Fashion retailer Shoppers Stop said it has shut down 2 of its 91 shops due to lower-than-expected sales and poor profitability.
The shops that have been shut down are located at Orion East Mall, Bangalore, and The Grant Mall, Chennai.
It said it took the decision “due to lower than expected business” at the two locations.
The two stores, designed in the departmental store format, generated sales of around 17.5 cr each in the year ended March, or about 0.4% (each) of the total sales of the company. On average, a single Shoppers Stop shop contributes around 1% of the company’s revenue.
With the closure of the two shops, the chain now has 89 Shoppers Stop outlets, including five airport shops. It also operates over a hundred smaller ‘beauty doors’.
Shoppers Stop is one of India’s pioneers in the filed of organized retail, starting out with its first shop in 1991.
The chain, controlled by real estate businessman Chandru Raheja, has been churning its outlets due to an ongoing slump in India’s retail market, as well as a longer, secular trend that has seen shoppers move away from brick and mortar stores to online retailers.
For the three months ended December 2019, Shoppers Stop posted revenue of Rs 1,300 cr, up 3.1% from a year ago.
Even as it closes down unprofitable outlets, he company continues to open new outlets in promising locations. It threw open its sixth large-format store in Hyderabad’s Sarath City Capital Mall earlier this month.
For the current year, the company has plans to open a total of 12 department stores. It expects these stores, along with around three dozen beauty stores and airport outlets, to contribute annual revenue of around Rs 500 cr.
Unlike rival Future Bazaar, which operates chains such as Central and Brand Factory, Shoppers Stop tends to focus more on the mid-to-premium segment, offering brands such as MAC, Clinique, KIKO Milano, Bvlgari and Armani.
This makes it more susceptible to any economic downturn, as cash-strapped consumers typically switch to more value-for-money outlets during times of hardships and uncertainty.