Retail chain Shoppers stop is betting big on premiumisation to drive growth. The company recently opened a 50,000 sqft store in Gurugram which houses high-end brands like Michael Kors, Kate Spade and Coach. Over the last year, the company has been upgrading existing stores and opening new format stores to cater to different customer segment.
Shoppers Stop has set a target to open about 50 stores this financial year — 40 of these will be in the beauty space and 10 will be department stores. It will also be spending about Rs 150 crore as capex for this upgradation and new store launches.
“We have been opening new concept stores according to the affluence index of the cities. Shoppers Stop will still house brands at entry-level price points through the private brands,” said Rajiv Suri, MD and CEO, Shoppers Stop.
Over the last couple of years, private brands have helped the company rake in good growth and revenues. 12 percent of the company’s overall sales come through private brands space. In an effort to improve the brand mix, the company conducted a brand reshuffle — it exited 37 brands (17 apparel and 20 home) and added some other relevant brands.
This change in strategy comes in the background of a consumption slowdown playing out in India. “The festive season has been muted due to external circumstances. We should get to mid-single-digit same-store sales growth by the end of the year,” said Suri. In the quarter gone by, Shoppers Stop reported a muted revenue and a -1 percent same-store sales growth.
Shoppers Stop is also working on growing its omnichannel presence. Over a year after the Amazon deal, four of Shoppers Stop’s stores have become omnistores. The plan is to get that number to 20. Without disclosing exact sales via Amazon, Suri said, “Omnichannel makes up 3 percent of overall revenues and Amazon is part of that.”
First Published: IST