24Seven may return under ‘The New Shop’ banner as acquisition talks begin

Posted on by

3 min read Last Updated : Aug 08 2024 | 10:57 AM IST

The New Shop, a grocery convenience retail startup, is in advanced discussions to acquire Godfrey Phillips India’s (GPI) 24Seven retail chain, according to a report by The Economic Times. This acquisition could see all 24Seven stores rebranded under The New Shop banner.
 


If the acquisition proceeds, all 24Seven stores, which also operate 24 hours, seven days a week, will be rebranded as The New Shop. Operating retail stores around the clock are regulated at the state level and require specific local licences. Existing The New Shop stores already comply with these regulations.


Founded in 2019 by siblings Aastha and Charak Almast, along with Mani Dev Gyawali, The New Shop operates 160 stores across 35 cities in India. This New Delhi-based startup employs an omnichannel approach, offering a range of products including grocery staples, snacks, beverages, personal care items, home care products, pet foods, hygiene products, and over-the-counter medicines. The business runs on a franchise-owned, franchise-operated model and keeps its stores open 24 hours daily.


Godfrey Phillips exits 24Seven


Launched in 2005, the 24Seven chain offered round-the-clock convenience with a diverse product range including groceries, snacks, beverages, personal care products, cosmetics, and ready-to-eat food. Godfrey Phillips, part of Modi Enterprises, also sells cigarette brands such as Four Square, Cavanders, and Red & White, and distributes Marlboro cigarettes under a licence agreement with Philip Morris.


Godfrey Phillips’s decision to exit the retail business followed a judicial clearance for closing the 24Seven retail operations. The initial announcement came on April 12, with the board citing long-term performance, market conditions, and strategic alignment as reasons for the exit. Earlier, an injunction had temporarily blocked the sale following an application by Samir Modi.


Samir Modi expects Rs 700-Rs 1,000 cr valuation


In a statement to Business Standard in July, Samir Modi, executive director of Godfrey Phillips and founder-president of 24Seven, mentioned the board’s decision to exit the business, expecting a valuation between Rs 700 crore and Rs 1,000 crore.

 “I wear two hats, one is of executive director of Godfrey Phillips, and the other of the founder of 24Seven. I personally wouldn’t want to let go of this, as I have 1,600 employees who work for 24Seven,” Modi said.


Despite Modi’s reservations, Godfrey Phillips confirmed its exit from the retail business in an exchange filing on July 31. The company’s retail division recorded Rs 403 crore revenue in financial year 2023-24, making up 7.6 per cent of its total revenue but had a negative net worth as of March 31, 2024.


Godfrey Phillips ceased operations of all 24Seven stores last week due to cash shortages. The chain had 90 full-format outlets and 40 kiosks, mostly in Delhi-NCR and Chandigarh, with some presence in Hyderabad.


The acquisition of 24Seven by The New Shop could consolidate and expand its presence in the Indian retail market, leveraging the established 24×7 operational model and extensive store network of 24Seven. With early backers like Huddle Ventures, Good Game Ventures, and Anthill Ventures, The New Shop is poised for significant growth if the deal materialises.

 

First Published: Aug 08 2024 | 10:57 AM IST