By  on August 16, 2012

NEW DELHI — It’s not a new beauty retailer. But it’s renewed. And the name of the stores says it all, New U.

The chain recently opened two new flagships in the most sought-after markets in New Delhi. The New U stores are operated by H&B Stores Ltd., a wholly owned subsidiary of fast-moving consumer goods company Dabur India Ltd., which has this year crossed the billion-dollar mark in sales. The two new flagships represent the first beauty retail venture for the group. The stores boast their own product lines in skin care, hair oils and shampoos, and they have undergone a series of changes in positioning and evolution. But with a new strategy for the beauty market —  and a plan to grow the existing 44-store chain to more than 70 over the next year — Parikshit Sharma, chief operating officer of H&B Stores Ltd., is confident that this is the winning formula.

“Our earlier stores were much bigger. We have scaled them all down in size and have got the mix right,” he told WWD.

The stores have primarily been focusing on the mass segment and stock most of the popular brands in the mass category, such as L’Oréal, Revlon, Ponds and Nivea. They are clearly segmented and labeled with wall units where customers can experience and touch the brands.

However, a new feature was on display at the Khan Market store, when it opened with balloons in pink and white — the retailer’s colors — and much  celebration. A premium fragrance section stood on each side of the main door.

New U is now looking beyond its 44 stores, mostly in North and South India, and has been probing possibilities in the West, such as Mumbai. The company has been opening stores in malls and in the more popular local markets, where independent  smaller shops have dominated the beauty business.

The new Defence Colony market store, for example,  faces competition in beauty mainly from all purpose and small department stores, which stock select brands in crowded stores. There is only one exclusive beauty shop, which is a little more than a hole in the wall, but it has maintained a committed customer base over the last 20 years. By contrast, the organized and modern interior of New U, combined with its trained beauty advisers and promotions on select items, seems like a change maker in the beauty business.

New U has also entered another beauty category, which has been ripe for growth. That is the personal grooming category. The store offers homemade brands as well as select, well-known labels, such as QVS in exclusive partnership. Products range from nail buffing implements, nail files, elbow scrubbers, tweezers to simple hair accessories.

Sahni observed that although the private label brands account for 18 percent of the store product offering, the plan is to grow this category to an estimated 35 percent in the near future.

While admitting that the beauty retailer had made mistakes in the past, Sahni said the outlook on beauty markets was ‘very positive’ with a more highly educated customer than ever before. The Indian multibrand  beauty market has mostly been characterized by smaller, independent stores in local markets. Parcos, a high end beauty retailer, is in the more premium segment. The other player, which has done well is Health & Glow, which has a strong positioning in Southern India but has not yet made a dent in Northern or Western beauty markets, such as New Delhi or Mumbai.

Sahni believes that an online presence is essential for New U and a e-commerce site that has just been launched will be invaluable in adding more customers and business for the physical stores. In addition, there will be an even smaller store format to provide a quicker and easier shopping experience. Sahni described it as express and super express format. “These will be at select locations, including airports and will be approximately around 250 square feet in size,” he said.

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