04 September 2023, Mumbai

The K Raheja Group’s Shoppers Stop chain of department stores spanning pan-India has the unique distinction of being the first Indian brand in the department store segment in the country.

The first store was opened in October 1991 at Andheri, an affluent Mumbai suburb. Today, the brand has 166 stores spread across 62 cities and towns in 22 states and union territories.

However, India’s pioneer department store chain has hit a rough patch as indicated in Q1 2023 result. Profits are down by a whopping 46 percent to a mere Rs.14.5 crore. To make matters worse, Venugopal Nair, the CEO of Shoppers Stop suddenly announced his resignation on August 24 after which the company’s stocks plummeted almost 13 percent.

The company’s board of directors has also approved the promotion and appointment of Kavindra Mishra, the chief commercial officer and CEO of Shoppers Stop’s furniture retail store HomeStop, as the company’s Executive Director and CEO, following Nair’s resignation.

Intune to drive growth strategy

Conceptualized and nurtured by Nair, Intune is Shoppers Stop’s entry into the value retail space. Touted as the affordable retail format to attract consumers looking for lower-priced fashion clothing, this is perhaps Shoppers Stop’s response to the Zudio that Trent has undertaken already.

Currently, there are two Intune outlets in Hyderabad and one in Dombivali, a lower-end and distant suburb of Mumbai.

The growth strategy for Intune was revised just prior to Nair’s departure from opening 10 more stores across India in 2024 to opening 25 instead. In 2023, the plan is to add an additional 10 stores in Tier I and II towns, particularly focusing on the southern side of India. Intune is Shoppers Stop breaking the barrier of its premium positioning to attract a larger base of clientele.

Demand-based growth strategy for Intune

Intune is slated to go head-to-head with Reliance’s Trends and Trent’s Zudio. A well-analysed report showcasing the robust growth of value retail that is being primarily driven by lower-economic strata of Tier I cities and Tier II, and III towns across India, it was a no-brainer for Shoppers Stop to prioritise and nurture Intune’s growth.

As exciting Nair opined, the current trend of value retail gaining steadily is due to consumers imposing a curb on discretionary spending, opening up the opportunity for labels like Intune to fulfill the gap between need and want in the classic market situation.

Affordability

Intune’s pricing strategy is that the average selling price is between Rs 450 and 500, a segment that not only has a huge consumer base but is being served by the country’s unorganized apparel sector. Nair describes Intune products as awesome fashion at amazingly low prices. However, as Nair exits, the market is speculating if Intune can continue on its trajectory as per plan and bolster Shoppers Stop’s fortunes.

Nair seems positive his baby will break out by the middle of next year, which will be the brand’s first anniversary. However, skeptics aren’t sure as only 30 percent of the apparel market in India is under the organized sector and the value retail space has far too many players, all working towards cornering the Tier II, and III towns dotting the Indian landscape.

It is likely that the new CEO will stick to the well-laid-out plans and continue focusing on creating more efficient and smaller Shoppers Stop department stores in terms of space. It will also focus on SS Beauty and move forward with a premium mix of beauty labels, leveraging the big opportunities this sector presents.

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01 September 2023, Mumbai

Jack & Jones, a men's fashion brand under Bestseller, has inaugurated a new store in Kochi's Forum Mall, Maradu. Commemorating 15 years of operations in India, Jack & Jones originally entered the Indian market in 2008 with its first store at Oberoi Mall, Mumbai.

Background

Bestseller, the Danish parent company of Jack & Jones, established in 1975, oversees more than 20 fashion brands across 46 countries through 2,800 chain stores and 12,000 external multi-brand stores.

With over 313 exclusive brand outlets and a presence in 1,785 shop-in-shops, Bestseller India markets six brands including Jack & Jones, Vero Moda, and Only.

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31 August 2023, Mumbai

Swedish fashion brand H&M has opened its first store in Bihar, the first in the state's tier-2 city of Patna.

The store, located in the Christia Colony, Chajju Bagh area, offers a wide range of men's, women's, and children's clothing, as well as bags, shoes, and accessories.

Bharat

The opening of the store is a sign of the growing fashion industry in Bihar and the increasing demand for global brands in tier-2 and tier-3 cities. H&M is expected to draw a significant number of visitors to the store, providing them with access to the latest fashion trends.

The store is also a major boost for the local economy, creating jobs and generating revenue. It is a positive sign for the future of fashion in Bihar and a testament to the state's growing appeal to international brands.

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04 September 2023, Mumbai

Cantabil Retail India Ltd. recently unveiled its newest store in Hamirpur, Himachal Pradesh. The 27,000 sq ft. store, inaugurated on August 27th, features an extensive collection for men, women, and kids. A store manager, preferring anonymity, described it as a complete family shopping destination.
This marks Cantabil's third store in Himachal Pradesh, with previous locations in Dharamshala and Kangra.

Background

The brand, owned by Cantabil Retail India Ltd., has been a prominent player in apparel since 2000, expanding from men's wear to women's and children's clothing, along with accessories like perfumes, deodorants, and more.
With over 440 exclusive retail outlets nationwide and an online presence on platforms such as Cantabilshop.com, Amazon, Ajio, Flipkart, and Myntra, Cantabil continues its expansion efforts. Earlier this year, they launched ten stores in various states, solidifying their presence across India.

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01 September 2023, Mumbai

Uniqlo, the distinguished brand renowned for its ready-to-wear attire and flagship label within the Japanese conglomerate Fast Retailing, announced a significant development on Monday. The brand introduced Daisuke Tsukagoshi, aged 44, as the new Chief Operating Officer.

Role & responsibility

In this role, Tsukagoshi's primary responsibility is to provide crucial support to the founder and CEO, Tadashi Yanai, aged 74. Having been overseeing Uniqlo's global day-to-day operations since the previous year's September, Daisuke Tsukagoshi is set to take on multiple pivotal positions starting this Friday.

This includes assuming the responsibilities of Executive Director, President, and Chief Operating Officer at Uniqlo Co., the entity with oversight over all brand-related activities. Tsukagoshi also holds leadership in Fast Retailing's endeavors in North America, a region that witnessed the company's first-time profitability during the 2021/22 fiscal year.

Growth centric

With robust expansion plans for this region in the forthcoming years, the company's aspirations are significant. As of now, there's no official successor named by Tadashi Yanai, leading to conjecture whenever one of his key associates is promoted to a notable role.

Despite this, Yanai's two sons, Kazumi and Koji Yanai, have been active members of Fast Retailing's board of directors since 2018.

Background; It's worth noting that during this period, Yanai repeatedly dismissed any notion of establishing a family-oriented succession strategy.

Back in 2019, Yanai publicly conveyed his preference for a woman to eventually take the helm of his expansive business empire.

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31 August 2023, Mumbai

Spykar, the western wear brand, enhances its foothold in Jharkhand by inaugurating a new store at the Mall of Ranchi. The store exudes a youthful, industrial vibe with its grey metal and natural wood interior. It flaunts the brand's iconic denim line, encompassing both distressed and sleek options, along with graphic tees, flannel shirts, and seasonal outerwear.

Array

Nestled among renowned brands like Biba, Aldo, and Levi’s, Spykar joins Ranchi's Mall of fame. Managed by Pranami Group, the mall debuted in July, featuring an array of Indian and international brands.

In a parallel stride, Spykar extends its reach to Maharashtra, unveiling a fresh outlet in Sangli's Khot Empire at Chandani Chowk, housing its complete collection of casual wear for men and women.

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28 August 2023, Mumbai

The hosiery sector has come a long way from just providing bare necessities through innovations in fabric and knitting technologies. In 2022, the global sector including men’s and women’s hosiery was valued at $41.8 billion and is projected to reach $55.6 billion by 2030, growing at a CAGR of 3.6 per cent from 2022-30.

The US market is estimated at $7 billion, whilst China has forecasted a 4.9 per cent CAGR, with market size reaching $10 billion by 2030. Japan and Canada, each forecast to grow at 1.7 per cent and 2.9 per cent respectively over the 2022-30 period. Within Europe, Germany is expected to grow at approximately 2.9 per cent CAGR.

India charts new growth

Closer home, in India, the sector has a phenomenal performance lined up in India with growth expectations between 18 and 20 per cent year-on-year revenue, thanks to a revival of rural demand. The sector’s revenue is expected to touch around Rs 36,000 crore in fiscal 2024, according to CRISIL Ratings.

The operating margin will expand 300-400 basis points (bps) on softer input prices and improved capacity utilisations. The conclusion arrived after 28 hosiery manufacturers accounting for one-third of the sector’s revenue were analyzed and subsequently, CRISIL Rating published the report.

China’s hold over global hosiery

By the end of June 2023, China had already exported 256 million pairs of women’s hosiery to the US, capturing 67 per cent of the market. Moreover, women's hosiery imports from China exceeded the figures recorded by the second-largest supplier, Pakistan (47 million pairs), fivefold. The third position in this ranking was held by El Salvador (28 million pairs), with a 7.4 per cent.

Rural consumers have high impact on the hosiery sector

Last year the rural economies underwent hardship with rising inflation and lower agrarian incomes, This impacted the hosiery sector as 50 per cent of the sector’s consumers are rural and therefore the sector’s revenues dipped by 30 per cent in 2022.

CRISIL Ratings Director Rahul Guha states in the report that in 2023-24, urban demand will remain stable, while a well-distributed monsoon and probable inflation moderation should boost rural demand, leading to a recovery of 35-40 per cent in volume.

Unlimited opportunities

Potential export opportunities, especially to Gulf countries, could bump up the volume further. Capacity utilization had fallen to 60 per cent in 2022-23 but with improved market conditions, particularly rural India bouncing back, capacity utilization will be 90 per cent in fiscal year 2023-24. 

According to a senior CRISIL Rating spokesperson, not too many companies were taking up significant capacity expansion last year, and this resulted in long-term debt becoming minimal. Strong cash flows from higher revenue and profitability will be sufficient to meet incremental working capital requirements and keep overall debt in check according to the CRISIL Ratings expert.  The trade deal between the UAE and India would have significant growth for hosiery.

The sector aims to regain pre-Covid operating margins

As hosiery demand grows, manufacturers are pulling back and curtailing on advertising and marketing. Almost 90 per cent capacity utilization and good export prices are helping manufacturers gain back operating margins – at least by 12 to 16 per cent.

Notably, the Comprehensive Economic Partnership Agreement signed by the government with UAE could boost textile segment exports, especially hosiery. The agreement could add 2-3 per cent to hosiery exports from the historical level of 10 per cent.

Amid strong demand pull, manufacturers will curtail their advertising and marketing expenses. Increased operating leverage from higher capacity utilisations, will aid profitability. Hence, the operating margin will improve to the pre-pandemic level of 12-14 per cent.

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