Ladies and gentlemen, good day. Welcome to the Q1 FY '2024 earnings conference call of Shoppers Stop Limited, hosted by Perfect Relations. As a reminder, all participant lines will be in the listen-only mode. 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 one zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Mamta Samat from Perfect Relations. Thank you. Over to you, Ms. Mamta. Thank you, Michelle. Good morning, thank you all for joining us on the Shoppers Stop Q1 FY 2024 earnings conference call. Today, we have with us the senior management, represented by Mr. Venu Nair, Customer Care Associate, Managing Director, and Chief Executive Officer, Mr. Karunakaran Mohanasundaram, Customer Care Associate, Chief Financial Officer, and Mr. Jaiprakash Maheshwari, Customer Care Associate, Vice President of Finance and Accounts. We will begin the call with the opening remarks from the management, after which we will have the forum open for the interactive Q&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 and yearly performance and to the strategic questions only. Outstanding questions can be dealt with directly with the IR team. I would now request Mr. Venu Nair for the opening remarks. Thank you, and over to you, sir. Thank you, Mamta and Michelle. Good morning, friends. Thanks for joining us today to discuss the Shoppers Stop financial results for the first quarter of FY '2024. Along with me, I have Karuna, our CFO, and Jaiprakash, our FD and A lead. I will begin with the retail market as on date. Then cover our quarterly performance in detail. As has been extensively reported over the last few months, the retail market, particularly apparel, has been moderating since Diwali of last year. In the light of that, we had a mixed quarter with strong growth in beauty, non-apparels, such as luggage, watches, et cetera, with a lower growth in apparel. Last year, the same quarter, as you are aware, we had the pent-up demand post-COVID, being the first quarter after COVID when the markets had opened. In addition to that, we had also spoken about the global uncertainty, persistence of inflation, and the prevailing uncertainties globally. All of this will ease off, and it will take time for that to happen, particularly in the informal sector. Consequently, we observe the mass and mass cheap segment in apparel continues to have muted growth. June has been better, and July is continuing in the same lines. Despite these challenges, we have delivered a resilient performance this quarter and is quite competitive. Let me talk about the Q1 performance and the way ahead. We have delivered sales growth of 4%, with gross margin remaining flat and EBITDA of INR 58 crores, against INR 68 crores last year during the same period. Our EBITDA decline can be attributed to two large factors. First, being that we have in-invested into new initiatives, and margins were flat due to offers in mass and mass cheap brands during the season. On some of the other KPIs, our average transaction value grew by 8% this year versus the same period last year, with continued premiumization across the category and brands. This is the 13th consecutive quarter of growth in the average transaction value, and this shows that our customers are blessing us with higher wallet spends. Our average selling price grew by 5%, primarily due to our focus on premiumization across categories. On non-apparel, we observed double-digit sales growth. A good example of the shift to premiumization is in the watches category, where the share of Titan watches above INR 15,000 has grown from 11% - 23%. In the same space, our items per transaction, which is the third metric that we track, grew by 4%, again, underlining the fact that our customers are putting more items into their basket when they come into our stores and online. Our customers and their preference for premium products has increased. The early start of End of Season Sale across the industry resulted into higher footfalls in malls, we also saw the same. We did observe higher discounting without inventory liquidation. Let me now move on to costs and share some of the key details on operational costs. Our total costs have increased by 10%. We have been investing into new initiatives, such as the footwear in private brand, launching ssbeauty.in, an exclusive website for our premium beauty products available in the SS Beauty stores, and in June, we introduced. a new format, which offers fashion for all in the name of InTune, which I will talk about a bit later. Without these new initiatives, our costs would have increased by a nominal 6%-7%, which is largely inflation-led. We have always been cautious on spending and continue to monitor the costs, particularly during these tough times. With strong sales and great control on costs, during the quarter, we reported an EBITDA of INR 88 crores, compared to an EBITDA of INR 68 crores in April '2023 first quarter. As I said before, market conditions on apparel and the new initiatives led to the marginal decline in EBITDA, and we firmly believe we will recover this during the year, particularly in the second half of this financial year. During the quarter, we opened six TT stores and one HomeStop store. We would have opened three department stores. Due to delay in getting regulatory approvals, the opening of these stores have been delayed. We should open two department stores in the next two to four weeks, which are fully fitted out and just waiting for the mall itself to open. As you observe, we have sustained improvement in all our KPIs for more than 10 quarters now. We follow the Three C framework, which is consistent growth, customer centricity, and capital allocation. I have talked on the growth part. I will cover customer centricity in our strategic pillar and capital allocation, including working capital, investment in new stores, and cash flow in security. From operations, I will now move on to the performance of each of our strategic pillars. Starting with First Citizen, which is our first strategic pillar. Our loyal customers continue to return back to shop with us, which is a pillar that's a firm foundation for our success. We firmly believe customer loyalty is important to retailers because it helps them to build a strong relationship with their customers and gives better insight through analytics of their behaviors, preferences, and likes. We have created a culture in our company, where customer is the core of everything, and providing a seamless shopping experience to them, delighting them with exceptional services, going the extra mile, is our way to show that we care. Our First Citizen program creates an emotional connection between our customers and us, one in which our customers feel, seen, and heard. We cater to their needs, provide exclusive shopping experiences, and offer tailored promotions. We have the highest advocacy within retail in India, and we are proud of that. Our loyalty contribution is now at 80% in offline and 22% online. Our repeat sales and members shop grew at 11% and 3% respectively, driven through the Black Card tier and the Platinum tier. Our loyalty contribution at standalone beauty stores was at 31%, almost double. We had more than 150 customer engagement activities during the quarter across our stores. These engagements resulted in twice value of sales with 6% higher average transaction value. Our loyalty points redemption, sales generated 11% and 16% growth over the previous year. Also focused on our inactive base. This generated an additional 4% of our revenue through specific campaigns. Our new enrollments have increased by over nearly 200,000. Our First Citizen Black Card contribution has now increased to 13%. The consistent doubles the average transaction value of the normal customer and spends of more than four times that of a normal First Citizen member. Moving to the second strategic pillar of private brands. Our private brand sales largely remained flat due to the tough market conditions in apparel. During the quarter, we achieved INR 171 crores. Our private brand share has sustained at 14% for the quarter, and the share within apparels is at 21%. Indian wear outperformed, and our brand, Haute Curry, grew by 42%, and the occasion wear brand, Kashish, by 14%. The kids infant brand, Carrot, grew by 10%, which also saw an expansion of apparel range for newborn. The smart casual wear brand, Fratini, grew by 39% overall. Within the private brand portfolio, I would now like to talk about the new format that we have launched, InTune. This is a fashion for all format for the trendy college goer, to the classically dressed young parent, to the cult and energetic kid. InTune has something for everyone. This is a trial that we have launched, and we have opened three stores so far, two in Hyderabad and one in Somajiguda. The early results extremely encouraging. We are a few more stores as a part of this trial, and we would have more details on it in the coming quarter. This category, we are primarily focusing on apparels across men's, women's, and kids category, and our objective is to provide irresistible fashion and unmatched prices. With its 100% in-house assortment, InTune brings to the fore fresh quality, fashion for the cool-spirited, and shockingly accessible prices. Ensuring differentiated fashion and experience for customers, active control of the value chain is integral to evolving a sustainable business model for this concept, which is one of the strengths of us as an organization. I now move on to beauty. Beauty is one of our fastest growing categories and contributed to 16.4% of our overall sales with INR 216 crores, an increase of 13%. Our unrelenting customer engagement activities, such as takeovers in stores, led to double-digit contribution to the beauty revenue. We have launched more than 80 SKUs across the beauty segment, taking the portfolio to 500+ SKUs. We have also introduced virtual try-on and skin analyzer at SS Beauty store, and this is one of the unique proposition from Shoppers Stop to its customers. Our SS Beauty stores are performing well, and we continue to expand our reach through standalone beauty stores. Apart from the 98 department stores we, where we offer beauty brands, we now have 89 boutique beauty stores, which are standalone. Our beauty distribution business is progressing as per plan. We are launching Armani, which is a flagship brand from L'Oréal International Distribution, and the perfume brands of Tumi and from the Park Fragrance Group in this quarter. Our recently launched beauty distribution contributed INR 15 crores worth of sales and achieved a breakeven at an EBITDA level. A total of 50 retailers have been onboarded online as offline, with 266 stores till date from where these brands are now retailed. Moving on to the next strategic pillar of omnichannel. Omnichannel retailing, which offers a seamless and consistent shopping experience across multiple channels, is rapidly gaining popularity. Customers expect a seamless experience as they move between physical and digital channels. At Shoppers Stop, we have one view of our customer through products being available in our stores and at the same time on ShoppersStop.com. Our online ShoppersStop.com had a good quarter and registered a growth of over 16%. We are aware that omnichannel retailing is a rapidly evolving landscape, and we will need to stay ahead of the curve to meet the changing needs of their customers. We are well geared to do that. From the strategic pillars, I will now move to capital expenditure, working capital, and cash flow. We have opened 31 department stores in the last three years. Our CapEx is circa INR 200 crores per annum. It's primarily funded through internal accruals. In the quarter, we renovated three large department stores, one beauty store, and also one HomeStop. We also made investments in technology in these areas. For the quarter, including the deposits, we spent INR INR 55 crores on CapEx. Due to external factors, as I mentioned before, the stores opening has been delayed. We will be opening two stores in the next four to five weeks, with three more stores before the end of the quarter. We have four stores under fit-out as we speak. We are on track to open 12 large department stores and 15 beauty stores during the year. In addition to that, we are opening a brand new state-of-the-art large beauty format in Quest Mall in Kolkata at the end of Q3 or early Q4. This will be a 9,000 sq ft beauty hall and will be the first of its kind in the country. Our inventory increase is led by beauty, partly due to the increase from SOR to outright and lower sales in the private brand apparel, which will be corrected in the coming months. Our investments in capital expenditure and increase in stocks will be augmenting the future growth. We are a net borrowing of INR 20 crores at the end of the quarter. Due to the shifting of the festive period from the end of Q2 to Q3, I expect the net borrowings to be in the range of between INR 100 crores-INR 150 crores at the end of the second quarter. We have both Diwali and the second end of season sale in December. Post that, I expect cash surplus in our business. I'm reasonably confident that we will end this year with cash surplus, even after our planned investment of INR 200 crores in CapEx. Finally, looking at the outlook for the future. to stop, we continue to partner with brands and launch new brands, ensuring that our customers have something new each time they visit our stores. We are future ready in terms of product offering and customer experience. We continue our efforts towards collaborations with large global apparel and beauty brands, which helps us to offer new brands to our customers each time they visit us. On store launches, just to reiterate, we plan to have 12 department stores and 15 CC store launches in FY 2024, which we are on track for. Fitment and renovations of existing stores will continue as planned. We continue our first efforts to give premium experience to our customers across digital and online platforms. Our investment in SS Beauty and global SS brands will continue. Last but not the least, we expect Q2 to have modest growth, as there has been a shift of season from Q2 to Q3 this fiscal year, a shift in festive, which I mentioned just before. As I said in the past, the vast economy of India, any slowness is temporary. We are confident the Indian economy will turn the corner, which is already happening in sectors like travel, hotel, FMCG, et cetera, and they are into the growth phase. We are buoyant and very confident that the apparel sector would have a higher growth in the subsequent quarters. With that note of positivity, I end my speech and will answer questions that you may have. Thank you. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Sameer Gupta from India Infoline. Please go ahead. Hi, good morning, and thanks for taking my question. I have two. Firstly, on the department store addition, I recall that at the end of the third quarter, we had stated that we had five department stores under fit out. Fourth quarter, we saw two department store additions, none this quarter. Are we just being more measured on the demand environment in our store openings, or is there a real, you know, procedural regulatory issues that we are facing? In case of the latter, is this 12 department store addition guidance for the year, you know, going to be very back-ended, and is there a risk of a slow over here? Good morning, Sameer, and thanks for that question. It's an interesting and good one. If I get into a little bit more specific, the two stores which were supposed to open in this, and what we had expected to open in this quarter are Guntur and Cochin, which originally we had, I mean, we had started fit out and we were planning to have it opened in March. Both of these stores did not get their occupation certificate, and even as we speak, they just got it in the last week. As Guntur will open on the tenth of August and Cochin is slated to open on the nineteenth of August, which is when the mall itself opens. It was purely due to the occupancy certificate, without which obviously we can't open. Coming on to your second question, in terms of the 12 department stores, we expect to have five stores opened within this quarter itself, and we should have a further three in the third quarter. I don't expect it to be back-ended. Having said that, I mean, I keep our fingers crossed, as I say, because we are at the mercy of A, where, in the case of a large mall, then the mall itself being ready, B, the occupancy certificate and other the other certifications that are required being obtained by the landlord or the mall developer, as it might be. The one thing which we won't do is to rush into opening a store purely for ticking the box and factoring in a store open. When that happens, all that we end up doing is, having a store open too early, with not enough customers coming in, and that just doesn't give a good experience to any of us. Internally, we've put some guidelines as to how much of the mall has to be occupied before we open the store. That's something which we will strictly monitor and follow. Thanks, sir, for a very detailed answer. Second question is on the margin front. We've been around a 4.6% margin if I look it on a gross sale level this quarter, on a green days basis. We are doing a lot of things. We are, you know, opening a new beauty format, as you alluded to in Kolkata. We are, styling a new format in InTune. Are we still guiding for the high single-digit margin in the medium term, or is that also at risk, at this point in time? One is, I would just like to clarify that each of the investments that we are doing are in line with our strategy, focusing on our strategic pillars of the two that we specifically talked about, the beauty store as a part of our beauty pillar, and the new format InTune as a part of the private brand pillar. In terms of margin, the guideline that we had given earlier is what we continue to maintain. At an EBITDA level, we were at the bottom, we were at 5.3%, and the guidance of high single digit is what we continue to maintain. We don't see any significant dilution of margins with these new investments. Just a clarification, sir. This 5.3% is on net sales, and I believe our guidance has always been on gross levels. Just wanted that to be clarified. You are absolutely right. Yes. Okay, cool. Thank you, sir. Thank you. We have the next question from the line of Nihal Mahesh Jham from Nuvama. Please go ahead. Yes, thank you so much, and good morning to the management. My first question was, would it be possible to share the footfalls for the offline stores, how that has been on a YoY basis for that purpose? For Nihal, On footfalls, we have moved to a new system of measuring footfalls using cameras, which was installed in the fourth quarter, and now all of the stores have moved to that. Because of that, I just want to flag that it is two different systems which we are looking at. Last year was on a different system versus this year's camera-based system, which is more advanced and AI-enabled. Having said that, in the first quarter, we had a total growth of 8% on footfalls in our stores. If I understand, that number was around INR 17 million last year. This quarter was around, say, 18.5%, 20% growth. No, it was 10.5% last year and 11.4% this year. The offline customer entries? That's right. Okay, I'll take that separately. The other part is that as you started the EOSS early, have you seen a significant improvement in the footfalls for, say, the last, 10 days of June 19 during the 25 days of July? That is also something that is still tracking on a moderate basis despite EOSS starting? At the end of the EOSS, I mean, normally, when we get into the end of season sale, we do see a significant growth in footfall or increase in footfall. That's something which we saw this time as well. In June, there was a growth of 11% in the month of June, and specifically, during the last two weeks when we went into sale, it was significantly higher. I don't have the breakdown of that, but it was upwards of 20%. That is helpful. The second question was on the inventory part. You did highlight that in your effort to obviously reduce the inventory, there was EOSS, which was pretty poor. We did mention that maybe on the private label side, the traction is limited. As we stand today, is the inventory situation stable, or it is still a little on the higher side, where we may have to, say, increase the EOSS days potentially or percentage to normalize it before the festive comes in? Hey, Nihal, Karuna here. See, as of 30th June, we did have some higher inventory on private brands. We expect that to normalize in July, August, and the inventory should come down for private brands. Having said this, on beauty, the beauty growth has been quite good, and the inventory will be at peak levels even in the coming quarters. Got it. My question was on Incus. Just to understand that in terms of, say, getting the backing in place and also the brand system, that is totally being worked on, and now incrementally, we're just gonna add stores based on how the response is, or this is also something we are still gonna be putting in place, and it will be a gradual scale up for this brand, even over the next one to two years. Our plan... I mean, firstly, it is a separate team which has been set up for Incus, and it is operated entirely differently to Shoppers Stop because it is a different bucket and different brand. It is in its pilot stage, and we aim to have 10 stores by the end of Q2, which is when we would have more results to share. One last question: What will be the ASP for this brand on average? Sorry, Nihal, you were very fast. I'm so sorry. I was asking, what will be the ASP of InTune? It is between INR 400, INR 450 to INR 500. Thank you so much. Appreciate it. Thank you. Thank you. The next question is on the line of Gaurav Jogani from Axis Capital. Please go ahead. Thank you for the opportunity, sir. Just for clarification, you said 10 stores in India by the end of Q2? Yes. Okay. My question is with regards to the actually capital expenditure for the quarter. If you look at the CapEx represented as an expenditure number, that number is down by 62%. Just wanted to get a sense from your end, how should we look at this gap? Because this has been coming down on an industrial basis. Gaurav, Karuna here, Gaurav. Your voice was not clear. Are you talking about other expenses in the GAAP numbers were declined by 4%? Yes. Karuna, if you see that was INR 162 crores odd in Q1 FY '2023, and now it is around INR 146 crores odd in Q1 FY '2024. You know, on an absolute basis, it is down. Just to get a sense, you know, how should we model this going ahead? See, what happened in effect 23 was some of the lease rental payments, we could not open the store and some hiccups on signing the final agreement. The Ind AS 116 got invoked in the second and third quarter, and that's the reason there was a higher lease rental expenditure. Whereas in this quarter, we ensured that all we are accomplishing Ind AS 116. I'm sure you understand the Ind AS 116 regulation. I mean, once the lease agreement is completed in the final term period, then the Ind AS 116 of ROU asset and ROU liability start. That's one of the reasons. The other one is, of course, we are also monitoring all the expenses. Wherever it's possible, we are reducing the costs as well. Should the amount that we are seeing, you know, on an absolute basis, can that get separated or, you know, we might see some spike, you know, as the store openings start coming in the front due to all this? It's difficult to say that right now, but very unlikely, because we would like to include the entire lease rentals in ROU asset liability from the beginning of the lease term itself. That's what we ask for, because it gives a correct picture if somebody is referring to the app numbers. Got it. Sure. Karuna, regarding we talking to any. You know, we do understand that we, this time has been impacted largely due to this buying environment in the apparel space. How do we, you know, look just ahead? Because on a full year figure basis also, you know, hasn't really picked up over the last many quarters. This has been in the range from that 2% odd mark despite the store addition. I mean, if you see the FY '2018, it was around 59%, which is actually the top line growth for us. Do we see developing volumes here, the stores have also mentioned that the additional store has also come in. How should we look at this? Overall, at a volume level, we were largely flat for the quarter. As you rightly mentioned, apparel has been benign, and that led to a little bit of a slowdown. In the medium term, we expect the growth to come back, and we would expect high single-digit or a low double-digit growth, which is what we are aiming for, and that's what we would see expected. Obviously, this would be a combination of like-for-like and the new store, and as the new stores get into effect, that's when we see the impact. Cool. Okay. Sure. Thank you very much. Thank you. We have the next question from the line of Ankit Kedia from PhillipCapital. Please go ahead. Two questions from my side. First is on the ESOPs. There were INR 3.5 crore ESOP expenses in the quarter. Can you just quantify for the next two years, what would be the ESOP expenses we should build in, and how much dilution would come in to the current company? Ankit, this year, it should be in the range of INR 10 crores-INR 11 crores. Next year, see, as you are aware, we granted the scheme last year in July 2022, and it always happens. The first year is higher and second year is lower. I mean, it's more of a reverse of approaches. This year I would expect between INR 10 crores and INR 11 crores. Next year, it should be much lower than that, and year four would be a very low single-digit number, Ankit. When I say year 4, it will be effect 2026. Just one. I'm sorry, what's your second question, Ankit? Dilution. It's overall, it should not exceed more than 1.8% or 1.9%. Nothing more than that. Over four years? For a period of four years, for the entire scheme. You are right. My second question is regarding the beauty distribution business. This quarter, we saw low teens top line. You know, you had guided for, you know, INR 175 crore-INR 300 crore revenue for this business for the year. How should we build this at the back end for the subsequent quarter four? Are we on track to achieve that guidance or, you know, how should we monitor this business? We were just ahead of budget in the first quarter. The second quarter is progressing well. The launch of Armani has got pushed back by a month and was to launch in July, will happen in August. To that extent, we're broadly in line with our plans. The two big factors which come into play is Armani is the largest player by large, and hence we specifically mentioned that. The second, big kicker will be when Bars is launched, and we are planning to have the Bars launch in Q3 of this year. By design, it is back-ended, and we are on track as of now. Sir, when you say, you know, on the new investments, software, private label, SS Beauty online and InTune, how much, you know, back-ended investments for all three should we build in our model, you know, for this year and next year, in these businesses? InTune will probably be loss-making for a couple of more years, given that you will have aggressive store expansion in year one, and they will take at least 18 months to break even. Along with that, obviously, beauty B2B will also take time to break even or just be break even in this year. At least in the initial quarters, what should be the impact on EBITDA for these businesses? On software, the investment's already done, and we don't expect any further investment into that. The SS Beauty part in also, the investment on the build itself is over, and now it is about growing the business, and we intend to run it as a omnichannel business, since we wouldn't expect it to be very large. On InTune, and again, InTune, we expect it to be break even from year one itself. To that extent, we don't expect it to be a significant impact on the bottom line. Sir, can I ask one more question? Could you just, you know, share the store economics for InTune? How are you looking at it from a gross margin to EBITDA margin, CapEx per store? That will be helpful for us to build a model. I mean, it's a fair question, Ankit, but as I said, it's only three stores. We are extremely delighted with the results that we have seen, but at the same time, it's still early for us. The guidance which I gave in terms of how we expect the EBITDA is based on what we have budgeted, and we are ahead of that. I would like to take another quarter to have a bit more experience in terms of what we are seeing before we report. I mean, as you know, it needs to go through the full cycle of the season, including the end of season sale, et cetera. The results what we are seeing currently, the three stores, actually, they are trading without any end of season sale. We actually launched them during the end of season sale at full price, and they are stacking up well compared to rest of the market. That's encouraging. I would like to give more details on it once we've had more stores open. This is helpful, sir. All the best. Thank you. Thanks again. Thank you. We have the next question from the line of Varun Singh from ICICI Securities. Please go ahead. Am I audible? Yeah, you are. Okay. Okay, yeah. Thank you very much for the opportunity, sir. Two questions from my side. First is, when I look at the results, one impression that I have is, performance in private label has been much, much lower compared to the branded products. I mean, also, I mean, looking at the outperformance in the beauty and the necessary segment, that is quite appealing. Having said that, I mean, given 12% ASP and 8%-9% retail expansion, I mean, looking at 98 stores, even though we have not added any stores, but looking at the number of store in the base better, 9% retail expansion, 5% ASP, 4% overall revenue growth and flat revenue growth in private label. I mean, what I try to understand is, our branded business has performed different compared to private label. Given the general industry slowdown in apparel that we are facing, as Venu had also highlighted, I mean, I would, as an analyst, expect private label to outperform the branded players, given their lower ASP, et cetera. How should we, you know, kind of understand this underperformance in private label despite the overall industry general slowdown? This is my first question. Uh, so if I take that into two parts, first is, uh, within apparels, private brand and the national, international brands that we have, their performance was on par, so they were very similar. Uh, the overall branded business is ahead, primarily led by the beauty and non-apparel growth. And, uh, as you said, the overall apparel business was, uh, denied in terms of the market itself, and the private brand has followed that trajectory. Within that, again, uh, we had some, uh, it was a couple of brands which pulled out the overall number. Uh, Indian Wear was a star outlier and a star performer across both Haute Curry and, uh, Kashish. Similarly, in kids, the brand Carrot did extremely well. Within men's In this category, specifically, Life as a brand was well behind the curve. That's one which we need to fix. Understood, sir. Even like frankly, looking at only private label revenue growth, which is flat and, 9% retail expansion in the departmental store. Also, I mean, as you alluded that the performance in April was similar for both branded and, private label, assuming only April, in the year, I mean, in the respective segment. Still, sir, I mean, do you think this performance is, still, I mean, much more subdued compared to, like, what it should have been? I agree. We had expected it to be better, specifically April and May was challenging, which pulled down the overall performance at par rather than ahead of the rest of the apparel categories. That's something which we are conscious of. We've seen revival in June, we expect with the launch of the new season in August, for this to come back. I mean, sir, what I intended to ask that, is the problem structural or temporary or seasonal? I mean, if I can put it that way. It's definitely a seasonal issue, and as I said, within western wear, the product performance was not slightly below par. The overall market also was low for western wear, but we were hit probably a bit more on that. It's more seasonal, and that's the beauty of private brands, specifically because as the season changes, you get in fresh merchandise, and it's about making sure that you clear the inventory that we have built up to be able to launch the new brands, which is what we are doing. Got it. Got it. Sir, my second question is, now that, I mean, since you joined Shoppers Stop in November 2030, I mean, more than two years, that all the strategic interventions that you executed very, very rightfully in all different segments. I mean, if I understand correctly, whatever incremental store addition after you joined, that we have done, that would now reflect almost maybe 25% new store in the, I mean, in the total, whatever departmental store that we have integrated. On the side of the business, I mean, we are doing quite detailed on the departmental store side of the business. How much of the journey you think that you have already traveled? Like, how happy you are with regards to the interventions that you have executed, even after 2023 was a COVID free year? Are the commitments now going forward, I mean, the internal side of the business, excitement, high growth, et cetera, I mean, that I understand. On the departmental store, on the branded side of the business, you think more fine-tuning is required or, like, how, what is your candid assessment of what we have already done so far? If I take that into parts, we've opened 20 stores in the last 2.5 years. We have also optimized some stores, and the third thing is we've been renovating, and that's something which is still in progress. We still have about 17 stores which are old and need work, which we will do. What we are seeing is that the stores, the new stores, their productivity is about 15% higher than the older concept stores. The CapEx is also optimized, which definitely helps from an overall return perspective. In the stores that we have opened, what is appealing, and we're getting good customer feedback, is in terms of the design, the open facade, the fixtures being a lot more compact and the lights being much more brighter. Going back to that first point on the total stores that we opened, I must also flag that as a part of our regular process, we also close stores. We closed, I think, if I'm not mistaken, about five stores in the last two years. Maybe even in the last three, but in the last two years, specifically, it was around five stores. On the branded side of the business, do you think any fine-tuning is required or that's okay? The branded side of the business is in very exciting times, because with the concept of a lot of DTC brands, it also gives us the opportunity to bring in some exciting brands into our stores, which is what we have been doing, and we'll continue to do that. What we do is to make sure that we have a regular churn based on customer requirements, customer feedback, at the same time, performance. We would churn between 20%-25% of the brands in a at the end of a quarter and definitely within the end of the season, to make sure that each time a customer comes into a store, there are new brands that we are able to offer. Got it, sir. That's it from my side. Thank you very much. Thank you. The next question is from the line of Shalini Gupta from East India Securities. Please go ahead. Good morning, sir. Just wanted to understand, what has been the growth of the department stores, without beauty, without, without your private brand? Just the department stores, what has been the growth? Shalini, good morning. I think that, I mean, both private brand and beauty are an integral part of the department store. I mean, we don't look at it differently or separately, and I don't think we can do that in any form. What I can say is that department store format growth itself was slightly ahead of the total curve at 5%. Okay, sir, what has been the online sales growth? We don't separate out online and offline because of the fact that a number of customer journeys start offline and finish online or vice versa, especially because we are in the premium segment, we sell products at high selling prices. Hence, a number of customers would start the journey online, but would finish it offline. They would come and specifically see the product. I mean, like, watches as an example, where they would want to feel the product, see the product. It wouldn't be fair for us to separately report online. That's what we don't do. Sir, home stores, would you say, well, how much sales were in this quarter? As you know, we have Kavindra Mishra, who's joined us as the CEO for HomeStop, apart from also being the Chief Commercial Officer of Shoppers Stop as a whole. Under his leadership and with a new business head for home, we have started the revamping of our home product. We have opened two new stores of HomeStop, one in Dehradun and the second one in City Market, and also renovated about four stores within the Shoppers Stop ecosystem. All of these stores are doing extremely well, and we are very happy with the performance. Based on that, we intend to continue the expansion for HomeStop as we go forward. Okay. sir, last question. The footfalls, you know, I understand you give the numbers. You've given basically the physical footfalls, as well as the people coming to your website. If you could just give, say, what has been the physical footfall for you people? Shalini, Venu clarified when Nihal asked this question. Last year was 2.5 million, as he said, is 11.4 million, and there's an increase of 8% on footfall purely in offline. Right, sir. Thank you. Thank you so much. Thanks, Shalini. Have a nice day. Thank you. We have the next question from the line of Gaurav Gandhi from Glory Tail Capital Management. Please go ahead. Yes. Hi, sir. Congratulations on the decreased progress overall. Sir, I have a question with quite medium to long-term perspective. Sir, if you look at the market today, it has become so competitive in terms of, you know, pricing, variety, store appeal, et cetera. You know, the way these Studio, Trends, H&M, Zara, Westside, and all kind of stores coming now. The only factor, I think, which will keep the customers stick to or, you know, will attract towards Shoppers Stop will be the fashion and the variety which is with us. How do we manage the style and the fashion and the variety which is with us, and are we able to catch the pulse of the market, especially the young generations? It's a very good point that you mentioned, Gaurav. I think you are right in terms of the product being at the heart of it, and making sure that we are having the latest trends. If I take a step back, as Shoppers Stop, we are a house of brands, and what we offer is the opportunity for our customers to shop multiple categories under one roof, and within these categories, we bring in a curation of the best of each of these brands. Our buyers are tasked and are experts in looking at what is coming in, and based on that, bringing the latest trends into our stores with the national brands, as well as in the case of private brands, we also have designers who look forward in terms of what are the coming trends, and based on that, bring the latest, I mean, design the latest products for them to be in the store, whether it is the color, the trend, the fabric, the silhouette, and indeed, the overall segment of the lifestyle that is going to come in trend. I mean, like, leisure wear was the initial trend a year back, which moved to co-ords, it moved to Victorian dresses. That's a shift which will keep happening. It's our job to predict and bring that trend into our stores at the same time as the rest of the high street. That's the first part. Over and above that, what I would add to what you said is while product is absolutely at the heart of what we do and very important, it is also the experience that we offer in our stores and the loyalty that our customers have to us because of the exclusive benefits that they get and being a First Citizen customer. As you know, our First Citizen program is the longest standing loyalty program in the country and definitely within retail. We are blessed by the business that our customers give us because of the experience that they get in our stores and the benefits that they get because of the loyalty. First is loyalty. The second is the experience itself in our store. Again, one thing which is unique within our stores is the personal shopper, and the personal shoppers have now upgraded to being personal stylists. What they do is offer our customers help and advice in terms of what the latest trends are, how garments are paired, and how they can buy an entire outfit rather than just a single garment. This is something that we train our personal stylists every season, and based on that, we are able to help and add value to our customers when they are shopping. Equally, the parallel to that, and for example, which I mentioned in my speech as well, is makeovers that we do on beauty. I think it's well repeated that we did over INR 4.5 lakh makeovers last year, and in this quarter alone, we've done over INR 1.5 lakh makeovers. What we find is that when we do these makeovers, again, as you know, it is something personal, and it's where there's an engagement between the makeup artist and the customer. The customer is able to have effectively education, at the same time, also try out new things while they are in the store, and in that process, they are able to also they end up buying more from us as they go forward. I think all of this, if I summarize in a nutshell, if we look at how are we doing, we measure ourselves on NPS. This is something which we had put a pause on during COVID. We've now restarted, and we're delighted by the fact that our NPS scores, with the constant focus on it, has moved from 60% to 75%, which I believe is one of the best in class in the whole industry. Okay. In that case, sir, I hope that, you know, our focus, you know, we keep on that. Another question was, what do we do with the unsold inventory in the apparel category eventually? That are more than hope. I'm confident that will happen. In terms of the unsold inventory, again, it's something which we deal with as the season runs out. We try and clear that out during the End of Season Sale, which is what we are doing now. By the end of this quarter, the large part of it should be clear. All right, sir. Thank you very much for explaining it to me. Thank you. Thank you. We have the next question from the line of Amit Sinha from HDFC AMC. Please go ahead. Yeah. Hi, hi, sir, good morning, thanks for the opportunity. My question was on the apparel segment overall, you have mentioned, you know, clearly this quarter, we have seen some moderation in the segment. Just to get some more color there, you also said that, you know, the issue is seasonal in nature. If I do math, the overall segment moderation, which at least in the SSD side is significant. You know, just wanted some more color with which sub-segment, children wear or western wear, or if you can provide some color on the same, you know, if what is the kind of trend if, you know, in the overall apparel segment, mix of private label which you are seeing? Sure, Amit. I'll try and give a little bit more color, as you asked for. Within the segment, children wear outperformed pretty much all of the brands that we have in our store and had a fantastically great season. This is the one which did extremely well, followed by men's, and men's also grew over the previous year, same quarter. Kids was largely on track. Now, if I look at the category which didn't perform well, it's western women's wear. Within western women's wear, the casual denim brand was the one which had a muted overall growth, and the other one was sleepwear, specifically. I think, again, sleepwear, if I go back during COVID, obviously, this was one which had peaked and had done extremely well. Up against those, some of those strong comparatives, it did have a muted, or rather it didn't grow, if I'm being completely honest. It's western wear, or western women's wear, which, was a bit of a pain point for us, and, that's one which we are correcting as we go into the new season. Okay. You know, so apart from the, you know, last year, same quarter high, pent-up demand, you know, which kind of, you know, on an official basis, which kind of, impacted this year's number. You know, what are the other reasons, you know, specifically when you say this, problem is seasonal in nature, just wanted to understand that part, sir? I mean, is there anything which was, one-off during the quarter, which impacted the demand? Is it, you know, a typical, you know, inflation-led, moderation in the overall demand environment? No, there was nothing one-off in the quarter. It is broadly, we have been at par with the environment. Private brands was not immune to what the rest of the industry has experienced. I think the reason I say seasonal is because we obviously launch new ranges at the end of season sale, which is when we offer some completely new the latest trends that come in, and this time it will be around modern work wear, which is what we would be launching as we go into the new season, followed by the festive season. We expect the demand to come back as we go into that period. Okay, sir. Lastly, for the full year FY '2024, is there any, you know, target or any aspiration we have for the apparel, segment as a whole? We do have internal targets. That's not a guidance that I would like to roll out here. Thanks a lot, sir. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all participants in the conference, please limit your questions to one per participant. Should you have a follow-up question, please join the queue. Thank you. We have the next question from the line of Tejas Shah from Spark Capital. Please go ahead. I have two questions. I'll just try to stretch them to us. Your strategic pillar, slide, which you have been quite consistent in sharing, value detailing of fast fashion was never kind of part of that plan. How should we see InTune, kind of in light of that slide? Second, what is the clear set for InTune? Fast fashion has become a very crowded space, so how do you believe that will have, like, a successful position or right to win there? Lastly, we have seen that value retailing is a very supply chain intense, format. After what store count, the format will demand investment in the market in terms of warehousing or other capabilities. Thanks for that, Tejas. As I said, it's early stages. It is a pilot which we are looking at. Let me answer your questions and how it links back to our strategy. InTune is a part of our private brand strategy because it is about controlling end-to-end from design to what we offer to our customer, being everything being done in-house and from the manufacturing itself, and that's where it fits into it. In terms of value retail itself, the reasoning behind that is, if you look at the overall market in India, the largest segment of the market is in the tier two, tier three, and beyond, along with a huge unorganized market. Today, organized retail is less than 30% in apparel, and 70% is in the unorganized space, and the unorganized space is around INR 1.3 lakh crore. What we have been seeing over the last 10 years is the move from unorganized to organized, and hence, that segment is very, very large. One thing I would specifically flag is InTune, while it is priced attractively, it is fashion for all, and that's the segment that it is into. What it does is to offer the young customer, the young family, choice across all of the categories of men's, women's, and kids, with kids being something which we are specifically focused on, and that becomes a big factor. In terms of the supply chain, which is the other question that you did ask us about and having strength to that, we have warehouses across the north, south, east, and west, four DCs across the country, our capacity is committed, we have land, and we have that capacity already for expansion that we have planned for this year. It is flexible, and we do have the ability to expand that quite quickly. This is not something which we would worry about. What we have, along with the space that is available, which can be quickly expanded, will definitely take us till FY '2025. We will take that expansion as the need arises. effectively, the next three years is covered from that point of view. The overall CapEx requirement for that. We already committed. It's committed, and it's about INR 3 crores, so that's already done. All right. Perfect. Thanks for the detailed answer, sir. Thank you. We have the next question from the line of Disha Sait from Anvil Share and Stock Broking Private Limited. Please go ahead. Hello, am I audible? Yes, ma'am. Good morning, sir. I just wanted to check what is the like-to-like growth since we have expanded to so many stores. Our like-to-like for the quarter was at 1%. ...At 1%. The five new stores which are going to expand in 2024, most of them, all of them would be in tier two, tier three, or we plan to open in tier one? It is a combination, I would say that almost 75% of it would be in the tier two, tier two. I wouldn't say three, tier two predominantly, with a few in tier one. We do have a store in Pune. There is a store in Hyderabad, which we have slated. Along with that, we do have stores in Guntur, Kochi, Allahabad, Imphal, etc. Sir, what, in your view, considering the second half is going to be better, would be the sales growth for coming two years? Considering we have to adjust the price as prices have come down, we have to impact our overall sales growth. We won't have more of price growth, we'll have volume growth. In your view, what will be two-year sales growth in? We expect to have, I mean, overall, the price, as you rightly said, is something which on a product basis, we are not increasing. The premiumization that is happening is more from a product mix point of view, and that is what is leading to the price increase rather than absolute price increase itself. That's something which we are very conscious of. In terms of the growth for the future quarter, that is something which we don't give guidance going forward, and hence we wouldn't do that. What I would like to, point out is that the, I mean, for the last 13 quarters now, we've had higher, average, I mean, the transaction values are, the overall bill values where customers buy from us has continuously grown, and that is because they are buying more products from us each time they come to us, and that is a constant emphasis for us to continue growing that. We can expect, sir, around high single-digit growth for the coming years. Disha, we normally don't give any guidance. No problem. Sir, in terms of margins, this time it was 5.3%. With premiumization increasing every quarter, we expect it to improve going forward. Also on the other side, we are taking out our InTune module, which is, I believe, lower EBITDA margin. How is the mix going to play going forward? That's a good question, Disha. On premiumization, please understand, it's a combination of both brands as well as private brands. On brands, whether it's the margins are fixed, merely premiumization, may not increase the gross margin significantly. To answer your next question, with InTune's margins would be largely, I mean, as it should be, still in the pilot stage, the gross margins would be more or less, the same gross margin of the company. We don't expect to have a significant dilution because of InTune. Good to hear, sir. That's it from my side. Thanks, Disha. Have a nice day. Thank you. We have the next question from the line of Jay Gandhi from HDFC Securities. Please go ahead. Yeah, thank you for the opportunity. I just want to clarify one, the guidance of high to high single digit on net revenue or gross revenue? What difference it makes? I mean, both gross and net are in tandem. I mean, GAAP or non-GAAP, that's what I mean. We give only the non-GAAP revenue growth, Jay. No, fair enough. Sir, this is, one is on this, on rental bills. I was just looking at your rent expenses last year, FY 2023, it was about INR 416 crores. That works out to about INR 88 per sq ft per month. Now, if I look at 1Q, the 1Q number, which is about 119 crores, annualize it, and let's say, you know, a certain growth rate that you're going to have, the rental bill is about INR 107 per sq ft. This is a 30% jump on a first sq ft basis. Just wanted to ask you, just like, is this some one-off year or are rental bills overall in the, you know, retail space meaningfully increasing? I am not sure from where you got this last year. Just clarify, are we referring to? Sure, sure. The standalone. No, just hold on. Last year, I mean, if you are referring the non-GAAP numbers, Jay, let me open the file. I mean, it's a significantly higher number. I mean, not INR 500 crores. It may be anywhere between INR 580 crores-INR 600 crores last year. Just give me a second. Just give me a minute. Yeah. Last year, in FY 2023, we had a rental income of INR 600, rental expenses of INR 600 crores. INR 600 crores? INR 599 crores. That's why if you have seen, our last Q4 investor presentation, we had presented a INR 600 crore total rental expenses. This year, we could have a modest single-digit increase as compared to the last year. There is neither one-time impact last year, nor we expect anything this year. Okay. No, fair enough. Sir, I just wanted to ask you from a philosophical point of view, which category kind of lends itself to stickiness? Is it apparel or non-apparel? Just want to understand the mix for the end consumer who walks into your store. I think there are a number of categories which would lend itself to that. Beauty is definitely one where, because of makeover engagement experience, the stickiness tends to be higher because it's a category where, I mean, it's a choice, it's a choice of color, product, and also a combination. If you, I mean, the beauty makeup regime could be a combination of three or four products, and the order in which it is done, the way it is done, is quite important, and this is where our makeup artists make a big difference. Beauty definitely is one category where you do have that advantage of stickiness coming in. Apparel tends to be brand led, and specifically, again, customers shop for brands. As a house of brands, we give the choice of multiple brands under one roof, which is what our customers come to us for. Combined with our personal shopper, who are personal stylists and help customers make choices in terms of how to pair and bring out the latest looks when they buy. That's something which again, gives us I mean, gives customers a reason to come back to us. Right. Great. Thanks. I think I'm done, so thank you so much for this. Bye, Jay. Thank you. Ladies and gentlemen, that was the last question for today. We thank the members of the management. On behalf of Shoppers Stop Limited, I conclude this conference. We thank you for joining us, and you may now disconnect your line. Thank you. Thank you.