Baazar Style Retail Targets Opening 40–50 New Stores A Year Till 2027

Baazar Style Retail Ltd. plans to open up to 50 stores annually over the next two years to drive growth. The multi-brand apparel retailer will focus on expansion into small towns.

Speaking to NDTV Profit, the fashion retail chain’s Managing Director Shreyans Surana said that the company aims to achieve this expansion target while strategically investing in warehouses and maintaining a healthy growth rate.

"As a company, we have a clear strategy where are working on a balanced growth approach. We will be trying a revenue target of around 25% and L2H (low to high) sale store target of around 7-8%. So, we will be opening around 40 to 50 stores every year (over the next two years)," he said.

 "We are also focusing on backend operations. For the current year, we are targeting to invest in our warehouse capacity expansion.  Along with this, a lot of investments is going into the technology part like warehouse management solutions and inventory management solutions," Surana explained.

While the new stores will be opened across locations, the focus will remain on smaller cities. Around 66% of Baazar Style Retail’s existing stores cater to tier three and tier four cities.

 "This financial year, we have focussed a lot on cities like Kolkata. Largely, the target (for new stores) will be in tier 2, tier 3, and tier 4 only," he added.

Explaining on how Baazar Style Retail arrived at the target of 40-50 new stores, Surana said, "In the past years also, we have grown at around the rate of 24% to 25%, so 40 to 50 stores is a sweet spot which allows us to have a healthy growth of around 25% in which LTV (lifetime value of customers) growth is of around 7-8%. For this year, it is around 10%, so if the same stores are growing at around 7-8% in a financial year, it gives you a healthy margin. It mitigates the revenue or the PAT loss by the new stores."

According to Surana, most of the new stores will be coming up in regions where Baazar Style Retail is already present. This will allow the company to have a better understanding of the demand pattern.

Shares of Baazar Style Retail closed 3.06% higher at Rs 219 apiece on the NSE on Tuesday, compared to a flat close for the benchmark Nifty 50.