India’s leading retail company Shoppers Stop Ltd. has reported rapid business recovery in Q4 FY21. For the quarter, the company logged 90% of FY20 sales, the strongest recovery in the last four quarters.
The company reported Q4 sales at Rs 825 cr, reflecting a 10% YoY decline from FY20 and EBITDA at Rs 10.5 cr vs Rs.16.7 cr loss in FY20.
One of the most remarkable metrics was the 188% growth in omnichannel sales over the corresponding quarter of FY20. Private Brands volume grew by 38%, with the Beauty category outperforming with the start of make-up from mid-January.
“Gross margins improved by 189 bps with improved mix from Private brands. Private Brand grew by 11.5% (volume 38%) and its share to total business increased by 250 bps,” the company said in its earnings statement.
Operating efficiencies also improved with costs being lowered by Rs 43 cr in the quarter, it added.
Shoppers Stop MD and CEO Venu Nair commented, “Business recovery until Mid-March had been very encouraging. However, with surge in Covid-19 cases, we witnessed a drop in footfall resulting into drop in revenue.”
“Despite the Covid-19 impact, we had strong performances in all our strategic pillars. Our omnichannel sales grew by 188% (3X growth) and Private Brands’ volume grew by 38%,” he stated.
“Specifically, on omnichannel, our dream run continues. During the quarter, we did the first phase of the upgrade of the home page and continued to add new brands. We also improved our fulfilment parameters by changing the allocation logic which improved the Turnaround Time. We are investing heavily in this channel and have begun the second phase of the upgrade of our App, with a complete redesign of UI/UX, analytics and personalization,” Nair informed.
“Our success in transforming and revamping Private Brands continue to yield results. During the quarter, we launched performance wear and athleisure brand, ALTLIFE and INSENSE in the women’s sleepwear category. We have significantly improved our fashion quotient relevant to latest trends, besides upgrading the quality of merchandise. We have simplified the price matrix. Our customers are recognising the improvements that have been made offering great fashion and quality at affordable price points. This resulted in 38% volume growth, overall sales growth of 11.5% and increased share to the business by 250 bps,” he said.
The retailer’s loyalty programme First Citizens contributed 72% of the revenue, the company said, adding that it added 1,06,000 loyalty members during the quarter and as of March 31st, 2021.
“As on date, we have 7.8 million trusted Loyal Members. In our premium Annual Membership Program “Black Card”, enrolment grew by 172% — this is a subscription service at Rs. 4,500. We continue to engage with our loyal customers through our personal shoppers’ program. During the quarter, the personal shopper program contributed 14.7% (+80 bps),” Nair said.
Noting that store expansion was deferred due to the Covid-19 impact in FY21, Nair informed that the company plans to add 20+ stores across large and small formats in FY22. “The company is maintaining sufficient cash reserves to deal with any exigencies in coming quarters. We continue to remain debt free,” he said.
Shoppers Stop Ltd. operates 84 department stores in 44 Cities, as well as premium home concept stores (11 Stores), 127 Specialty Beauty stores of M.A.C, Estée Lauder, Bobbi Brown, Clinique, Smash box, Jo Malone and Arcelia and 23 Airport doors, occupying an area of 4.5 million sq. ft.