Crossword plans to open more stores, formats and launch an app
In an effort to bring the book publishing business back to its glory days, before streaming platforms brought in customers, bookstore chain Crossword has set ambitious goals. These include a renewed interest in children’s books, the consolidation of an omnichannel game, an increase in the number of stores and the launch of private labels in all categories.
According to industry estimates, bookstore activity had increased by 9-10% per year before the pandemic, but in 2020 the decrease was around 5%. “Much of the activity has also taken place online,” said Aakash Gupta, CEO and Managing Director of Crossword Bookstores. But in 2021, activity is almost back to normal. Around the world, independent booksellers and bookstore chains are growing. For example, Waterstones, Barnes & Noble and Dymocks have all returned to profitability over the past year as physical books return to fashion and e-book and Kindle sales plateau. In India, e-books do not find many takers except for high-end readers/travellers.
The biggest threat has always been buying books online, especially on Amazon. “We’re a bit behind everyone else when it comes to omnichannel and e-commerce, being traditionally a brick-and-mortar retailer,” Gupta said. Crossword is now upping its omnichannel game, with plans to launch a new app and revamp its website in the next six to nine months. The company hopes to differentiate itself by making its website more organized, like a community for book lovers. “We want to be a bit of Goodreads, a bit of Amazon and a bit of our physical store,” Gupta said.
Late last year, Shoppers Stop sold Crossword Bookstores to its largest franchisee, Pune-based Agarwal Business House (ABH), for 41.6 crore. Under Shoppers Stop, Crossword had prioritized high-margin and non-book categories like toys, electronics and accessories, with books’ contribution to overall revenue declining over the years to around 55% . Under ABH, that figure is already 65%, with the rest split evenly between toys and stationery.
In the future, the contribution of books to overall revenue could even reach 70%, according to Gupta’s estimate. The goal, clearly, is to make hero books the mainstream product once again.
In the world of books, the lion’s share of attention will be on children’s books. “The majority of them are discovered in the store itself,” Gupta said. “While not necessarily a higher margin business, children’s books are our largest category, accounting for nearly 38% of all books.”
Beyond books, Crossword plans to launch its own private labels in categories such as toys and stationery over the next nine months. “Families always want high-end, exclusive puzzles, board games, edutainment toys or stationery and gifts,” Gupta said. The company also plans to expand its publishing line, The Write Place, which helps beginning authors get published.
For FY23, the chain, which has 80 stores, plans to launch 19 new stores. He recently opened two stores in Lucknow, with a third on the anvil. It is present in cities such as Nagpur, Nashik, Udaipur, Bhopal and Siliguri, in addition to major metros. “Our vision is to have 300 stores in different formats. Our network will also help last mile online deliveries,” Gupta said.
In addition to forays into Tier II cities like Patna, more shops are also planned in the metros. “There are so many cities that we haven’t fully penetrated yet,” admits Gupta. For example, in Delhi, the company currently has only one store. Crossword claims to currently have an execution rate of
150 crore, with estimates of taking it up to170 crore by the end of this fiscal year. “Brand Crossword’s revenue projection is 400 crores over the next two years,” Gupta said.
In terms of formats, the company currently has seven flagship stores, all located on high streets, and plans to launch five or six more in the next two years. It also has a few stores in hybrid office complexes, for example in Gurugram and Noida. “We plan to expand into this space because we’re a good gift destination for these offices, and it’s a very engaged customer base.”
Travel retail is another path to growth. Crossword has three stores at Mumbai airport, with two more in the offing. Talks are underway to bid for Bangalore Airport. It could soon also open stores in metro stations. “Unlike other airport bookstores with many categories of items, we are true bookstores with 50-60% of space exclusively dedicated to books,” Gupta said.
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