Outlook Business Desk
Over the past two years, major Indian retailers—including Reliance Retail, V-Mart, Arvind Fashions and Aditya Birla Fashion—have shut down hundreds of underperforming stores to cut costs and boost profitability. According to a report by the Economic Times (ET), the shutdowns, triggered by a slowdown in demand and rising operational costs, led to a “clean-up” phase.
Reliance Retail alone closed more than 2,100 outlets across its grocery and fashion verticals in FY24, as inflation squeezed mass and mid-range consumers. Others followed suit: Aditya Birla Fashion & Retail shut over 200 stores, Arvind Fashions closed 70, Spencer’s shut 47, and both Shoppers Stop and V-Mart closed nine large-format stores each, as per the report.
Many of these stores had opened during the post-pandemic “revenge shopping” wave as consumers went on a shopping spree after the lockdown. But as consumer sentiment cooled and essentials became costlier, discretionary spending dipped—especially in smaller towns.
With the worst behind them, retailers are eyeing selective and profitable expansion. As per the ET, Arvind, which holds licenses for brands like Tommy Hilfiger and US Polo, plans to add 150,000 sq ft of retail space in FY26—up from 120,000 in FY25.
Aditya Birla Fashion is now set to open 300 brand stores and 20 new Pantaloons stores this year, targeting metros and tier-1 cities. It’s shifting from aggressive expansion to a more strategic approach, aiming for long-term profitability rather than just increasing store count.
Executives say the focus now is on strategic location selection and higher operational benchmarks. V-Mart chairman Lalit Agarwal told the publication that the company is applying learnings from previous missteps to ensure better property choices and rental economics.
Spencer’s Retail has set high benchmarks for new store investments, aiming for profitability within the first six months of operation.
V-Mart recently closed 9 of its large department stores to improve its retail network. The company is now focusing on a smarter expansion plan that aims for better profits and more efficient operations.