Trent’s revenue should treble to ₹15,000 crore in 10 years

JAMSHEDPUR:Noel N. Tata, the half-brother of Ratan Tata, is the chairman of Tata group’s retail arm Trent Ltd that operates stores under brands Westside, Zudio, Star Bazaar, Landmark and Zara.

Though known for his reclusive nature, he’s an engaging conversationalist and spoke to Mint just before opening the 131st Westside outlet at Jamshedpur, the site of India’s first steel plant, and a city founded by Jamsetji Tata, the founder of India’s biggest conglomerate Tata group. Tata spoke on Trent’s focus on profitability, debunking the common theory of fast-track expansion in modern retail, and aim of trebling the company’s revenue to ₹15,000 crore in 10 years. Edited excerpts from an interview:

Despite being an early starter, Trent has kept the pace of expansion slow in the last 20 years. In the past few years, especially with ecommerce, India’s modern retail market is fast changing. Do we get to see Trent in a new avatar?

It took us 10 years (since 1998) to open 40 Westside stores. And, this year, we are opening 40 new Westside stores. So, what we did in 10 years, we are doing it in one year now. At present, we have 131 Westside stores. We are opening about one store every week. We are also opening 40 Zudio stores, which is our new brand and new smallformat stores. There will be 40 Star Bazaar outlets this year. Currently, we have 175 stores, and we are adding 120 new outlets this year only. We have substantially increased the pace. We are planning to try and see if we can keep the pace going forward as well, or if we can increase the pace of growth. We are trying to see whether the engine is working well for us. When the engine is working well, it is easy to grow. That’s going to be our strategy going forward.

What propelled the sudden change in strategy?

We realize that the market is there, and 96% is yet to be tapped by modern retail. Look at the total retail marketinIndia.It’sa₹47lakh crore (₹47 trillion) market, and modern retail and e-commerce together is less than ₹2 lakh crore, or just around 4%. The market is growing at 7%, or ₹3.5 lakh crore a year. There’s a lot of time, and lot of space in the market. And there’s space for every body. Realizing this, we have speeded up our expansion. But, yes, we could have grown faster. It is the one thing that we could have done better.

What target have you set for Trent?

Our total revenue, all businesses put together, is close to ₹5,000 crore at present. Over the next 10 years, it should certainly be three times, and we’ll maintain the profitability.

What kind of capex will it require to reach the target?

We are calculating about ₹150 crore of capex a year, between food, apparel and others under Trent.