India's Shoppers Stop swings to quarterly loss on demand slowdown

Shoppers Stop

18/07/2024 14:28

CHENNAI, July 18 (Reuters) - Indian department-store
chain Shoppers Stop  SHOP.NS  swung to a quarterly loss on
Thursday, its first in nine quarters, as high inflation weighed
on consumer spending on discretionary products, including
apparel and beauty products.
    India's retail inflation rate hovered around 5% during
April-June, mostly due to high food prices, tending to lead to
lower non-essential spending. Moreover, analysts pointed to
fewer wedding days than usual for sluggish spending on apparel.
    "The industry witnessed subdued consumption due to prolonged
heat wave, elections, fewer weddings and inflation," Shoppers
Stop CEO Kavindra Mishra said.
    The retailer, which sells ethnic and Western clothing,
reported a net loss of 227.2 million rupees ($2.72 million) for
the first quarter ended June 30, versus a profit of 144.9
million rupees, a year earlier.
    Revenue rose 7.6% to 10.69 billion rupees, slowing from a
13.3% growth in the January-March quarter.
    The company said it is closing a few "unviable" stores as
part of its recovery plan, without providing details. However,
it is doubling down on its fast-fashion-focussed brand, Intune,
raising its store-opening target to 80 for the year ending March
2025 from 60.
    Shoppers Stop followed in the footsteps of rival Trent's
 TREN.NS  Zudio chain of stores and launched Intune last year to
attract young consumers looking to regularly refresh their
wardrobes on a tight budget.
    Such stores have been a rare bright spot during a
discretionary slowdown, proving a hit among consumers who
typically shop at unbranded outlets.
    Still, Shoppers Stop forecast better days ahead, expecting
"stronger demand during the festive season, driven by lesser
disruptions and more weddings".
    Shares closed marginally lower ahead of the results, still
clocking a near-19% increase for the year.
    Shoppers Stop is the first of the apparel retailers to
report quarterly results. Its better-known rivals include Trent
 TREN.NS , Arvind Fashions  ARVF.NS  and Aditya Birla Fashion
and Retail  ADIA.NS .

($1 = 83.6070 Indian rupees)

 (Reporting by Praveen Paramasivam in Chennai; Editing by Janane
Venkatraman
)
 ((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))