Bath & Body Works has a new formula for growth, bets on India

The Columbus, Ohio-based retailer is pivoting to a “consumer-first formula” strategy that focuses on improved formulations, more disciplined marketing and fewer promotions.

The reset is significant as India has become one of the company’s fastest-growing and best-performing markets, as well as a testing ground for how the brand develops its retail model. India is now among Bath & Body Works’ top five international markets in terms of growth.

“We are seeing strong engagement in stores (in India), digital markets and even express commerce, which gives us confidence as we evolve the brand and introduce further innovation,” said Tony Garrison, global vice president of Bath & Body Works. Mint.

The perfume maker entered India in 2018 in partnership with Dubai-based Apparel Group and has since expanded to around 50 stores across major metros and has also built an online presence through platforms like Nykaa, Myntra and Amazon.

Apparel Group brings more than 80 global brands to India, including Victoria’s Secret, Charles & Keith, Aldo, Crocs, Tim Hortons.

“We are learning a lot from the way Indian consumers shop across platforms, particularly their expectations for speed and convenience,” he said. “It helps us think differently about assortment, pack sizes and how we show up digitally.”

Even as discretionary spending softens, the brand’s franchise partner Apparel Group delivers double-digit sales growth in India and high single-digit comparable store earnings in FY25. It reported a 26% annual increase in FY25 revenue. ₹1,118 crore and net profit ₹20.5 crore, reversing the loss from the previous year.

Bath & Body Works’ earnings reflect margin pressures as well as weak consumer demand around the world. Its revenue fell 1% to $1.59 billion in the third quarter of FY25, while its net income fell 27% annually to $77 million. The company has three markets in terms of revenue contribution: US, Canada and International.

Stimulating the olfactory engine

While older scents such as Japanese Cherry Blossom, Champagne Toast and A Thousand Wishes continue to be blockbusters around the world, the company admits it hasn’t produced enough new hits on a similar scale in recent years.

“Japanese Cherry Blossom is a $250 million scent,” Garrison said. “I think we haven’t done a very good job of keeping up with some of the fragrance trends. We haven’t innovated a lot, and you’ll see that again this year. This is a year of big change for us.”

The company plans to elevate its home fragrance portfolio by offering higher-quality candle collections, gift-ready packaging, and deeper, more sophisticated scent profiles.

The broader aim is to encourage shoppers to shop within the brand rather than waiting for discounts. “We want customers to see the value, the scent quality, the ingredients and the experience in the product itself, not just in the promotion,” Garrison said.

Bath & Body Works also plans to introduce advanced body care products in India with greater focus on ingredients and dermatology-based claims.

New retail formats

India is also being used as a test market for new retail formats. Towards the end of this year, the company and Apparel Group plan to pilot a new, smaller “neighborhood store” format of approximately 500 square feet in select non-metropolitan markets.

These stores will focus heavily on essential body care products and hero fragrances, creating a more discovery-focused environment for first-time shoppers. If successful, the format could inform store strategies in other parts of the world.

India is also emerging as an important market to test how far premiumization can go. Despite a broader crackdown on discretionary spending, the company hasn’t seen a slowdown locally, Garrison said.

“India has actually been one of our strongest markets in the post-Covid period,” he said. “Even if consumers are careful, they still spend money on little luxuries that make them feel good.” This dynamic positions Bath & Body Works squarely in the “affordable indulgence” sweet spot, which it often capitalizes on when shoppers are turning away from high-priced beauty products or luxury purchases.

He added that macroeconomic and political factors could further support the business. A stronger rupee would help franchise partner Apparel Group manage import costs more effectively, while a potential trade deal between India and key global markets could ease regulatory processes and speed up shipments. Faster imports mean better stock turnover and fresher product on shelves; This is a critical advantage in a category driven by innovation and seasonal declines.

What do the experts say?

Retail experts warn that Bath & Body Works’ reset in India will not be smooth sailing, especially after years of promotion-led growth.

“This is a self-inflicted wound,” said Devangshu Dutta, founder of Third Eyesight, a consulting firm. “Brands sell at high volumes and inevitably resort to discounting when sales volumes cannot be met. Indian customers may expect prices to be right, leading to a large number of sales at the end of the season.”

The personal care market has become extremely crowded with a “tremendous amount of product variety,” making brand clarity critical, Dutta said.

“If you are not clear about what you are as a brand, you become another brand or a commodity,” Dutta said, noting that Indian consumers are now much more aware of global value propositions.

While Bath & Body Works has pivoted to express merchandising and smaller neighborhood stores, Dutta cautioned that premium brands still need larger formats to create experiential differentiation. “Fast commerce is a very curious environment. Customers are in search mode, not browsing mode, so brand discovery is a big challenge,” he said. “Neighborhood stores are possible, but you still need the centerpiece, the department store, to convey the brand experience.

The race intensifies

The comeback plan comes at a time when Bath & Body Works rivals, including The Body Shop and Forest Essentials, are also gearing up to grab a share of the Indian consumer’s wallet.

The Body Shop plans to achieve this ₹1,100 crore revenue will be generated in India in the next three to five years, with strategic support from Auréa Group, which acquired the brand last year.

According to market research firm IIMARC Group, India’s fragrance market was valued at $1.0 billion by 2024 and is said to reach $3.23 billion by 2033, at a CAGR of 13.9%.