Building on its success in the domestic retail market, Noel Tata-led Trent is now eyeing ventures beyond Indian borders. Sources reveal that the company is poised to establish its retail formats internationally, starting with a flagship store in Dubai. This strategic expansion coincides with the remarkable milestone of Zudio, one of Trent’s flagship brands, surpassing the INR 7,000-crore revenue mark in India.
Earlier, Trent postponed its global aspirations to strengthen its domestic operations. Now, armed with a robust and profitable business model, the traditionally conservative retailer is aiming to target the sizable Indian diaspora abroad, potentially becoming the pioneer in this endeavor, according to sources. While it may entertain the idea of an international partnership, nothing is confirmed yet. CEO P Venkatesalu stated that the company remains in the exploration phase regarding its future plans. “It’s too soon to discuss specifics at this phase,” he emphasised.
Industry observers note that Trent has successfully developed a sustainable and profitable business model, bolstering its confidence to expand its operations internationally.
Trent’s consolidated revenue has experienced a five-year compound annual growth rate of 45%, reaffirming its growth strategy centered around agile on-ground execution. Despite a slowdown in the apparel sector, Trent distinguishes itself as an anomaly, consistently delivering positive surprises in both revenue and profit margins.
In FY24, the company recorded yet another year of remarkable growth, witnessing a surge in net sales by 50% to INR 12,375 crore, and a nearly fourfold increase in net profit to INR 1,477 crore. This strong performance stemmed from a blend of robust like-for-like growth, aggressive expansion of Zudio stores, and notable traction in burgeoning categories like beauty and personal care, innerwear, and footwear.
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Operational Expansion and Store Growth:
During the March 2024 quarter, the fashion apparel brand Westside unit expanded its presence by adding 12 new stores, bringing the total store count to 232. Additionally, the value fashion concept Zudio inaugurated 86 new stores, elevating its total count to 545.
Over the past year, Trent’s shares surged by 192%, and over the span of two years, they witnessed a remarkable increase of 305%. In contrast, the Sensex experienced gains of only 10% and 18% during the corresponding periods.
During these periods, Trent outperformed all other Tata Group stocks, emerging as the top performer.
As the sole retailer adopting an unconventional ‘own brands’ strategy, Trent expedited the expansion of its flagship formats – Westside, Zudio, and Star Bazaar.
Venkatesalu explained, “Westside and Zudio are akin to two siblings engaged in the fashion arena. While they differ in products, designs, fabrics, and more, they remain pertinent across various price ranges. Furthermore, the insights gleaned from Westside have contributed to the robust model of Zudio, and the integrated backend operations of both brands are facilitating synergistic growth for both businesses.”
Trent’s brands are exclusively available on Tata platforms (Tata Neu and TataCliq), with no presence on other e-commerce websites. Presently, the Zudio format accounts for up to 30% of total revenue, a significant increase from its previous share of only 8% a few years ago.
The retailer is implementing a similar strategy within the Star Bazaar business in the food and grocery sector, experiencing robust customer engagement.
Consistently achieving strong financial outcomes, Trent has demonstrated compound annual growth rates (CAGR) of 31% in revenue and 26% in profit over the last five years. Its management views Trent as a platform capable of initiating, nurturing, and expanding a portfolio of growth engines.
Continue Exploring: Tata Group’s Trent continues expansion with multibrand store launch in Hyderabad