Trent Maintains its Growth Path Despite Headwinds
Trent, a Tata Group entity, is one of India’s leading multi-category retailers. The company is witnessing stable business and is steering towards growth, as stores have registered a healthy growth and are forging ahead with robust growth plans.
Westside, which is registering healthy samestore sales growth consistently and constituting a significant chunk of Trent’s annual top-line, plans to add around 30 stores every year. To boost margins, it will emphasise on deriving a higher share of sales from exclusive brands. After achieving break-even in FY18, Landmark, Trent’s other retail format, will now focus on keeping stabilising overheads and plans to roll out more outlets from next year on completion of feasibility studies. For Zudio, Trent will undertake accelerated network expansion to tap the value fashion segment, which caters primarily to price-sensitive and aspirational buyers.
Trent also retails fast fashion brand Zara in India. In the next three to four years, the number of Zara stores is expected to go up steadily. Most of these new outlets will be opened in metros/tier I cities. Trent’s online retail format Tata Cliq is widening its consumer base. Trent will continue to invest in this digital arm and the target is to generate R100 crore in sales by FY19-end through this platform.
However, there are several growth impediments as the gross margin of Westside is not expected to increase profusely as the contribution of in-house brands is over 90 per cent.
To capture a bigger pie of the fast-growing retail landscape, Trent has chalked out an aggressive growth strategy. About 25-30 stores will be added in each of the three formats (Westside, Star and Zudio) in the next two years, thus ensuring store clusters (i.e. new stores will be located in a radius of 100-200 km of the existing ones) to save distribution expenses.