The country’s oldest department store chain, Shoppers Stop, has launched a new affordable retail format called ‘Intune’ to lure consumers opting for low-priced garments and accessories, the firm said in its latest investor presentation.
Three stores — two in Hyderabad and one in Dombivali near Mumbai — have been launched since June, the company said, with three more outlets in the fit-out stage, implying they will be opened shortly. Clothes, accessories and footwear are priced at under Rs 500 a unit, making it an attractive proposition for consumers. “Intune is a ‘Fashion For All’ format, which is one of our strategic initiatives to cater to young families,” Venu Nair, MD & CEO, Shoppers Stop, said in an investor call on Tuesday. The move is timed to deal with a discretionary slowdown that has hurt apparel sales at the company, experts tracking the market said.
Nair admitted on the earnings call that the apparel segment in general has been witnessing moderation and that the value retail foray could help the company tap into the growing trend for affordable fashion and lifestyle products.
The move will also pit the company against Trent’s Zudio and Landmark-owned Max Fashion, said analysts at brokerage ICICI Direct, which are big players in the segment.
“The value segment is garnering significant attention from retailers,” ICICI Direct said in a note on Shoppers Stop on Tuesday. “The foray into the value retail segment will enable Shoppers Stop to have a presence in a fast-growing market and vast market to aid revenue growth. Zudio and Max Fashion are leading players here,” the brokerage said.
The department store chain reported a 36.5% year-on-year decline in consolidated net profit to Rs 14.5 crore in the June quarter, with revenue up 4.76% versus last year to Rs 994 crore for the period.
While its stock fell 5% intra-day on Tuesday, it settled at Rs 775.30 apiece on the BSE at the end of trade, up 1.76% versus the previous day’s close, as investors lapped up news of its entry into value retail.
For perspective, rival Trent is betting big on its value retail format Zudio to drive growth, prompting analysts to conclude that it could become bigger than flagship brand Westside in coming years.
At Trent’s FY23 annual general meeting held recently, the company said it would open 200 Zudio stores in FY24, much higher than estimated by analysts. In FY23, Trent had opened 117 Zudio outlets, taking the total store count of the brand to 352.
In contrast, Trent added only 14 Westside stores in FY23, taking the total Westside count to 214.
Unlike Zudio, whose average store size is 8,000 sq ft, Intune’s average store size is 5,000 sq ft, sector analysts said. Intune is also expected to use an omnichannel strategy to drive sales.