Mumbai: Noel Tata-led chain Trent, which owns Westside, Zudio and Star Bazaar, has built a business model around selling private labels (owned brands), and its chief executive believes there is no reason just yet to deviate from this pronouncedly singular script for the Tata Group retailing business.
“We have growing conviction in our model. The Trent playbook works. Many of these choices and disciplines are culturally anchored and that makes a difference,” Trent CEO P Venkatesalu told ET.
The company’s revenues climbed substantially over the past five years, to ₹8,242 crore in FY23 from ₹2,157 crore in FY18. Concurrently, the net profit surged nearly five-fold to ₹394 crore. The stock has sparkled, too. Last year, Trent more than doubled in value, outpacing the 20% returns for the Nifty50. Over a two-year span, the stock nearly tripled, while the Nifty climbed 27% in the period.
Trent achieved another milestone in December by becoming the fifth listed Tata Group company to surpass a market capitalisation of Rs 1 lakh crore.
P Venkatesalu, 46, took charge as CEO in 2021 and has worked closely with Noel Tata over the years. He was earlier CFO of the company.
Exclusively Tata
Trent is probably the only retailer in the country to compete with a completely private label portfolio. Trent’s brands are not sold on any other ecommerce sites, except Tata platforms (Tata Neu/TataCliq).
“In the fashion space, we will only sell our own brands. This has allowed us to experiment, learn and get to what resonates with consumers. Whether it is Westside, Zudio or Star, there are common threads to what we do. It is a curated offering. We want to be direct to consumers and have complete ownership of our brand relationship with our consumers.” said Venkatesalu.
The Zudio format has become a hit with value seeking consumers, prompting clones by other retailing chains. It contributes as much as 30% to total revenues, from 8% a few years ago. The total number of Westside and Zudio stores is estimated to be 800 this year, from 261 in 2020.
Noel Tata has recently stated that the retailer is applying the Trent playbook to the Star business and that it is witnessing strong customer traction, instilling a growing conviction to build out this growth engine in the food and grocery space.
“We are confident that this business is well poised to shift gears and deliver substantial value to customers and shareholders going forward,” Venkatesalu said.
Star has adopted a calibrated approach to expansion, with stores in Maharashtra, Karnataka, Telangana and Gujarat. It has a network of more than 800 farmers and sources more than 80% of its vegetables and 60% of fruits directly from farmers.
Traditionally, Trent had been slower to expand unlike other retail firms as it focused on a profitable model. The company has consistently delivered robust financial results, boasting a 31% and 26% compound annual growth rate in revenues and profits, respectively, over the past five years.
