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 centred around upgraded formulations, more disciplined marketing and fewer promotions.

The reset matters as India is emerging as one of the company’s fastest-growing and best-performing markets and is also becoming a testing ground for how the brand evolves its retail model. India now ranks among Bath & Body Works’ top five international markets by growth.

“We’re seeing strong engagement across stores (in India), digital marketplaces and even quick commerce, which gives us confidence as we evolve the brand and introduce more innovation,” said Tony Garrison, global vice president at Bath & Body Works, in an interview with Mint.

The fragrance maker entered India in 2018 in partnership with Dubai-based Apparel Group and has since expanded to about 50 stores across major metros, while also building an online presence through platforms such as Nykaa, Myntra and Amazon.

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

“We’re learning a lot from how the Indian consumer shops across platforms, especially the speed and convenience expectations,” he said. “It’s helping us think differently about assortment, pack sizes and how we show up digitally.”

Even as discretionary spending softened, the brand’s franchise partner, Apparel Group, delivered double-digit sales growth in India and high single-digit comparable-store gains in FY25. It reported a 26% year-on-year jump in FY25 revenue to ₹1,118 crore and a net profit of ₹20.5 crore, reversing a loss in the previous year.

Globally, Bath & Body Works’ earnings reflect a soft consumer demand as well as margin pressures. Its revenue declined 1% to $1.59 billion in the third quarter of FY25, while net income fell 27% year-on-year to $77 million. The company has three markets in revenue contribution – US, Canada and International.

Reviving the fragrance engine

While legacy scents such as Japanese Cherry Blossom, Champagne Toast and Thousand Wishes remain global blockbusters, the company admits it hasn’t produced enough new hits at a similar scale in recent years.

“Japanese Cherry Blossom is a $250 million fragrance,” Garrison said. “I think we haven’t done the best job of keeping up with some of the fragrance trends. We haven’t done a lot of innovation, and that’s what you’re going to see this year. This is a big change year for us.”

The company plans to elevate its home-fragrance portfolio, bringing in more premium candle collections, gift-ready packaging and deeper, more sophisticated scent profiles.

The broader goal is to encourage shoppers to trade up within the brand rather than wait for markdowns. “We want customers to see the value in the product itself, the fragrance quality, the ingredients, the experience, not just the promotion,” Garrison said.

Bath & Body Works also plans to introduce upgraded body-care lines in India, with a stronger focus on ingredients and dermatology-led claims.

New retail formats

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

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

India is also emerging as a key market in testing how far that premiumisation can go. Despite broader caution in discretionary spending, Garrison said the company has not seen a slowdown locally.

“India has actually been one of our strongest markets in the post-Covid period,” he said. “Even when consumers are careful, they still spend on small luxuries that make them feel good.” That dynamic positions Bath & Body Works squarely in the “affordable indulgence” sweet spot, often benefiting when shoppers scale back from higher-priced beauty or luxury purchases.

Macroeconomic and policy factors could further support the business, he added. A stronger rupee helps franchise partner Apparel Group manage import costs more effectively, while a potential trade agreement between India and key global markets could ease regulatory processes and speed up shipments. Faster imports translate into better inventory turns and fresher product on shelves, a critical advantage in a category driven by novelty and seasonal drops.

What experts say

Retail experts caution that Bath & Body Works’ reset in India won’t be without challenges, especially after years of promotion-led growth.

“It’s a self-inflicted wound,” said Devangshu Dutta, founder of Third Eyesight, a consulting firm. “Brands pitch high, and when volumes don’t come through, they inevitably fall back on discounting. Indian customers can wait for prices to be right, which leads to a very large number of sales happening at the end of the season.”

Dutta said that the personal care market has become intensely crowded, with a “humongous amount of product diversity”, making brand clarity critical.

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

While Bath & Body Works is leaning into quick commerce and smaller neighbourhood stores, Dutta cautioned that premium brands still need larger formats to build experience-led differentiation. “Quick commerce is a very curious environment. Customers are in a seeking mode, not a browsing mode, so brand discovery is a huge challenge,” he said. “Neighbourhood stores can be spokes, but you still need the hub -the large store to communicate the brand experience.

Race intensifies

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

The Body Shop, plans to achieve ₹1,100 crore in revenue in India within the next three to five years, buoyed by the strategic backing of Auréa Group, which acquired the brand last year.

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