Trent bets on Westside brand to drive growth

Trent, the Tata Group entity which operates stores such as Westside, Landmark, Zudio, Star Market and Zara, expects its flagship brand Westside and hypermarkets to drive growth.

The retail major, which reported a robust set of numbers in FY18, is planning an aggressive expansion of the Westside brand. At least 30-odd stores are likely to be added every year over the next three-five years.

With operations of Trent’s ‘Star’ format (food and grocery business, which it operates through a JV with Tesco) stabilising, the company will look at having smaller ‘Star’ stores in “the right catchment areas” rather than hyperstores. Besides being margin-accretive in the long run, this could help Trent pare losses in the hypermarket format. According to Philip Auld, Managing Director, Trent Ltd, at least 30 Westside stores will be added over the next 12 months, making it the biggest ever rollout in the recent past.

Sources say that in earlier years, store roll-outs varied between 15 and 20 a year. In FY18, for instance, Trent added 18 stores, taking its total count to 125 (Westside) stores.

“We will be adding 30-odd stores every year in the medium term. The additions will be through a mix of company-owned and franchise models. The focus will also be on expanding our presence in the East,” Auld told BusinessLine on the sidelines of the inauguration of the company’s new flagship store here. He, however, did not reveal the investments that would go towards setting up the company-owned stores.

Revenues up

According to him, an uptick in the economy, higher disposable income and a young population have been drivers for the expansion of the brand. Westside competes with the likes of H&M and Forever 21 in the apparels, clothing and accessories space.

Westside’s revenues grew 20 per cent year-on-year (YoY) in FY18 on the back of accelerated network augmentation, whereas like-to-like growth was 9 per cent. With no deep discounting and a focus on private labels, Trent intends to leverage its tight control over the supply chain to benefit Westside in the long run.

The standalone revenues, the majority of which is contributed by Westside, saw a 19 per cent year-on-year jump to ₹2,109 for FY18, while net profit saw a 9 per cent Y-o-Y growth to ₹117 crore.

On a consolidated basis (whilch include all the JVs that Trent has with the likes of Tesco, Zara, among others), Trent saw its total revenue increase by 18 per cent to ₹2,202 crore in FY18 against ₹1,873 crore in FY17. Net profit stood at ₹87 crore.

Landmark, which sells toys, stationery, books, technology and sport goods, has been doing well and is breaking even at a store-level. However, there are no immediate plans to expand the format. Zudio, the value format fashion brand that is into apparel, footwear and home accessories, will also be expanded.

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