NEW DELHI: Shoppers Stop, India’s oldest department store chain, plans to enter luxury retailing with large-format standalone stores that will sell brands such as Gucci and Louis Vuitton, one person aware of the company’s plans told ET.
The new format will also house the Aditya Birla Group’s luxury store The Collective, the person said.
The company plans to launch two luxury outlets this fiscal year and one of them could be in Kolkata, the other in Mumbai, the person said.
Shoppers Stop declined to comment. Since its inception over three decades ago, Shoppers Stop has been mostly selling merchandise for the masstige or bridge-to-luxury segment. The decision to foray into luxury retailing comes amid a spike in the number of wealthy people in the country. “For us, premiumisation is not just selling luxury products…but (if) a person who used to buy from the roadside has now started buying from the mall, (that) is also a premiumisation,” Kavindra Mishra, managing director and CEO of Shoppers Stop, had told ET last month.
Major Players
“People are upgrading and this is happening across segments,” said Mishra.
Reliance and the Aditya Birla Group are the existing major players in luxury retailing in the country, having partnered with over 50 luxury brands.
“The biggest challenge for luxury brands is availability of retail space,” said Shriram PM Monga, cofounder of retail consultancy firm SRED. “Most of these (luxury) brands have this clause of presence of similar brands to create a luxury retail environment in order to not compromise on the customer experience. In India, there are only a few malls dedicated to luxury brands but the market is huge,” he said.
As per a Bain & Co report, India’s overall luxury market is expected to reach $85-90 billion by 2030, propelled by a rising number of ultrahigh-net-worth individuals (with net assets of $30 million or more), growing entrepreneurship, a strong middle class, greater penetration of ecommerce, and demand from tier-2 and -3 cities.
The premium and bridge to luxury fashion market in the country is currently valued at $7.86 billion. Global luxury brands are bullish on the Indian market and are eager to enter and expand in the country, the report said.
Shoppers Stop is targeting 55% contribution from premium brands in the current fiscal, up from 47% in FY24.
During the last fiscal, Shoppers Stop reported a 3% growth in revenue, largely led by non-apparel segments, particularly beauty and home categories, and store expansion.
According to its annual report, the company’s strategic emphasis on premiumisation, evidenced by its focus on premium products and expanded store network, aligns with industry trends towards more discretionary and luxury spending.
With 55 new stores opened in 2023-24, Shoppers Stop has invested significantly in footprint expansion, with a capital expenditure of Rs 246 crore.
Additionally, it renovated 13 stores, including seven department stores, five beauty stores, and one HomeStop, bringing 71% of its department stores under its new brand identity.
