
Shoppers Stop to expand affordable fashion footprint

Summary
Shoppers Stop plans to expand its value format chain Intune to 10 stores, targeting the lower-end segment of the apparel market in India. The new format will sell private labels and focus on affordable products for women, children, and men.New Delhi: Department store chain Shoppers Stop is set to expand its value format chain Intune to 10 stores from the existing three, to compete with major players like Trent’s Zudio and Reliance Trends, strategically targeting the lower-end segment of the apparel market in India.
“It is a small trial that we’re doing into that segment. The logic behind it is if you see the market, tier-2 and tier-3 forms the biggest part of the pyramid in terms retail sales, and if you add to it the unorganized market, it is over 70%. Now, in the last 10-15 years, we have seen the unorganized market moving into organized, typically at the bottom end of the pyramid. Hence, the opportunity for brands to grow in that segment is the prime driver,“ said Venu Nair, managing director and chief executive of Shoppers Stop, said.
In April-June, the firm opened three Intune format stores: two in Hyderabad and one in Mumbai. “It’s a few stores and we know that we need to do multiple stores for us to be able to establish the format, establish the product categories. The plan is to do 10 stores. The remaining will be opened in two-three months," Nair said during a post earnings interview with Mint.
Value retail typically finds favour with India’s middle-income consumers who aspire to wear branded clothes, but do not have a budget to buy established foreign brands.
The new format will sell private labels but not follow the Shoppers Stop format under which it also retails third-party brands. The outlets will also be smaller, focussing on affordable products for women, children and men. It will be 100% private label driven; and hence it plays into our private brand strategy, Nair added.
On Tuesday, the company said its profit after tax for the three months ended 30 June fell 41% from the year earlier to ₹13 crore, while sales grew 4% to ₹1,241 crore.
Apparel business saw a moderation and operating environment remains challenging, the company said added. For the near-term, retail will continue to witness rebalancing of price-volume growth equation and a gradual recovery in demand, it added.
Demand for apparel retail moderated since Diwali 2022, said Nair. It is broadly in line with the slowdown seen across other discretionary categories. Inflationary pressures are still persisting, and is being especially felt in the mass market segments, Nair added.
“Within the categories that we retail, what we did see was that beauty, non-apparel categories such as luggage, watches, etc. had good growth; apparel moderated. One thing to bear in mind is that the comparatives are against the first quarter of last year, which is when people were getting back to work and there was a surge in postponed weddings etc. So the consumption of apparel especially had zoomed. Comparing against those numbers is also what makes it look slightly moderated. But overall, I think the apparel story is strong and we expect demand to be fairly back to normal from the second half," Nair said.