The Tata who built Trent into a retail powerhouse 

Mumbai: When Noel Tata joined Trent in 1999, the then 41-year-old had a clear mandate. Originally incorporated as Lakme Limited way back in 1952, Tata Group had decided to divest from its cosmetics business and wanted to focus on apparel retailing, given the absence of established homegrown brands in most categories. It had just acquired the department store Littlewoods International, UK, and changed its name to Westside.

After the first department store in south Mumbai’s Hughes Road precinct, Noel Tata didn’t expand at all during the following six years, trying to perfect the right combination of quality and price through their own private labels unlike other chains such as Shoppers Stop that sold global and local brands.

Since then, he has added nearly 900 stores across formats under Trent, opening about a store every week over the past two decades, and making Trent the fourth most valuable company within the Tata Group. The retailer had a market capitalisation of ₹2.94 lakh crore on Friday compared to ₹3,956 crore in 2014. Sales have risen five-fold to ₹12,375 crore in FY24 from ₹2,459 crore in FY14, while net profit has expanded to ₹1,487 crore, compared to ₹19 crore a decade ago.

Playing a pivotal role in the growth of Trent, as its first managing director and then its chairman, he also led acquisitions and global partnerships. Although under him, Trent has had its fair share of hits and misses.

In 2005, Trent acquired a controlling stake in Landmark Bookstores, a Chennai-based privately owned books and music retailer but repositioned it four years ago as a beauty and accessories store format – Misbu. In 2007, Trent entered a franchisee agreement with Benetton Group to set up Sisley stores in India but terminated it to shelve loss-making ventures five years later.

In 2008, Trent launched value fashion stores called Fashion Yatra but shut the format four years later. In 2009, Trent and Inditex established a 49:51 joint venture to run Zara stores in India and two years later, the two companies entered a similar agreement to open Massimo Dutti stores. In 2014, Tesco acquired a 50% stake in Star Bazaar for £85 million and became a joint venture partner. In 2015, Trent entered into a partnership with Sonae to open and operate Sport Zone outlets in India, but the venture was later dissolved.

However, Trent’s biggest success was in 2016, when it established a private label menswear chain called Zudio in the affordable segment, before expanding its offerings to include womenswear, kids wear and accessories. Zudio, now regarded as a runaway success and among the biggest apparel brands in the country, contributes more than a third to Trent’s total revenue compared to just 8% a few years ago. And it has been the fastest-growing format for Trent, surpassing Westside in terms of store count in FY22 and in terms of revenue in FY24.

A recent Citi Research report said over the last five years between FY19 and FY24, Trent has reported the highest revenue CAGR amongst some of the leading listed consumer discretionary and retail companies in India.

“Trent’s strategy to ‘Build’ rather than ‘Buy’ has been a key driver of creating successful new growth engines. During the initial phase, Trent invested intensively in its supply chain to create a resilient business; revenue growth during FY09-19 was 17% and was predominantly led by Westside from 36 stores in FY09 to 150 stores in FY19 implying 15% store CAGR. However, revenue growth rate during FY19-24 more-than-doubled to 36% CAGR despite Covid-led disruption and a slowdown in discretionary spending led by Trent expanding its brand portfolio through Zudio from 56 stores in FY19 to 545 in FY24 and steady-state growth under Westside 9% store CAGR; 232 stores in FY24,” the report said.

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