Bath & Body Works Pivots to Consumer-First Strategy with India as Growth Engine
Global fragrance retailer Bath & Body Works Inc. is implementing a strategic reset to reignite growth after years of heavy discounting and sluggish product innovation dampened its brand momentum worldwide. The Columbus, Ohio-based company is shifting to a "consumer-first formula" approach, focusing on upgraded formulations, more disciplined marketing, and reduced promotions.
India Emerges as Strategic Priority in Global Recovery
This reset holds particular significance as India emerges as one of Bath & Body Works' fastest-growing and best-performing markets. India now ranks among the company's top five international markets by growth, positioning the country as a crucial lever in its global recovery strategy.
"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.
The fragrance maker entered India in 2018 through a partnership with Dubai-based Apparel Group and has since expanded to approximately 50 stores across major metropolitan areas. The company has also established a robust online presence through platforms including Nykaa, Myntra, and Amazon.
"We're learning a lot from how the Indian consumer shops across platforms, especially the speed and convenience expectations," Garrison noted. "It's helping us think differently about assortment, pack sizes, and how we show up digitally."
Strong Financial Performance Amid Global Challenges
Even as discretionary spending softened globally, Bath & Body Works' franchise partner Apparel Group delivered double-digit sales growth in India and high single-digit comparable-store gains in FY25. The group 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 from the previous year.
This contrasts with Bath & Body Works' global performance, where revenue declined 1% to $1.59 billion in the third quarter of FY25, while net income fell 27% year-on-year to $77 million, reflecting soft consumer demand and margin pressures.
Reviving the Fragrance Engine with Premium Innovations
While legacy scents such as Japanese Cherry Blossom, Champagne Toast, and Thousand Wishes remain global blockbusters, the company acknowledges it hasn't produced enough new hits at a similar scale in recent years.
"Japanese Cherry Blossom is a $250 million fragrance," Garrison revealed. "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 with 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 emphasized.
Bath & Body Works also plans to introduce upgraded body-care lines in India, with a stronger focus on ingredients and dermatology-led claims.
India as Testing Ground for New Retail Formats
India is being utilized as a test market for innovative retail formats. Later this year, the company and Apparel Group plan to pilot a new, smaller "neighborhood store" format of approximately 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, this format could inform store strategies in other parts of the world.
India is also emerging as a key market for testing how far premiumization can go. Despite broader caution in discretionary spending, Garrison noted 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."
This 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.
Expert Perspectives on Challenges and Opportunities
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 noted 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 explained, noting that Indian consumers are now far more aware of global value propositions.
While Bath & Body Works is leaning into quick commerce and smaller neighborhood 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. "Neighborhood stores can be spokes, but you still need the hub—the large store to communicate the brand experience."
Intensifying Competition in India's Growing Fragrance Market
The turnaround plan comes as Bath & Body Works rivals, including The Body Shop and Forest Essentials, are also competing for 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, supported 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 projected to grow at a 13.9% CAGR to $3.23 billion by 2033, according to market research firm IIMARC Group.
Macroeconomic and policy factors could further support Bath & Body Works' business in India. A stronger rupee helps franchise partner Apparel Group manage import costs more effectively, while potential trade agreements between India and key global markets could ease regulatory processes and accelerate shipments. Faster imports translate into better inventory turns and fresher products on shelves—a critical advantage in a category driven by novelty and seasonal drops.
