilip Modi confirmed the deal. Divestment of the retail business is a strategic step since the company wants to focus on digital services, financial services and payments, and digital entertainment working with telecom operators in South Asia, Southeast Asia, Africa and the Middle East, he said.

“Last year we had sold a significant stake in the mobile phone business and now the retailing business since these have become non-core areas, hence the exit,” said Modi. Both Modi and Mohanty declined to comment on financial terms.

Mohanty, who was part of Hotspot’s founding team and is also its chief financial officer, refused to divulge the name of the private equity fund supporting him for the buyout.

With this, Spice is the latest among large groups to exit the cellphone retailing business. The Essar Group recently shut The MobileStore chain, which was at one point the country’s largest, due to funding problems, while the Future Group has decided to downsize its mobile and electronics retailing.

An industry executive with knowledge of the transaction said the sale would help Spice Mobility clean up its books at a time when national retailing of cellphones has become tougher due to high operational cost, low margin, fast obsolescence of models and ecommerce competition.

subsidiaries that are getting sold — Hotspot Sales & Solutions which runs the retail chain and Spice Online that owns an ecommerce venture and e-distribution. Omniventures posted a loss of Rs 16.17 crore on consolidated sales of Rs 514.73 crore in the fiscal year through March 2017.

Spice last month exited the Hotspot chain in the South where it had 50 stores in Hyderabad, Bengaluru and Chennai. It sold the business to Bengaluru-based Global Access, which is into distribution for Micromax and Vivo in the southern market.

Mohanty said the business would focus on the National Capital Region and Kolkata, where its existing stores are located. Hotspot is one of the largest cellphone chains in these two markets, employing more than 500 people.

“We will add another 50 stores next calendar year and also set up a few exclusive Mi stores for Xiaomi. We may also explore the franchisee route,” he said.

As part of the deal, Mohanty-owned Emma Innovation & Technology will acquire Omniventures, a wholly owned subsidiary of Spice Mobility. Omniventures has two subsidiaries that are getting sold — Hotspot Sales & Solutions which runs the retail chain and Spice Online that owns an ecommerce venture and e-distribution. Omniventures posted a loss of Rs 16.17 crore on consolidated sales of Rs 514.73 crore in the fiscal year through March 2017.

Spice last month exited the Hotspot chain in the South where it had 50 stores in Hyderabad, Bengaluru and Chennai. It sold the business to Bengaluru-based Global Access, which is into distribution for Micromax and Vivo in the southern market.

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