Shoppers Stop will shut or relocate unprofitable outlets and redesign some, as the nation’s largest department store chain seeks to spur growth by attracting young consumers who may have moved to fast-fashion rivals or online. Another challenge that Shoppers Stop and every other retailer is facing is the pressure from increasing discounts that e-commerce players are offering.
Govind Shrikhande, Managing Director said, “We have about 10% of our bottom stores that are not working, two of them we shut last quarter. We have a plan to cut down size or relocate, or shut down, three more stores. Eight old stores will go under redesigning. So, cost cutting itself should lead to about a 50-60-basis-point gain. The connect of objective communication has been missing and has been lost out in the clutter of sale. We haven’t really had campaigns for categories. We haven’t created a brand campaign in the last 24 months. We will have to bring in younger brands which will bring in the differential for the younger customers, and also keep on cleaning the brands that don’t make any sense today. What we are seeing is that non-apparel categories continue to do well and makeup and watches I think will help create further differential.”
The K Raheja Corp-promoted retailer, which operates 81 stores in 37 cities, is aiming to grow sales by 15% and profit by 50% in the financial year that starts next month. The company will also be investing heavily in brand campaigns and marketing. It will launch a new brand campaign in April, along with campaigns specific to various categories. Another objective is to drive sales through private and exclusive brands by making them more relevant to the youth.