CHENNAI (Reuters) – Indian department-store chain Shoppers Stop 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 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, Arvind Fashions and Aditya Birla Fashion and Retail.
($1 = 83.6070 Indian rupees)
(Reporting by Praveen Paramasivam in Chennai; Editing by Janane Venkatraman)
