Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Shoppers Stop Limited (NSE: SHOPERSTOP) Q4 2026 Earnings Call dated May. 06, 2026
Corporate Participants:
Pranay Premkumar — Dentsu One Investor Relations
Kavindra Mishra — Managing Director and Chief Executive Officer
Karunakaran Mohanasundaram — Customer Care Associate, Chief Financial Officer
Biju Kassim — Chief Executive Officer of Beauty
Analysts:
Unidentified Participant
Tejas Shah — Analyst
Unidentified Participant
Sameer Gupta — Analyst
Unidentified Participant
Unidentified Participant
Devanshu Bansal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 and FY26 earnings conference call of Shopistop Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchtone phone. I now hand the conference over to Mr. Prane Prem Kumar from Dentsu One Investor Relations Team. Thank you.
And over to you, Mr. Prem Kumar.
Pranay Premkumar — Dentsu One Investor Relations
Thank you, Michelle. Good morning and thank you all for joining us on The Shopper Stop Q4 and FY26 earnings conference call. Today we have with us the senior management represented by Mr. Kavindra Mishra, Customer Care Associate Managing Director and Chief executive officer and Mr. Pankaj Chaturvedi Kaptamukh, Associate and Chief Financial Officer. We will begin the call with the opening remarks from the management after which we will have the forum open for the interactive Q and A session. I must remind you that the discussion in today’s earnings call may include certain forward looking statements and must be viewed therefore in conjunction with the risk that the company faces.
Please restrict your questions to the quarter performance and to the strategic questions. Only housekeeping questions can be dealt with separately with the IR team. I would now request Mr. Kalindra Mishra for the opening remarks. Thank you. And over to you sir.
Kavindra Mishra — Managing Director and Chief Executive Officer
Thank you, Pranay. Good morning all. I am joined on the call along with Biju in addition to my colleagues from Finance team Pankaj, who’s our new cfo JP and Rohit. We have uploaded the investor presentation on our corporate and stock exchange website. Let me start with talking about the key highlights for the year followed by highlights for the quarter and subsequently on the current operating environment and our focus for the coming financial year. The departmental store business crossed 5,000 crores revenue for the first time which is a big milestone for us.
At the start of the year we had given a guidance of mid single digit LFL and I’m very happy to share that we ended the year with a 4.7% which is our highest level LFL in a decade. Particularly after two consecutive flattish LFL sales for FY24 and 25. We reversed the continuous decline in customer entry by recording 3.8% customer entry growth in like for like stores. Which augurs well for us in terms of our premieration strategy. We had the highest ever additions to our first season loyalty program with 9.4 lakh new recruits.
The premium end of our loyalty which is our Black card program has reported the highest ever 67,000 new recruitments and highest ever renewals of 66,000 with the renewal rate being impressive 74% demonstrating deep value proposition from customer perspective. Besides, personalized service standards helped us to increase the loyalty base at 13.5 million and the total contribution during the year was at 84% with a repeat rate of 69%. Both the above have helped us to move the penetration contribution in stores by 3.6%.
Now we are at 69% and the ABV for the year has gone up by 7%. Showing core operational strength. Our personal shopper program which is central to our exponential retail Strategy recorded a 4% increase in contribution this year, taking the contribution up to 26% from a 22% last year. Sales generated through personal shoppers grew by 24% and it touched 1,257 crores of revenue last year. Overall, non apparel’s business continues to outperform Falling Non apparel power categories posted robust growth which has helped us in driving overall growth and optimization.
Watches grew by 16%. YoY we sold close to 6 lakh watches during the year which translates into 70 watches sales per hour. Similarly, fragrances grew by 12%. YoY we sold close to 12.1 lakh units during the year which is equivalent to selling one hundred and fifty units of fragrances every hour. Handbags grew by 10%. YoY we sold 4.7 lakh bags which was approximately 60 bags per hour. Now let me talk about the private brand business. Private brand business continues to be a key strategic pillar in terms of offering differentiated range and covering the gaps for set of categories.
It had a very good performance in terms of profitability driven by improved productivity, lower discounts and premium. During the year we reduced the inventory by 40 crores. We’ve also identified additional spaces in the box and categories where private brands have a role to play. We believe that men’s ethnic, Western womenswear, women’s Indian wear and Kids wear are categories where private brands have got a very important role to play and hence we are expanding current brands like Kashish and Mandeya.
We also have just launched Fatty Girls, a premium apparel line for young girls which is now expanded to 69 stores. We will continue to elevate the product offering to higher mix of premium and natural fabrics, enhanced design language and styling and switch launch of prevailing trends. Let me talk about the beauty business. The company’s beauty business including Globalss beauty delivered revenue of 1,281 crores during the year testing a healthy year on year growth of 17%. We deeply engage with customers through social media interactions, makeovers and master classes revolving around expression, engagement and education to drive consumption.
Beauty category followers base crossed 1.6 million on Instagram and 440,000 on YouTube. Our beauty distribution business continued its strong growth trajectory generating revenue of rupees 426 crores which is equivalent to rupees 650 crores of GMV with a stellar 81% growth by OI and delivering a 3 year CAGR of 90% which makes us which would make us the largest beauty distributor in the country. During the year JSSB introduced 20 plus new and exclusive premium brands to the Indian market, strengthening its premium beauty portfolio and further differentiating its value proposition to name a few.
In full line brands we had Shishido and Serge Lutens. In fragrances we launched Versace, Michael Kors, Steve Madden, Mobla and Tory Burch and in SkinScare we launched CISLay. During the year we launched one boutique store each of Armani and Naas taking the total number of premium boutique stores to seven. The performance underscores beauty as a strategic pillar for shopperstock, aiming high growth through strategic partnerships, digital acceleration and store expansion. Now let me talk about the Intune business.
Intune had a slow start however with focus on improving productivity and unit economics over the past two quarters have helped us stabilize the business and position it for sustainable growth. Key call outs for the Intune for the year we recorded a revenue of 282crores which was a growth of 46%. YoY we opened 14 stores during the year. Total store count NOW stands at 84 stores across 39 cities. Relentless focus on inventory freshness through in season clearance Online accessibility helped us to reduce inventory by 36 crores.
IOI through structured CRM outreach we were able to drive improvement in key KPIs repeat customer mix improved from 35% to 45% and items per ticket sustained at 3.8. During the year we have seen a turnaround in LFL trajectory from February 26 onwards. April also continues to see a LFL momentum in Intune. Now let me talk about the E Com business. During the year the company invested in technology to upgrade both UI UX with a mandate to have robust omnichannel experience. As we speak, large part of the investments have already taken place and in this financial year focus will be on scaling volumes and improved profitability with improved customer in phase.
For the month of April 26th we have seen a 60% growth bioi driven by improvement in conversion. In this journey. We are also planning to integrate SSB.in into SS.com as a micro site to sweat marketing investments favorably. Now let me talk about store expansion and financial discipline. We maintained a disciplined and prudent capital allocation approach during the year with a strong focus on driving returns and strengthening the balance sheet. I’m very happy to state that because of strong operational efficiency we were able to generate the cash from operations of rupees 301 crores.
This is the highest in last 8 years supported by working capital optimization of rupees 155 crores. During the year we opened 27 stores, 8 departmental stores, 3 beauty 2 homestock, 14 intune and we renovated 3 stores including a Juhu store with state of the art design offering premium and accessional assortment. The capital investment of Rupees 114 crores. The total inventory optimized for the year was 153 crores. Shopperstop has also made focused investments across infrastructure, network and security delivering tangible business and operational outcomes.
These include the highest NISD maturity score, Indian retail which is 3.6, early adoption of DPDP compliance and a material reduction in system outages and service ticket volumes resulting in 100% uptime and system availability. Now let me talk about the highlights for Q4. Let me address the departmental store business first. The departmental store recorded a 4.6% like for like sales growth despite a challenging environment marked by global disruption. Operational KPIs continue to improve with the ATV or average build value going up by 8% and the ASP growing up by 11% and most importantly the customer entry which grew by 3.2%.
Like for like and we are seeing a consecutive 3/4 of LFL customer entry increase. We continue to strengthen the emotional connect with customers through our proprietary Gifts of Love brand ip. The Valentine’s Day campaign under this delivered strong customer engagement and traction which has reached which has which has had a reach of 165 million and a view of 282 million. Non apps category reported 13% growth reflecting consumer preferences for premium offerings. Also it’s a reflection of our strategy which pivots a lot around non apparel.
We opened four departmental and one home stock during the quarter. We launched several new premium brands during the quarter and just to name a few we launched Bom and Mercier. It’s a premium Swiss brand with average ASP of 1.5 lakh in watches. We launched Brooks Brothers, Juicy Couture, Hugo Boss, Charles Trivet. We also launched Veneers and Crystal Bohemia in home category. The core business which is a departmental store business delivered an EBITDA of rupees 50 crores up by 52% YoY. It excludes the one off gain of rupees 22 crores recorded last year from the reversal of excess prior provisions.
Let me talk about the beauty business now. The total beauty segment recorded revenue of 309 crores which grew by 17% YoY led by fragrance which grew by 37%. Overall contribution of beauty now stands at 21% of the revenue. The SSB recorded revenue of rupees 114 crore which is a 69% YoY. In sustaining the growth momentum, we onboarded several new premium brands as well and we added 20 new points of sale. Right now the total presence is 565 points of sale across 27 retailers. Now let me talk about Intune.
Intune recorded a sale of 67 crores which grew by 24% YoY. Improvement in sales trend witnessed from February onwards is what we have seen and the momentum continues. In April we introduced a new price point of Rupees 1,299 across the categories and initial response is very encouraging. On gross margin side we have seen improvement quarter on quarter led by improved intake margin and lower discounting. We opened four Intune stores during the quarter. Now let me address the current operating environment and then I will talk about the way ahead for business.
We have seen a pickup in demand from mid February and it sustained through April as well and it’s sustaining in the first few days of May. Strong wedding calendar, growing local travel and general buoyancy economy are the favorable triggers to demand in coming quarters. Having said that, we do foresee a challenge on two fronts. First one being on fuel price and raw material LED inflation which may impact demand and short term. As shopperstop is already into Premiership journey, we expect the impact to be relatively limited compared to mixed segment players.
Second is the supply chain uncertainties. They may cause some intermittent disruptions in merchandise availability, particularly in H2. However, given our diversified sourcing and scale, we are confident of effectively managing and mitigating this risk. We head off for business. I think the first important thing is we are going to double down on premarition as the strategy has started delivering results on ground for us as we speak. We have become the first port of call for almost any premium brand coming to India and we are using this trend to work with strategic partners to drive business so continuously working on the brand mix and churn and make space for high performers is the key focus on generating consumer walk ins.
One of the big wins for us last year was the increase in customer entry and we are investing in building on the same both through brand marketing as well as loyalty. Our investments in partnership with HYBE is one such effort to do differentiated programs and get a new audience coming to shopperstop drive expansion of the brand in key markets in premium malls. I’m delighted to share that our repositioning efforts have started yielding results and we are increasingly becoming the departmental store of choice with some of the leading mall developers.
We plan to add nine departmental stores during the year Renovation of Marquee Stores we have seen with both Inorbit, Mallard and Juhu that once we renovate our marquee stores the throughput really increases. We have seen an amazing uptick there and we will be renovating five stores this year with our new premium identity and all these are marquee stores. Let me talk about intune. This is the year where we will be able to see major improvement in intune business driven by improved productivity, gross margin expansion and tightening the cost base.
We have come out of the inventory issues and overall EBITDA loss should be cultivated to half of FY26 loss. Our focus will be on driving efficiencies and turning around unit economics of existing stores in H1 and therefore we shall evaluate thereafter we shall evaluate expansion. We are also in putting investments in technology and we are right now piloting RSID for intune stores. We are looking at breakeven at business level in intune in FY28. Let me talk about the investments and the cash flow in FY26.
We have been able to generate high operating cash flow with tight controls on working capital and have retired 109 crores of debt. On similar line we will continue to focus on high internal accruals in FY27 through falling initiatives, strong surge in profitability driven by LFL growth and productivity improvement, rationalization of losses from new businesses and I spoke about them in my speech. Tight control over costs and continuous working capital optimization. These internal accruals shall be utilized towards investments toward growth.
I think opening of new stores is essential and we are in the process of opening some very marquee stores and refurbishment of our top stores. I think that’s super important for us. Additional capital infusion to enable beauty distribution business growth and we will be debt free by Q4FY27 which I think would be a Major plus for us over the last two years. Unfortunately, demand is not there today in the call because of some personal exigency. So I would be addressing any queries, if any, about intune.
My speech is over now and we can now open the floor for interesting Q and A session. Thank you.
Questions and Answers:
Operator
Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and one on the Touchstone phone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sameer Gupta from India Infoline.
Please go ahead.
Karunakaran Mohanasundaram
Hi, good morning everyone and thanks for taking my question. Firstly sir, I’m looking at the core business in FY26 and the EBITDA margin on a gross sale or non GAAP sale that you record is around 4%. This is in a year of a 5% LFL and strong cost control exercised over the years. Now we have had a guidance of a high single digit margin for this business. Just wondering that we would still need like three, four years of sustained LFL to be in that ballpark. Are there any other levers that can result in better margin performance like in the foreseeable future or this is a correct thesis or correct assessment.
Kavindra Mishra
So I think. Sameer, thanks for the question. No, you are right. I think it will take a couple of years for us to reach there. Having said that, there are a lot of initiatives in terms of, you know, we have shut around seven stores last year. We are in the process of premiumization. I think there are a lot of projects which we are driving to ensure that the Gymrock for us grows substantially. So while I think it might take a couple of years. But the general direction is what we are focusing on. Just to give you a sense, when we looked at our our business and our spaces dispassionately there are a couple of categories where we believe and for example I spoke about, I did speak about home but for example home within Shopper Stop we have identified in the box there are certain spaces where we can release it and we can use it more efficiently for national banks.
That’s what we are doing. Similarly, we are driving a heavier non apparel mix because I think watches is something which is really firing well for us along with fragrances, beauty and handbags. So I think we are, as we premiumize, we will see the journey Becoming faster. Having said that, I think two years is a fair assumption.
Karunakaran Mohanasundaram
Got it sir. Thanks. Thanks for that detailed answer. Second question is on the gross margin. Now I look at it again on non gaap sales it is down 100bps this quarter for the full year. Also if I look at it, it’s down 60bps. Just wanted to understand what driving this and is in a way the higher lfl is it linked to the margin weakness in the gross margin line?
Kavindra Mishra
I think this is more to do with. So we did mention about the one off in the gross margin case. Right. So that one off was coming from the margin. Because if I talk only about the operation operational I think we have. There’s. There’s a positive movement. If I just look at bayou and I just remove the operational as in the one off here actually the gross margins have improved by. By 50bps. Why you don’t foresee or why don’t you see in the. In the PNL is right now it is colored with a one off. Yeah.
Karunakaran Mohanasundaram
So what is exactly this one off? Sorry, I. I probably missed it.
Unidentified Participant
Yeah. So Panka, this side. I’ll just take this. See this one off is nothing but on account of you know, prudent accounting we’ve had some provisions, you know in our cogs side and last year when after due assessment when we didn’t need this provision, you know we did the unwinding that was bit significant last year. It’s a very normal thing that happens year on year, you know, providing for certain items and then unwinding. But since last year it was bit more significant. Hence you know we are just calling this out.
Karunakaran Mohanasundaram
Oh, it’s a provision write back in the base.
Unidentified Participant
Absolutely. Oh,
Karunakaran Mohanasundaram
Okay. Okay. Okay. Okay then then that, that. That settles it. Lastly, if I may squeeze in you. You did mention the.
Kavindra Mishra
Sorry.
Karunakaran Mohanasundaram
Hello. Can
Kavindra Mishra
I address your first question with some more detailing? So while the gross margins is that journey is there but I think EBITDA you will see a lot of improvements because as I have detailed through my presentation, lot of cost initiatives have been triggered in. So you will see substantial improvement in the ebitda. Right, so just to close the whole loop on this. Yeah,
Karunakaran Mohanasundaram
Sure. But you still will say that two years is a fair assumption on. On the high single digit margin expectation with the cost initiatives. Right? Okay, sure. So last question if I may squeeze in. You did mention on the guidance on department stores but I missed it on intune. Can you. Can you like elaborate your plans on the expansion on this front?
Kavindra Mishra
Sure. So in, in the Case of Intune as I mentioned, right now we are not looking at opening stores in H1. I think we have just got out from all the operational issues and inventory issues in Intune right now. The trajectory is very positive. I want that to be happening for the next two quarters before we start opening intune stores again. So the focus, the investments on intune remain. But I just want this year to be a cleaner year where we are able to build operational efficiencies and build the throughputs from the store before we move ahead.
Yeah.
Karunakaran Mohanasundaram
So fair assessment that it is still a work in progress for us and we are still assessing the strategy here. I mean it’s fine to wait but will that be a fair assessment?
Kavindra Mishra
Sameer, it’s a two year, it’s a two year old business. Okay. Any two year old business will have some double in shopper shop after 31 years is a work in progress business because you change the thing customers change. So I think it was but natural that it, it is a work in progress business. Having said that whatever steps we had to take to get the product, to get the operations, to get the store learnings, I think they are in place. We just need to ensure that we drive the efficiencies. I mean all businesses are work in progress.
I don’t think there is any harm in committing that because that’s how the nature of business is. Customers change, market change.
Unidentified Participant
Our presentation wherein we are specifying new venture performance update and look at Q4 specifically for the new ventures. So while on a four year basis the negative EBITDA has increased. But if you look at Q4, you know the negative is flattish. So somewhere that negative EBITDA declining has been arrested. If I can give a bit more color to that. So Q4 if you look specifically on the new ventures which includes Intune, that has been quite positive for us.
Karunakaran Mohanasundaram
Sure sir, but the problem is that if we don’t add stores, competition is still adding at a very high pace and we may just play catch up in this journey then. So that, that is the concern. I understand every business is work in progress but I think that’s a lot humble commentary from your side. But yeah, best of luck.
Kavindra Mishra
Sorry I didn’t get. I mean,
Karunakaran Mohanasundaram
I mean if you’re like not adding stores and competition keeps adding you, you’ll probably, you know just be playing catch up here. That is the worry.
Kavindra Mishra
No, no, don’t worry Sameer. We are cognizant of what the market is doing and competition is doing. We are also aware that we need to do things in the right way. We are also aware that, you know, we need to get the unit economics right. And once the unit economics are right, then the expansion, the expansion is one of our strengths. With our ability to. And the resources which we have and the presence which we have. Opening of stores is the least issue. The ability of the stores to give the throughput and provide profitability.
I think it’s very, very important. It’s a capex light model. I don’t think that that is any issue for us. For us the focus right now is to get this and I think we are on this journey. So maybe and you know, a very similar discussion used and not in case of. Not with you but it was happening with private bands when I had just taken over and we said that it takes two to three quarters to put the product, all the things right and once it starts happening then you start seeing the growth. So I’m pretty confident that we will deliver it.
So we are cognizant of that. We are aware and we will work on it. So don’t worry on that. The market is so vast that there is huge space for everybody provided the business models are right.
Karunakaran Mohanasundaram
Sure, sir. That’s all from me and thanks and all the best for the future.
Kavindra Mishra
Thank you. Thanks Amir.
Operator
Thank you. The next question is from the line of Pedra Shah from Evan de Spark Institutional Equities. Please go ahead.
Tejas Shah
Yeah, hi, thanks for the opportunity. I will just start with the question where the previous partition left. So you said that we’ll be kind of waiting and consolidating on intunes for next two quarters. So just wanted to know what will be. What will you qualify as a success in next two quarters for us to again go back on that expansion mode.
Kavindra Mishra
Yeah, thanks Tejas. I think the fundamentally the SPSS is the space productivity is what we call them is something which we need to see a incremental number there. I think we are very sure about the margin expansion because that’s happening correctly. The, the SPSSF it should go up by another 25 to 30% for us to be confident and that not in one or two months but couple of quarters. I think that’s something which we are working towards and that’s the number we are looking at.
Tejas Shah
So integrity 35, 40%.
Kavindra Mishra
25, 25, 25, 30%
Tejas Shah
And then what will like what are the interventions we are making to achieve that?
Kavindra Mishra
Oh, so I think there are multiple interventions right from the freshness in the stores which ensures that the product is not or you know, so weekly deliveries, freshness in the stores, operational changes, making the stores little lighter in inventory, improving the quality of the staff. I think the interventions have done have been made across the board. Also as I mentioned we have just tested out a line at 1 to 99 line which is delivering at least 4x of the profit of the. Of the throughput which a normal line does because at the project is really elevated.
So I think the intervention is happening across the board to drive that.
Tejas Shah
Yeah, sure. Just to elaborate on that. So what is the problem statement there? Is it that the brand has got the traction, footfalls are happening and we are not able to convert because of merchandise? Or is it that footfall itself is an issue and hence we need to work on brand also to kind of get the traction going from the footfall itself.
Kavindra Mishra
So if I divide this. I think it’s a great question, Tejas. First of all there are two parts to it. What we are seeing is that the person who is coming and shopping the conversions are very strong, the ipts are very strong and the repeat rates are very strong. Right. I think the brand is still very new in its journey. So we are spending money on marketing. We have built the CRM muscle. What The CRM muscle which we have in shopperstop. We are building the same for intune as well. Both in terms of ability to reach out to the customers with new lines.
So I think that’s the journey and that’s why I’m saying this will take this year to. For the. For the customers to become, you know, coming back again and again. So I don’t think the issue is on the product or conversion or anything. It’s just. It’s a very nascent brand. It will take time to settle in. I think that that’s where we are right now.
Tejas Shah
Perfect. The second very hearty performance on premiumization and then watches also. So just wanted to get some insight that in a year where urban job creation right from it has been under pressure how to reconcile and obviously your customer might not be only from it, but how to reconcile this premiumization trend. Any one offs any base effect there and do you see that kind of stretching or extending to FY27 and beyond?
Kavindra Mishra
No, I think. I think we should also meet one on one. You ask very very good questions. So I think you are like very very good question you have asked. What is happening is that premolation is a way of is the pivot which we took two years back. Right. That was the time when we said okay, how do we differentiate versus other players in the market. And when you say you are premiumized, then you premise not only on product categories, you premise on brands, you then also discontinue few stores. Then you work on personal shoppers, then you give us spaces and you put play areas in the store.
I think we have gone through this journey in the last two years or so, invest money on marketing of shoppers, shop as a brand. So prevention, what we are seeing is consistently so. For example, if my weighted average growth for shopper stop is say 4.7 for the year, my premium or premium place categories, the growth rates are far higher. So what we are seeing is that consistently people are coming to us for that. So if you look at our competitive scenario and the market scenario for anyone, which is a departmental store, which is a premium department store, we are the only people who is there.
So I think that’s something which is very, very strong for us and we are not resting on it. So both in terms of whether it’s the merchandise which is exclusively with us, the brands which we are launching. So I think we are able to provide that experience to the customer, which was always a core shopper store promise when we all started this. So I think that’s something which is very strong. The other thing is when we look at paper premium categories, what we are seeing is the SPSs are quite high.
So the sales productivity is coming is very, very high. And in this journey of premonition, we have identified five categories which are a power category, right? And it will be very interesting to know what are those power categories. One is watches, other is beauty. Then we talk about handbags, then we are talking about footwear and shades. So these. So this amazing mix of all merchandise, there is no retailer who does it. So I think we have been able to carve a niche and we don’t share our brand loyalty scores in this as a part of the deck.
But when we are doing our brand loyalty scores, we are seeing that continuously. Both top of the mind awareness and recall is becoming better year on year. So I think it is not only one product category. It’s a mix of episodes, mix of everything. And we believe that increasingly at the top there won’t be any or there are not many people who are buying for that customer. And that is where we come in with our plan. So I think we have taken a stance and we have been honest to it and it has not started showing results there.
Tejas Shah
It’s a last one. Premiumization means you have foreign brands there. And if that’s so, does that conflict with the private label ambition that we have
Kavindra Mishra
No. So you know, so we have spoken about this multiple times. I don’t see for me I’m a retailer first, right. So my productivity and the net gym rof is the most important KPI for me. So when we look at shopper stock we can clearly see that there are product categories where we have the need for power play need for private brands because they become the recruiters for us. So for example Indian wear or western womenswear or kids is aware these brands are the private brands have got a very big role to play because they are the recruiter brands.
That might not necessarily be the case for menswear because which is a more logo driven business or which is or non appealing which is again a more logo driven business. So I think we are very clear there is no conflict. In fact what we are doing is we are our private brands also we are premiumizing in the sense we are making better products. So if you were used to use poly before that blend has moved to cotton based or linen. So premiation is the way of life for shopperstop. Across every category, every product category, whether it’s private brands or national brands we will continue to give a better product to the customer.
And I think they don’t conflict. In fact for us Indianwear for example is a higher productivity than any of the national brands there. So we know how these categories play with their and I think they all blend together. For me just increasing the private brand contribution is not the sales is not the benchmark which we as a group look at. We look at the profitability of the business. So we know which categories and private brands do well. For us we are double downing on Premiership. In fact we just launched Fatini Girls which are private brand for girls business doing really well.
We started with five stores, we have expanded to 69 and there the throughputs are higher than any of the international girls brands also. Yeah,
Tejas Shah
Thanks for detailed answers and all the best for coming.
Kavindra Mishra
Okay, thank you.
Operator
Thank you ladies and gentlemen. In order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to only two per participant. Should you have a follow up question, please rejoin the queue. We’ll take the next question from the line of Avinash Karumanji from Motilal Oswal. Please go ahead.
Unidentified Participant
Good morning sir. Congrats on good set of members from the department stores. So my question is regarding to the beauty. Majority of the growth in beauty is being driven by the distribution business. If I Exclude that and look at it. There is a significant closure of beauty evos during this fiscal year. So what are we learning from this closures and how do we see this going forward?
Kavindra Mishra
Okay, so maybe I will answer part of it and then Biju, if you can. Yeah. So you know, if one, we have to look at beauty as overall business, we can’t differentiate because that’s not the way we should look at business number one. Number two, the national brands business in beauty continues to outperform. In fact the growth rates are quite high there. And we did mention about the fragrance businesses going forward, I think in previous call. Also we have mentioned about the STE business being under pressure where that’s where the standalone business of stores come in.
We are doing a lot of interventions there, working closely with the partner company to the brand partner to increase the walk inside throughput there. We are launching a Mac card or loyalty card especially for Etsy Lauder stores starting from first off, I think, I think next week. So there are a lot of inputs happening there. And did you want to talk about beauty as a whole, especially what’s happening? Sure.
Biju Kassim
No, no. So great. A great question and great observation. So I think I will just step back a little bit to give you a overview about the landscape. See, Please understand that 10 years back or 20 years back, the penetration of beauty in each and every mall or each and every catchment was too little. And at that time it made great sense to have a very compelling boutique or a beauty standalone store strategy. But then as we see that retail is growing, shoppers along with all the other retail partners are growing footprint in beauty.
It is also sometimes associated by the fact that like we do in Shopper stop, what works well for us we double down and what is not working well for us, we sort of close down. So I think we should just see it in that light and nothing beyond that. And as Kavi explained, the category is quite heated up and there is a lot of, let’s say investments coming from everywhere. So for us as a retailer, primarily our drive and promise is to the customer and that’s where we want to again double down on categories that we have been quite strong, where we had strong leadership and great representation.
So what we are trying to do, which we have always tried to hold on, is the philosophy of giving a greater expression, engagement and education to the customer. And that is something that we continue to do. And Kavi did mention that there is strong headwinds on the ST portfolio, some of the brands which are global iconic brands, but that is something Intervention wise, loyalty wise. We are working around the other aspect again to agree fully with Kavi that I think beauty, we need to see it in the overall spirit of it because at the end of the day, retail and distribution is catering to consumers.
Maybe one is to the end consumer and one is to the mid consumer. So we still see and we still are learning what works well for us. And that is where we are trying and bringing in more better brands, both in retail and in distribution. So if you think about it, if you look at the new brands that we are signing is also going to reinforce beauty within retail as well as the distribution landscape is concerned.
Unidentified Participant
Got it, Got it, sir. And speaking particularly of the distribution set, also if I look at it like given the POS that you are having revenue per pound doubled in this year, so how much could there be the potential there we could further speed up for the next coming years.
Biju Kassim
So. So, you know, the fact of the matter is, yes, it is quite progressive and strong, but I think it is also at the phase because we have been acquiring brands which has been launched media towards the later part of the year. So the annualization effect is yet to come through. But to give a ballpark, I think we will continuously grow the productivity as we go. But it also depends on the category, particularly on fragrances. It’s quite strong. It is also followed by a reasonably strong push on the makeup and I think skincare will also follow and I’m talking largely on prestige and lifestyle, not on the mastiff side.
So I think the trend is here to stay to your, to your question.
Unidentified Participant
Thank you.
Biju Kassim
Thank you.
Operator
Thank you. The next question is from the line of Ashutosh Joytera Ditya from ICICI Security. Please go ahead.
Pranay Premkumar
Hello.
Sameer Gupta
Hello. Good morning, sir. Thank you. Thank you for the opportunity, sir. So first question is on the premiumization thing. So you have mentioned that the premium portfolio is actually doing well and typically what happens is that richer premium mix generally tends to have a better margin. But like I understood your point on gross margin but like going forward, can we assume that the EBITDA margin should ultimately improve? And like what would be the exact LFL threshold if like you can tell for the business, which we actually need to cross the revenue momentum basically to deliver more than the operating cost.
So ultimately there should be a profitable growth, something like that.
Kavindra Mishra
Yeah. No, Asutosh, thank you for the question. There are two like let me address all parts of your queries. First is the premium brand need not necessarily have a higher margin, they have a higher gym rof because the Throughputs are stronger so they obviously give us higher rupee value margin. Right. So I think that’s very important. Sure. You have been covering us for quite some time. Ours is a very high operating leverage business. Right. So as the LFLs keep on growing we will see the rupee value profitability going in very very strongly.
My sense is that for the coming year we are looking at a performance which is going to be little better than what we have delivered as a team in and I’m talking about like for like stores. So that’s one second. We are also opening some very very good, very very good stores. So and you will see in that we are launching one on seven which is tomorrow we are launching in Vizag. Then we will be launching GOA with dls. We are going to launch Pacific Jaipur. These are already market stores and stores which will become a 75, 80, 100 core stores over the next two to three years.
So what we are doing is we are changing the mix of the way we looked at business and it falls in line with our strategy of premonition. The third thing is I think while the margin we will continue to be where we are and we have given a guidance of improvement over the next two years you will see lot more initiatives on cost saving because we believe that still there is some amount of money there which we can cut and as well I don’t know whether I have addressed in June. Partly we have addressed but to give a sense of our new businesses whatever losses we made in the.
In the FY26 we will at least half it down in FY27. So we are going to see EBITDA throughput coming through various inputs. One is obviously the revenue growth like for like. And since we have now shut most of the non performing stores I think that will start adding up LFL place as new store openings. We will see a better rupee gross margin coming from the premieration strategy. We will see very very strong and active work happening on the cost controls and removal of formats which are. Which we feel are just taking up the space and not delivering the value.
So my sense is you will see a far better number as a percentage. To tell you the exact number. I don’t think I would be able to tell you the exact number how we are going to end up this year in FY27 or. But. But should be a good number.
Sameer Gupta
Understood and thank you. Thank you for for that answer. And my next question is on this supply chain disruption. So like I got your point on the inflation inflationary Pressure which can be expected because of this. But just wanted to understand like in any way these supply chain disruptions put a shopper stop in a better position when compared to regional or value players in terms of sourcing the merchandise or anything. Like do you have any edge because of this?
Kavindra Mishra
I agree to that. See now look at shopper stop. Right one Obviously we work with closely with lot of big brands and as a part of strategy we are going deeper with brands. So even if I have to increase the space, we are working as a team with our brand partners and giving to the performing brands. So I think what’s happening is in this whole thing where the fabric is going to be a little bit of a challenge at least for two or three months the bigger brands will be able to get the merchandise and because we have a deeper partnership with them, we will be able to get merchandise.
So I think that’s one the second, because we are very strong on the non apparel part of the business versus any other format which is primarily apparel, the impact on this is going to be lesser. Third, for our private brand business which is around 12 to 12, 13% of our overall business there, we have already tied up our supply chain for the next three to six months. So I think you will see little bit of a consolidation happening. And that’s not only for shoppers. My sense is that across the, across the businesses bigger players in the market would be able to command a better or they will have a lesser supply chain disruption versus others.
Sameer Gupta
Okay, understood. And sir, one last question. So just wanted to understand what is the rationale for launching the SKU at 1299 for intune like when most value retailers usually have it below a thousand rupees. So I understand that it would be like to drive realizations but any other point to that?
Kavindra Mishra
No, I think see at the end of the day India is aspirational across categories. Okay. So if you have to give a product good product, you have to give a good product which is maybe little bit more natural fabric, less polyester in India’s heat, better wash, sustains after 10 washes and doesn’t go away. So I think there is a value to the product which you need to give. So what we are giving in 1299, maybe at 2 triple 9 in brands or even more. But our idea is to give a better product. And I think this whole 999 and lower and all this is mentally in our head that customer for the right product and occasion would be able to to buy this and actually what we was and this Is something internally we have been debating for the last three to four quarters.
And finally we said okay, let’s test this out. The 1299 product actually has delivered higher sell through and the which is. So we are doing close to 8 to 9% of sell through of this product which versus a three and a half or four. So it’s like a 2 to 2.5x throughput. So price is not the. Is not the only concern. I think it’s a product price value which we derive and I am a great believer in that that if these models have to sustain we can’t be. We have to address to all the consumers, especially the patient consumers.
I think that’s where we want to do this. And also issues understand our repeats are very strong and that is because intune provides a great quality. So I think that’s something very very important for us. So that’s why we tried 1299. This was done in Indian wear because that was a category which actually lend it naturally. And the response has been very good.
Sameer Gupta
Okay. Okay, understood sir. Thank you sir. And all the best for FY27.
Kavindra Mishra
Thank you Ashutosh.
Operator
Thank you. The next question is from the line of Jignesh Kamani from Lippon Mutual Fund. Please go ahead.
Unidentified Participant
Yeah, hi Kaveen and Ty team. Hope I’m audible.
Operator
Yes sir please.
Unidentified Participant
Yeah. So just happy to see that you have for timing you are putting a break on the Internet function. So look what are the cash flow you are generating from the business now larger proportion will be utilized for the department store which is the core of your pure and where the comparison is virtually non existent. So in that context when you are aiming to add only nine store next year. Any reason for a lower store or weak store edition? Because we have just 113 store opportunity is very large. We are generating almost 300 crore kind of operating cash flow now.
And so what limit you from expanding. And if I give the content like west side is adding 35 store per quarter and 50 store in the year which require also 25,000 to 30,000 larger square feet. So just want to understand on that part.
Kavindra Mishra
Hi Jignesh, thanks for the. Thanks for the query. You know see every. Every format is different, right? And it’s not only about my senses or about the size. But if we have to be premium there are certain markets where we believe we should be there and certain markets we will not be there. Or in terms of expansion and the availability of store that’s one for us. When we have set guided for nine stores a these Are all marquee stores. B these are like very good locations on number one. Number two, we are also renovating five of our largest and the most and the largest stores.
I think that’s one. The third thing is this guidance which we give is primarily based on on the sign properties and the visibility of opening during the year. We have, you know we have few more stores which we have signed if they are able to come between this. Because lot of cases we it’s also a function of building it to your requirement or with the mall opening in and on. And we have seen in the past that typically these things get delayed here and there. So I mean like west side is opening 35 stores.
But I. I think for us if you are able to open nine stores which will do on an average 45 to 50 crores I think that’s a super addition for us. So I think that’s where we are focusing on and we are not versus saying that okay we’ll only open nine stores. If we get the right properties we’ll open more stores. So I think it’s a function of that. But as you rightly mentioned till the time we are fixing the operational and we are seeing the uptick in intune we will continue and build on shoppers topic because I think that’s something where we are seeing very good traction as on date.
Unidentified Participant
Second thing on the conversion. So if you take about for the full year or like to like growth is pretty healthy at around 5 percentage even in current day. But at the same time customer entry is almost 4 percentage. So conversion still we need to improve. So what are the challenging we are facing where we are not able to increase the customer conversion. The fruitful entry we have already taken care of.
Kavindra Mishra
So conversion we did. I think if I look at the overall this thing conversion we did actually faced a higher or a greater problem in Q3, Q4. It became little better than where we are and we have started seeing an improvement in April onwards. We also see that you know as you change the mix you will have certain kind of customers coming in, coming in and going out. So I think it’s a settling down period for us. Just to give you a sense our ABVs actually have gone through the roof. Right. So right now 8 to 10% is there what we experiencing in what we experienced in April as well.
So you will have you have multiple things coming in in the play. So I think it’s a process that will settle down. Jignesh. Right. Because we are changing the brands, we are changing the mix. So There would be some settling down for this. But as long as we are able to get higher customer entry and the repeats keep on going, I think that’s an important thing for our retail teams which are driving the whole business. I think there is a lot of focus on them to increase I conversion. I mean if you talk to my head of business he will talk about some 50 root cause analysis and there are a lot of things which is happening as we see speak.
We also working through some amount of activation through loyalty to ensure a couple of programs are loyalty to ensure that the conversions go up. So as we speak a lot of things are happening. Maybe once we meet we can take you through in detail.
Unidentified Participant
And last on the working capital cycle you already witnessed almost 150 crore plus kind of improvement. So all the low hanging fruit is over or they still used to improve the working capital for next year.
Kavindra Mishra
I think there is still some juice in the working capital and I mean we think that another 100 crores should definitely is there what we are looking at in the coming year.
Unidentified Participant
Okay, thanks a lot and all the best.
Kavindra Mishra
Thank you.
Operator
Thank you. A reminder to all the participants that you may please press star and one to ask questions. The next question is from the line of Sukrit D. Patil from Eyesight Fin Trade Private Limited. Please go ahead.
Unidentified Participant
Good afternoon to the team. I have two questions. My first question to Mr. Mishra is in your point of view, how is shopperstop preparing to capture evolving demand in premium retail and omnichannel formats while carefully addressing challenges such as competition from online players and changing consumer demands? And what strategic levers do you see important for differentiating the brand amongst the peers in the coming quarters? That’s my first question. I’ll ask my second question after this. Thank you.
Kavindra Mishra
Thanks Sukrit. You know. Okay, let me address. So what is the promise to the consumer? If you go to our investor deck the promises. We aim to be the most loved premium shopping destination for aspirational young Indian families. So I think it starts always with the tv. What is the TG you look at and what you want to drive. Once the TG is defined, you we as an organization and as a team take steps. There are things that you will do, things which will not do. So in our mind, getting that customer search online and then come to the store is very important.
The ability to show them the inventory of the store is very, very important. The ability to create these spaces in the store where you are actually cutting down on retail areas. But you know all our stores right now 80% of our stores right now have a kids play area. We’ve actually given away retail spaces and created a safe zone for families to come and leave their kids. And we are quite okay even if they are shopping in the mall. But the kids are there because I think that is the kind of think that no one can offer you.
Right. So our focus is to create premium merchandise to create great service. Our personal shopper program. And actually people come engage with us, we provide them. I mean our personal shopper business last year was 1250 crores which is, which is maybe higher than most of the brands. Right. So that is there then shoppers is known for pivot offer. A lot of times in online what you get maybe not is not something really authentic. But whether it’s the fragrances or the watches, what you get from us is very, very different.
So I think that’s, that’s something very important. Having said that, we understand that we need to cater to the online customer. So that’s why the investments in online have happened over the last year. We are very happy with where we are and we have started seeing the results of that. And when conversions this month onwards is very, very good and online that’s the. I think the other thing is there’s also a demographic change because obviously there are younger consumers coming in. So we just tied up with hybe which is the group which actually created amazing bands like BTS which is a South Korean brand.
So they are creating India’s first girl band and we are the retailers for them. In fact we will start selling from our stores the BTS albums also and we’ll be the only tailor selling it. So I think there are multiple levels of marketing strategy and execution which we are doing as we speak to create differentiation. If I talk about our peers, I think there are a couple of things very different. A, we are very, very premium vis a vis the merchandise offered by our peers. And second, the heavy pivoting which we have on non apparel that is beauty or watches.
I think we stand very, very differently. So we have portioned ourselves India’s only premium retailer and we are building on it every single day.
Unidentified Participant
Thank you. My second question to Mr. Pankaj is as Shopper Stop continues to benefit from growth in fashion and lifestyle consumption, how are you prioritizing capital allocation between store expansion, digital investments and shareholder returns and what long term cost efficiencies are being pursued to safeguard margins and amid rising rental and operating costs? Thank you.
Unidentified Participant
See, the large part of, you know, our resources will go towards our Core business, which is department stores. Having said that, we understand the potential of our new businesses as well, which is the intune. And you know, Kabir spoke about it. We brought intune up to a level and right now, you know, our priority remains that we get the unit economics right. We correct the profitability and efficiency and then we look at expansion. You know, our distribution business that also continues to grow very well.
It’s a very profitable business. If you see our results, that will continue to expand as well. So you know, our capital allocation will follow the profitability path at the moment. Let me, you know, be very clear on that. And once the profitability part path is established, resources are definitely not a constraint for shoppers. So the expansion will then continue. A combination of all these. You just asked about shareholder returns. I think a combination of all this definitely leads to a profitability turnaround which is then the ultimate return for the shareholder as well.
I hope I was able to address you. If you have any follow ups, I can take those.
Unidentified Participant
No, thank you. And best vision.
Unidentified Participant
Thank you. Thank you so much.
Operator
Thank you. The next question is from the line of Devanshu Bansal from MK Global. Please go ahead.
Devanshu Bansal
Thanks for the opportunity. Sir. I wanted to understand premium. Obviously it’s a incremental focus for us. So is it like the existing consumer that wanted premium products but we were lagging behind on this space or is it like we are changing the consumer profile of our business and trying to bring in a new set of premium consumers?
Kavindra Mishra
I think it’s a great, I think one of the best questions asked today. Devanshu, you know, I will, I will give you a data point. I think it’s very interesting. So we launched a brand, say X in handbags. So handbags is one category which we have chosen as a premiumization, like one of the top five categories for premiumizing. We launched a brand called say X. I don’t want to name brand specifically so I’m just using X as a nomenclature. So when we launched that brand, it became the number one brand for us in its first year of launch.
When we looked at the data, we realized that 65% of people who bought that brand used to be a shopper stop customer but they never used to buy handbags from us. So what we realized was that and that for us was a aha moment. That actually if you are able to get the right merchandise, the customers are. The customer with whom we have is
Devanshu Bansal
Whether it’s
Kavindra Mishra
A silver or a gold, they are all top level customers. Maybe we were not keeping merchandise of the brand which they were consuming. So for example, they might be coming to us to buy certain apparel categories but especially in they were not buying the handbags from us. So I think what we are trying to do is to actually come closer to the customer in terms of what he or she needs. We have got this very beautiful concept called voice of customer. So we actually in all our stores we have something called.
So there’s a QR code, you scan it. And now what we are doing is if you have to launch any brand in any store, we actually ask the customer do you think this brand should be launched? This is that we have a word cloud and we decide whether we need to launch a brand or not. We also ask our consumers whether you want a certain brand, please name it. So what has happened now is that obviously we will attract newer customers but the customers who are shopping with us, the 13.5 million which is our to whom we owe everything, we are giving them a voice to tell what they want and we are getting those brands.
And what’s happening is it’s, you know, it’s a like a se energy once you start doing it and the brand starts seeing that we are respecting them and giving them the, you know, the ability to display them well. It’s a multi pad effect and I think that’s the journey in which we are. It takes, I mean it has taken us some time to, to get this to execute the strategy. But I guess what you are seeing now would be a multiplier effect of this going forward.
Devanshu Bansal
Fair enough. And is it a fair assumption that you’re gaining new consumers as well?
Kavindra Mishra
No. 100%. So what we see is that 41% of the bills which we are making now
Devanshu Bansal
Is through
Kavindra Mishra
New customers. Right. So I think that that for me is very, very important. The fact that we are our enrollments whether in the black card or the silver card, the highest ever, I think that’s very, very strong. Repeats coming at 69% is very strong. So you can see that the KPIs on recruiting newer customers as your black customers or the customers coming for the first time. I think we are seeing an uptick across all the KPIs
Devanshu Bansal
Since small follow up here is from our watches category perspective. We are seeing very I would say exponential kind of growth trends for watches specific players. I’m taking examples of just in time Helios which play in these premium to bridge to luxury watch segment. So as in what is our differentiated proposition that we are bringing to the consumer for this particular category.
Kavindra Mishra
So you know I think the. And you actually you’re answering the question in the question. You’re answering your own question. Everybody whom you mentioned are actually watches customer only.
Devanshu Bansal
Right.
Kavindra Mishra
What we are able to get is a customer who can transcend across categories. Right. So that’s one big differentiator. Second, we are right now very, very strong in fashion watches.
Pranay Premkumar
When we talk about
Kavindra Mishra
Fashion marches, I mean Armani, Chirupi, right. There are different asp. When we talk about especially ethos. They are all. I think it works at a different scale. So our focus is around the fashion and not building on the, on the, on the bish to luxury segment. But I think the biggest differentiator is the walk ins which we have like if 5.7 or 5.2 I think what was the exact number those main number of crore people are walking into the stores and watches is on my ground floor. Along with beauty, we give the customers that choice to experience the product.
I think that, that that’s a very different experience. And which is the power of a departmental store. If you get your act right you will get multiple customers traversing across categories.
Devanshu Bansal
Understood. The last question from my end, malad store. It’s been some time since we renovated. So can you comment on trends in some of these innovative stores versus the rest of the network or versus the adrenaline in these particular stores? So on key retail matrices, what is the kind of improvement that we’ve seen post data Innovation.
Kavindra Mishra
So we are seeing that once we renovate our marquee stores our sales productivity goes up by 35 to 40%.
Devanshu Bansal
35 to 40%. Yeah. The
Kavindra Mishra
Sales productivity, yeah.
Devanshu Bansal
Okay. So that translates into better margins also. Right. So of course
Kavindra Mishra
Because the cost of XDI and that’s why we are very excited about renovating our five big stores this year.
Devanshu Bansal
And after these five stores, so will our network be largely in shape which we sort of envisage or. No, no.
Kavindra Mishra
Renovation is going to be a continuous, continuous thing.
Devanshu Bansal
Okay. Okay. Great. Sir, thanks for taking my question.
Kavindra Mishra
Thank you. Thank you.
Operator
Thank you. You may please press star and one to ask questions. We’ll take the next question from the line of Abhijit Kundu from Antique Stockbroking. Please go ahead.
Tejas Shah
Yeah. Hi. Thanks for the opportunity in terms of your premiumization initiative. As per my understanding, for the last 20 years, I mean Shopper Stop has been at the forefront of providing premium approach and fashion. When we look at departmental stores anyway, there were always limited options in department department. Commendably we have done that very well. You are going to the next Level of having, you know, the luxury apples and fashion accessories. My point is that, you know, when I look at your departmental store growth, it’s in the region of 4 or 5%.
Your other businesses are the non core, I mean the core business department store that is. And within that there, there is an element of, you know, the non apparel business which is obviously growing at a higher rate. The cosmetics and the watches business, the apparels business though the, you know there has been a good amount of evolution seen particularly in the last seven, eight years in terms of premium apparels. And then that is quite differentiating when we compare it with any other departmental store.
Other departmental stores anyways are not much, not much of options. And when we compare those brands to the exclusive brand outlets, those brands are seeing a higher growth. You rightly said that you have a bigger size, all of that. But why are we not able to see more growth, I mean in the than the EBOS? Because EVOs have done better in the last two years when we compare compared to the departmental store business or maybe the estimated apparel store business of yours. Is it that under value proposition within your departmental stores have not done well?
Only the prison apparels have done well. I mean what has it or what has been the scenario there? Because you know when we look at the, there have been companies who are grappling but they are seeing high single digit to you know, 10 to 9, 10 to 15% kind of growth now. So and then we need that you know, 15% growth in department stores backed by some 7, 8%, I mean same store sales growth and 700% store store addition. So where are we in that, I mean in that overall circumstance scenario that I wanted to understand.
Kavindra Mishra
Okay, thanks Abhijit. Broadly, the question is, as I understand is you’re questioning the growth which we have in our apparel business versus that of apparel of the brand in their EBOs. Right. That’s what the question is.
Tejas Shah
That’s
Kavindra Mishra
The fundamental part of the first question. So I don’t think so we have to look at the data in the way you have just mentioned all the brands which you speak about who have done a double digit growth. Actually if you ask them how is the departmental store retail growth for them, you will find that maybe we are same or more. When you see our profile you will have a set of brands. So for example we have about 40 brands of apple. Few will do grow better, few will not grow better. Right. So you look at a weighted average.
But brand to brand, if you compare the performance, I think we are very much there That I know for sure because as partners we’ve got deep relationships over the last 30 years or so. We share data very, very openly. Right. So I think that’s one thing. Obviously I can’t name the brands here because it’s a brand right to mention. So just to tell you1, that’s one second for brands itself. The departmental stores are and they continue to be one of the most profitable channels. Before I joined shoppers, I was running brands only and the kind of spaces which people get, the kind of walk ins which brands get, very difficult for them to get in their own ebos.
And obviously the rental cost which we have and the margin versus what the brands pay. So I don’t see that as an issue. I think we are comparing subset of data of high performing apparel brands and I would, and I’m very sure that our performances in those would be equal or better. And that’s for sure, at least for the last two years. I’m very, very sure. The third thing is, and I think you are rightly saying that we should look at a double digit growth in departmental store which is a mixture of the like for like plus new store.
I think for our business we should, we are aiming for that kind of growth this year. Just to just answer that. Yeah.
Tejas Shah
So where are we seeing. So my other question, or rather the main question was where are we seeing that lower growth? I mean is it
Kavindra Mishra
Higher growth in, we are seeing higher growth in premium brands. We see lower growth in the low price bands. And that’s, I think we said that we are churning out brands. The other thing which we need to also understand is that most of the brand contracts and brand stores are the age of five years. So you are comparing a three to five years or four years like for like growth versus somebody like our marquee stores are 30 years old or 25 years. So you know there is a, it’s not, it’s not a comparable thing at all.
If I, if I, if I, if I, I look at it. So there are two or three variables. So we have to look at it more granularly to, to create a, to create a hypothesis around it.
Tejas Shah
So your stores would be having a higher growth rate, is that conclusion right then? I mean not three to five years,
Unidentified Participant
Obviously. Yeah.
Tejas Shah
Okay. And has there been any underlying recovery in discretionary spend seen during the quarter? Because across the board, generally discretionary spends, I mean the fashion trends have been relatively better than what it was in the previous quarters. Have you seen something like that?
Kavindra Mishra
Yes, yes. I think in my commentary Also I mentioned that the fashion or the overall business has seen an improvement since February. That improvement well may also have started off fine. My worries are more for the Q2 and Q3 because of supply chain disruptions, if any.
Tejas Shah
Understood. Thanks. Thanks.
Kavindra Mishra
Yeah, thank you.
Operator
The next question is from the line of Tejas Shah from Evan Nesbuck Institutional Equities. Please go ahead. Mr. Shah, please proceed with the question.
Tejas Shah
Yeah, hi. Am I audible?
Operator
Yes. Yes.
Tejas Shah
Yeah, hi. Thanks for the follow up opportunity. Couple of questions, partly academic in nature. So did I hear you correctly? You said that once a store get refurbishment, sales product productivity increases by 35 to 40%?
Kavindra Mishra
Yes. The new. I think there are two very good examples. One is Mallard, another is Juhu. The moment we have done it, we have seen that kind of thing. In case of Mallard though, we also reduce the space and that also help us to grow that much of productivity. For Juhu, it’s the same store size and we are going around 35 to 40%.
Tejas Shah
If we double click on this, what leads to this? Is it that customer gets excited with the new store? Because I’m assuming the catchment area, the customer profile remains the same, the location remains the same and I’m assuming inventory also remains the same. The merchandise. So
Kavindra Mishra
I think Tejas, the biggest change happens in merchandise if the store obviously looks fresher and more appealing. But I think we have changed the way and maybe I invite you to visit us Juhu store because I think that would give the best answer to this question. Because if you see the kind of brands we have seen, for example in Juhu, the number one brand is what we never kept in our store. That brand has become the number one brand and it’s a very big global brand. So what I’m trying to say is the nature of the merchandise itself changes the way the pricing at which we have kept.
Because see, these stores always had good, you know, consumer entry. Maybe we had because we were not renovating or whatever time it took, the stores became jaded. And what we are seeing and experiencing is as we are renovating the stores in case of Mallard, even if I take out that one floor view, we would have SPSSF would have gone up by 15, 20% in case of Juhu, completely 35% SPSF increase only basis the newer brands which you’ve introduced. So I think that’s a journey. We realized that the customer has always been there with us.
We were just not giving them the merchandise which they deserved. And I think Juhu is a big testimony for all of us. And learning which we have accepted and we are working on now,
Tejas Shah
What is the typical refurbishment cycle?
Kavindra Mishra
Typical as in how many years we do?
Tejas Shah
Yes, yes.
Kavindra Mishra
So I think eight, seven to eight years is there is what we take. But after seeing the Juhu success is that’s where we are now focusing on a big stores, Tejas, that we see a formula which is a winning formula. We now need to execute it. And out of. That’s why I’m saying we have taken five of our largest stores. Also the newer stores which are opening, the ones which are the premium ones, we are opening in a new format only so that we don’t. We are not, you know, we just want to take the whole experience to the next level.
Tejas Shah
Isn’t this the secret soft there? Because if I do the math over 7 years also if it takes 40% jump, it actually productivity is 5% SSSG on CAGR basis. So is seems like that it is. It is like every six, seven years. If we do this, then certain on CAGR basis we actually achieve what we are trying to achieve with so many means.
Kavindra Mishra
Agree. I think you are right that we should renovate. But I think it’s not only about renovation, it’s also about what brands you’re getting in. Right. So if we are able to get the right brands and renovate, then is that number what I mentioned, 15 to 20% in case of Malar or 35% in case of Juhu. We have seen that growth happening. So I think that’s a safe assumption. And that’s why the focus this year and the coming years is on renovation of our marquee properties as well.
Tejas Shah
Just second and last again party academic, you said that it was kind of discovery which we made that our customers who are coming already are buying premium brands. Now, among the offline detailers, you have the most dated, most vintage data on your customers which you are collecting for last many years. Now, ideally, with the data and with all the computing tools that we have, shouldn’t it be much more proactive rather than reactive? And why I’m saying this, that when we are competing with digital channels who are using even nudge searches to figure out that what customers are looking for or not getting.
So with that kind of competition to beat in the data that we have, shouldn’t it be much more proactive to understand our customer?
Kavindra Mishra
No, no, Tejas, I think you misunderstood what I said. What I said was that we introduced a new brand and we saw that we are able to attract newer customers right now, whether that customer is in the Handbag category was buying a brand X or a Y. No data will tell you because we are not an online site which is offering all these brands. Please understand we have the data for shopping within the ecosystem. Right. We don’t have his shopping waiver outside the ecosystem because even on our.com we only sell brands which are a part of our profile.
That’s one. Once we figured that out. That’s why we are now using voc, which is the voice of customer and it is actually done through AI. That customer can speak in 22 languages. That gets converted into word cloud, tells the name of the brand which they want in the store and we launch it. So I think we have been very proactive in this.
Tejas Shah
So you have tools to kind of engage with customers to understand. No,
Kavindra Mishra
Just to give you a sense. Tejas, our loyalty program has been rated the best loyalty program and personalization program has been rated as the best program across. Across all the departmental stores in the world, which includes Selfridges and Macy’s and everybody. So I think it’s a very detailed. There’s a lot of information, as you rightly said, sitting with us and we continuously keep on churning on it and we are building the personalization there. For example, if you come to our personal shopper, he actually has an app which will have all your history, what you have shopped last time, what is likelihood of your buying, which brands you want to buy, which what you have shot before.
And if you’re shopping this brand, what are other category brands? I think, but that’s all within the ecosystem. No data allows you to check the ecosystem from outside. Right. So I think that we need to be very clear on that.
Tejas Shah
Perfect. Thanks. Thanks. That’s all from.
Kavindra Mishra
Thank you.
Operator
Thank you, ladies and gentlemen. That was the last question. Thank you, members of the management, on behalf of Shopistop Limited, that concludes this conference. We thank you for joining us and you may now disconnect your lines. Thank you.