Marico's Just Herbs Plans Fivefold Jump In Stores Despite Focus On Breaking Even

Just Herbs has lined up an aggressive retail footprint expansion plan even as the Marico Ltd.-owned ayurvedic skin and hair care brand aims to break even by March 2024.

The company looks to take its multi-brand store count to 500 from 100 over the next 12 months. The offline expansion plan through multi-brand outlets as well as general trade is part of Just Herbs' renewed focus on physical stores after it was forced to shut all five standalone stores during the Covid-19 pandemic to build a profitable, capital-efficient business.

"We don't want to open any exclusive outlets, at least in the near term," Arush Chopra, co-founder and chief executive officer, told BQ Prime. "The pandemic forced us to recalibrate our offline strategy ... we have consciously decided to have shop-in-shop formats as they don't require heavy capex while at the same time allowing us to be present where our customers are."

Chopra expects sales from offline channels to contribute about 20% to overall sales by the end of this fiscal, up from 8%. The retailer also expects to achieve break-even faster, buoyed by its rapid store additions.

"Certain lines of the business are already profitable," said Chopra. "For instance, we already make money from our D2C website. But the newer channels are not profitable yet because we are investing in them well ahead of time," he said. "Our DNA is to build a very capital-efficient business ... We hardly raise money compared to our peers. With robust demand and our store addition plans, we hope to achieve breakeven as early as this fiscal."

Just Herbs currently derives 40–50% of its revenue from its own website.

As against the general trend of a slowdown in discretionary spending hurting businesses, including those dealing with beauty and personal care, Chopra said his company "does not see a significant headwind from the demand slowdown" thanks to its relatively inflation-insulated premium portfolio. Interestingly, the non-metros contribute nearly two-thirds of its sales.

"We have constantly doubled our revenues over the past two to three years, and we hope to maintain the momentum, going forward," he said, without elaborating further on the Marico-owned firm's financial details.

After skin and hair care, the bridge-to-luxury brand has also forayed into the country's $3.7 billion fragrance market.

The growing demand for natural and organic products and consumers' willingness to spend on premium products present an opportunity for Just Herbs, according to Chopra.

Marico has set a target to reach Rs 450–500 crore revenue in FY24 for its digital-first portfolio, which includes Just Herbs, True Elements, and Beardo.

"The digital-first portfolio has been scaling up well in line with our internal targets. The current portfolio is poised to reach an exit ARR of Rs 400 crore next year," said Saugata Gupta, managing director and chief executive officer at Marico, during the company's fourth-quarter earnings call.

"With the funding winter setting in and more sanity in the ecosystem, we'll be able to improve profitability and leverage far more synergies while moving our digital-first brands into their next leg of growth," Gupta said.

Marico acquired a 60% stake in Apcos Naturals Pvt., the parent company of Just Herbs, in 2021.