Premiumization, beauty sales aid Shoppers Stop's turnaround

“For years I heard people say department stores are not the in format, but we had a very clear strategy to drive around premiumization and create a differentiation around experience," said Kavindra Mishra, managing director and chief executive officer (CEO) of The K Raheja Corp.-backed multi-brand store chain, in an interview with Mint on Friday.

“We had a 6% like-for-like customer entry increase in our stores, and because we’re premiumizing, we are able to create a space in consumers’ minds. Many brands are only available through Shoppers. This means that within a given brand, the percentage of exclusive lines for Shopper has improved 300-400 basis points. Those are the building blocks we are working on. They have started adding value," he said.

The 111-store department chain had reported a 1% decline in footfalls in the year-ago period.

Shoppers Stop also runs 10 home-concept stores, a large beauty business comprising 84 beauty stores for brands such as Estée Lauder, M.A.C, Bobbi Brown, Clinique, Jo Malone London, Nars, Armani Beauty, apart from 78 stores for its value-focussed fashion brand Intune.

Its sales grew 10% year-on-year to ₹1,175 crore, with premiumization's contribution rising to 69% during the quarter. Its private brands, at ₹161 crore, contributed 13% to the overall sales and 17% to the apparel business.

Its Ebitda (earnings before interest, taxes, depreciation, and amortization) rose 11% to ₹173 crore. Average selling price (ASP) rose 6%, average transaction value (ATV) 8%, and items per transaction (IPT) 2%.

Core business revenue—comprising the department, beauty, home-concept stores, and SS.com operations—increased 7% to ₹1,346 crore during the quarter. Beauty sales surged 22% on-year to ₹331 crore, and Intune recorded a 170% on-year jump in sales to ₹70 crore.

The multi-brand retailer opened three beauty outlets during the quarter.

The results were broadly above estimates, said analysts at Antique Stock Broking Ltd.

“Revenue grew backed by premiumization and brand investments. Margin was maintained owing to cost rationalization; however, it was offset by higher brand investments during the quarter. After a couple of weak quarters for Intune, management highlighted sequential improvement with 1% like-for-like growth during 2Q," they said in a 20-October note.

Store revamp

The retailer has been investing in improving in-store experience with cafes, gaming zones, and kids' play areas at high-street locations to fend off competition and draw consumers to its stores.

Department stores, which sell a diverse assortment of goods and brands, have faced the onslaught of single-brand retailers, such as global fast fashion brands Zara, H&M and Uniqlo.

Competition from value formats has also intensified over the past couple of years, with more retailers targeting middle-income shoppers in both large and small cities. For instance, homegrown value format Zudio, part of Tata-backed Trent Ltd, too, has been expanding at a steady pace. As of March 2025, Zudio had 765 stores across 235 cities.

Recently, Aditya Birla Fashion and Retail Ltd announced plans to rebrand its value fashion format Style Up to OWND! to appeal to younger, gent shoppers. It plans to open 100 stores in 2025-26.

In the segment, Shoppers Stop's Intune sells at a sub- ₹999 price point with an average selling price of ₹400-450, focusing on young families, not Gen Z shoppers, Mishra said, commenting on the competition.

The company recently refreshed these stores with brighter facades, improved lighting, and refreshed merchandise on a weekly basis. “It’s still a very young brand—about 18 months old—so it will take time to build. But Intune is a growth business we’ll keep investing in, while Shoppers Stop remains the mothership that is generating cash for expansion," the CEO said.

The retailer plans to open an additional 15 Intune stores in the second half of 2025-26. To be sure, it missed the earlier guidance of 7-8 Intune stores in the September quarter, with only three new stores opened.

On a positive note, management expects double-digit growth to continue, led by a stronger festive and wedding season, according to analysts at Antique.

Shoppers Stop is also strengthening its premium portfolio by partnering with global labels, which typically partner with a retailer for a shop-in-shop format, rather than stand-alone stores. “We have launched New Balance, Asics, Armani Exchange, and Guess handbags, and will soon launch Boss and G-Star," the CEO said. “As we speak, we are talking to other players in the fashion and accessories space. It will be all premium."