Rise and Fall of Subhiksha
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Code :BSM0054
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Region : India
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Introduction:By the end of 2008, Subhiksha, one of the most popular retail brands of India,3 was on the verge of bankruptcy. Ramaswamy Subramanian (Subramanian), CEO of Subhiksha and the most written-about Indian CEO, was looking for means of reviving the retail chain. Subhiksha landed in trouble, after failing to pay its employees, suppliers and landlords for many months in 2008. Adding to its woes, its biggest investors, I-venture (Venture Capital arm of ICICI, India's largest private bank) and Zash Investment (AzimPremji's investment company Zash Investment Pvt.Ltd., has invested INR 230 crore in Subhiksha to acquire 10% stake from I-Venture's 33% pie) did not extend any help to the ailing discount store chain.The condition of the company was well-manifested by the pillage of around 600 Subhiksha stores in February 2009, as security personnel did not attend duties due to lack of payment. The perpetrators could be, Subramanian told, "disgruntled vendors, employees or anti-social elements taking advantage of the situation". Crumbled by the credit crunch, Subhiksha's operations came to a stand still with bare shelves and closed shops. With one of the renowned retail pioneers falling prey to the recession, the great story of the glorious organised Indian retail seems to be fading. |
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