Trent Main­tains its Growth Path De­spite Head­winds

Apparel - - Market Watch -

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.

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