Lifestyle retailer Shoppers Stop hopes to grow its beauty distribution business, Global SS Beauty, by 4-5 times over the next three to five years. Early success gave the retailer confidence in this newly launched subsidiary. Underlining this, the company announced on Monday, October 23 that it will invest Rs 5 Million in this business, in addition to the Rs 25 Billion it invested in April.
“We see a lot of benefits in continuing to invest in this category. Beauty contributes 15-16%, we want to increase this to 25% in three years. All Shoppers Stop categories are growing, but beauty is growing more than others,” he added.
Kassim said that this idea came to their minds during the COVID-19 pandemic, when the market was experiencing serious disruption. “We decided at the time that it was important to have the entire value chain, including availability, purchasing, etc. Also, moving to distribution will give you a long-term perspective and allow you to invest a little up front,” he added.
As of the second quarter of this financial year (Q2FY24), the beauty distribution business contributed Rs 23 billion in sales and achieved positive EBITDA. It works with approximately 20 retailers with 292 retail doors. The company expects to generate revenue of Rs 175-200 billion this financial year and Kassim says it is on track to achieve this.
While L’Oréal International division started by launching eight brands from Clarins and Earthi, the company’s biggest launch this quarter was NARS, a cosmetics brand from the stable of global beauty giant Shiseido.
Shoppers Stop signed this deal this March and is now officially launching the brand in the country, starting with two stores in Mumbai and Delhi. It also introduces the brand to the online and offline ecosystem of Sephora and Shoppers Stop. “We will have three large-format Shop-in-Shops in the Shopper Stop ecosystem and 10 standalone stores in the Sephora ecosystem,” Kassim said.
He added that Shoppers Stop is looking to sign two more boutiques, “ideally one in Mumbai and the other in Delhi”. “The plan for Year One is to have 13-15 stores across three formats in the first year, with a similar plan for Year Two. But India is a very progressive market and new formats may also develop. We will evaluate this together and decide on a call,” Kassim added. .
Global SS Beauty has also signed agreements with brands such as Armani Beauty, Prada Beauty and Valentino Beauty, whose launches are ongoing. Kassim said the company has also signed TUMI fragrances and skincare brand FRE. “We are in talks with a few more brands and will be back with news on that soon,” he added.
While the focus remains on high-end prestigious brands, Kassim said that they will be open to working with brands in the “masstige” segment in the future.
Kassim is now banking on macroeconomic developments for the beauty industry to grow this business. “Consumers are happy to spend, macroeconomic factors are positive. I think this will be a very strong business in the future,” he added.
(Edited by: Vijay Anand)