Venu Nair was quick to admit that a new strategy had begun to take shape at Shoppers Stop Ltd, the apparel-and-beauty chain of which he has been chief executive since November 2020, by the time he joined. “I just sharpened it and ensured complete focus and execution of the same,” he told The Ken over coffee at a seaside hotel in suburban Mumbai on a Monday morning.
And investors have lauded the turnaround in the 32-year-old company’s fortunes.
Since Nair took the helm, Shoppers Stop shares have surged almost 4X in value—outperforming the 2X rise in Tata Group’s Trent Ltd, which runs the Westside clothing chain, and the 1.5X increase in Aditya Birla Fashion and Retail Ltd, which operates the fashion brand Pantaloons, in the same period. Making the rally sweeter for Shoppers Stop is the fact that it hit an all-time high in October 2022.
This is a reflection of changing perceptions about the company.
“Shoppers Stop has always been a case of strategic interventions,” said Varun Singh, a retail analyst with the brokerage ICICI Securities. “But they started losing customers to [multinational retail chains] Marks & Spencer and Zara, which operate at similar price points.”
In the two years from April 2017 to March 2019, Shoppers Stop’s same-store sales same-store sales Same-store sales Same-store sales is a business term that refers to the difference in revenue generated by a retail chain's existing outlets over a certain period, compared to an identical period in the past, usually in the previous year. —a key metric for retail stores—grew 2-4% annually, while Westside’s rose 9%.
While Westside runs circles around Shoppers Stop, the latter has also begun to find its rhythm again. Shoppers Stop’s same-store sales in the three months ended December 2022 grew 16% over the same period in 2021 (and 1% over pre-Covid levels). The company expects to grow year-on-year in the mid-to-high single digits.
Pivotal to this growth is the experience of visiting the company’s store. The company now renovates its outlets every five-six years instead of its norm of once in nine-10 years until 2021. With three-quarters of Shoppers Stop’s revenue coming from the 8.7 million members of its loyalty programme, it cannot have stores looking the worse for wear.
But that alone may not be enough to outgrow its peers: Shoppers Stop needs to find new catchments, for there’s only so much footfall existing stores can attract.
“The first test for a retailer is whether you are committing more money to expansion. And Venu has accelerated store addition,” said Singh. Shoppers Stop has added 10 stores since April 2022 and will set up two more this month—the highest number of stores it has opened in a financial year—taking its total to ~100.
