Click to play videoNew Delhi: Some over 15,000 employees of retail chain Subhiksha have not been paid since October. The company is now offering two month salary in return for a signed undertaking from employees that they will go on leave without pay until May 31st.
“There are 15,000 people working in the company. Lots of salary arrears have happened. This is human tragedy that we have not been able to pay salaries. It is not the unwillingness. But the inability of the company to pay to the staff',” says MD, Subhiksha, R Subramanian.
Business is at a standstill. Subhiksha owes Rs 35 crores to suppliers, Rs 20 rupees in store rentals and another Rs 18 crore in back wages.
A total of Rs 300 crore is needed for Subhiksha to restart business. It is trying to raise money from existing and new lenders but that will take at least two months to materialise.
Ironically, Subhiksha cannot afford a complete shut down.
“There is no way that we shut down stores, we can never make profit if we shut down stores,'' MD, Subhiksha, R Subramanian.
Until recently, Subhiksha was a poster boy for the retail industry, with turnover up seven fold in two years. But with little cash left in its kitty, it now has its back to the wall.
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