In a bid to improve margins for its beauty and personal care business, homegrown beauty and fashion brand Nykaa is in the process of converting some of its regular stores into Luxe ones, according to two people aware of the developments.
The company’s Luxe stores feature international luxury beauty brands such as Huda Beauty, MAC, Dior, and Givenchy along with Nykaa Beauty, the in-house collection of beauty products.
Currently, the company has 221 offline stores, of which 78 are in the Luxe format. In the first phase, the company is aiming to convert around 10-15 of the regular stores into Luxe in major cities. After this, they will look to convert another 20 stores, one of the persons said.
“They are now looking to step up customer acquisition in BPC after some dull quarters,” another person said.
Nykaa is expecting a revival in its revenue growth in FY25. In the latest update, the company said it expects the net revenue to grow in low-to-mid twenties year-on-year in Q4. This would be higher than around 17% recorded in FY23.
In Q4, the company opened 19 new stores and said that it witnessed strong retail performance supported by same-store sales growth.
The company has also stepped up marketing for the brands under House of Nykaa by onboarding Bollywood celebrities. While it has appointed Rasha Thadani as the new face of its cosmetics business, for Dot & Key, it recently appointed Shanaya Kapoor as the brand ambassador.
For its fashion business, the company has shifted its focus to reducing burn and improving take rates.
“We suspect FY26 will be an encore of FY25, wherein the focus is likely to be on improving take rates, reducing customer acquisition cost and improving incremental unit economics,” HDFC Securities said on Nykaa’s fashion business in a recent note.
In the update, Nykaa said that the net revenue growth for the business is expected to be lower due to the muted performance of Nykaa Fashion-owned brands and lower content-related activity in the fourth quarter of financial year 2025, which typically peaks in the third quarter. However, the GMV growth is likely to be in high teens.