With footfalls recovering faster than expected post the COVID-19 second wave, Shoppers Stop has lined up aggressive growth plans for each of its business segments and expects to double its business in 3-4 years, Venu Nair, MD & CEO of Shoppers Stop, said.
Just as recovery was in sight in the first few months of 2021 for retail major Shoppers Stop with footfalls recovering to nearly 70 percent of pre-COVID levels, the more severe second wave forced stores shut yet again. But with stores opening again, consumers now seem more confident to come to visit stores and malls to shop, and that is helping footfalls revive much after the lows of the second wave, Nair added.
“Unlike post the first wave where we saw only mission-based shopping, they are spending time in stores, browsing, trying out clothes, and that’s very encouraging. And what was different this time was that we were trading online, omnichannel business continued to do very well and that helped us serve customers. From the learnings of the first wave, all stores were equipped for video shopping, personal shopper service, and could reach out to more customers through tele-calling and serve them through the second wave,” Nair told CNBC-TV18 in an exclusive interview.
The second wave also delayed the company’s store opening plan, but Nair said there is no change in how many stores it planned to open. With construction resuming, the company expects to open 10-12 department stores and 5-10 beauty stores by March 31, 2022. Of this four stores will open in the next 2-3 months, if not early, Nair added. As of Q1FY22, Shoppers Stop had 244 Stores across 47 cities.
The last year has also forced retailers to take a hard relook at costs and sharpen focus. Shoppers Stop said that the company too, relooked at costs and brought about operational cost savings of Rs 400 crore in FY21 and Rs 140 crore in Q1FY22 as compared to FY20.
On these lines, Shoppers Stop also exited its bookstore arm Crossword Bookstores and will now focus on its Omnichannel strategy, growing its private labels, its beauty business and its customer loyalty program First Citizen’s base.
“We’re a house of brands, have international, national and exclusive brands across beauty, apparel, lifestyle, home and accessories. This is our core business, and we want to focus on our core business over the coming quarters,” Nair added.
One of the major focuses of the company has been its omnichannel strategy, in a bid to also boost online sales, while also offering consumers the option of completing a purchase offline. While less than 2 percent of sales came from omnichannel in FY20, this number stood at 6 percent in FY21. In Q1 of FY22, which saw the second wave at its peak, sales from the channel went up to 18 percent. But this is not a true indicator, Nair said, because most stores were shut in the quarter.
Another area of focus for Shoppers Stop is its private labels business. The company has private labels in women’s wear, men’s wear, kid’s wear and beauty, having recently launched brands such as Arcelia in the beauty segment, Bandeya in the ethnic men’s wear segment and Alt Life in the athleisure segment. Shoppers Stop is also working with several national brands it houses to launch exclusive lines.
“Each brand has a sharp focus on the lifestyle segment it's catering to. Saw athleisure was a segment growing massively and so we launched Alt Life to cater to activewear, sportswear, etc. With Kid’s segment also seeing the biggest growth in the past year, we re-launched the kid’s daily wear brand Karrot. Going forward, we will look at brands that cater to a lifestyle need,” Nair added.
The expansion in this segment will also see the company launching a direct-to-consumer brand Infuse this month, which will be available only on shoppersstop.com and Amazon.
Private labels currently contribute 14 percent to the business, and Shoppers Stop aims to grow this to about 20 percent in the next couple of years, and is also looking to more than double the private labels business over the next 12 months.
Shoppers Stop also has similar plans for its beauty business, which currently contributes 19.2 percent to the overall business. Shoppers Stop, which currently runs brands such as Mac, Estee Lauder, Clinique in India, plans to launch 50 new brands in 12 months, while doubling its online business. Last quarter it launched Kenneth Cole and Vince Camuto in this space.
“We are already market leaders in physical stores in beauty. We are well on target to launch 50 new brands in 12 months and are seeing very good traction in each of the beauty segments. These brands will cater to the mass and luxury segments, and the opening of the 5-10 physical beauty stores will give us an extra opportunity to grow.
After a year that proved to be a washout for the retail industry and despite concerns looming of a possible third wave, with the aggressive growth plans Shoppers Stop has lined up, Nair said, the company has budgeted for these growth plans and expects to be debt-free by December 2021. While Nair said the company was debt-free as of March 31, 2021, its net debt in Q1FY22 stood at Rs 98 crore.
“We are in a financially healthy position, and that gives us confidence in our investments and planned expansion. Looking slightly ahead, given the size of the market, our brands and the 8-million First Citizen base who bring in over 75 percent of sales, we expect to double business in 3-4 years. That’s the opportunity we see in the market,” Nair added.