Trent stock price has trebled over the past one year, currently, at Rs 4,500 levels. The company operates through a portfolio of retail concepts, Westside, Zudio and Trent Hypermarket (Star grocery stores). Westside, Trent’s flagship format offers apparel, footwear and accessories for men, women and children, along with furnishings, decor and a range of home accessories. Westside was conceptualized and established in 1998. And 18 years later, came Zudio. After the roaring success of Westside, Zudio was established to penetrate in the value retail format. Westside offers a differentiated portfolio of exclusively owned brands in sync with latest fashion trends, appealing to a wide spectrum of style conscious consumers. Zudio, on the other hand has made fashion accessible by offering merchandise below Rs 1,000, catering to both value and fashion-conscious customers and also providing the same high Westside quality. Zudio is mainly pitched at a younger audience, closely synchronized with evolving trends laying emphasis on minimizing lead times and landing fresh collections in stores as quickly as possible. Zudio sources its merchandise (own brands) completely from within India which has led to higher affordability, speed & flexibility.
In addition to product affordability, Trent has also made Zudio value format highly accessible to value conscious customers, opening stores at a rampant rate. In FY24, Zudio entered 46 cities and opened more than 200 stores.
Robust growth in the number of Zudio stores is also because of lower capex of Rs 3-4 crore compared to a Westside store with a capex requirement of Rs 8-9 crore.
Zudio stores are located in metros and tier 1-2-3-4 cities touching the entire length and breadth of India. Zudio has 19 stores in Mumbai, a single store in tier-3 city of Khandwa (Madhya Pradesh) and also in Nagaland, Sikkim and Meghalaya. There are 545 Zudio stores in India as on March 2024.
Trent FY24 annual report discloses that Zudio sold 90 T-shirts, 20 denims, 19 fragrances and 17 lip-sticks every minute in FY24. No doubt, Trent revenue growth was 51% in FY24 and three-year revenue CAGR stands at 80%. In Q4FY24, revenues at Rs 3,187 crore rose 53.4% YoY.
Zudio financials are not disclosed separately by Trent. Zudio is operated by Trent’s step-down subsidiary, Fiora Hypermarket Ltd which is engaged in the retail business of both Zudio stores and a few of Star stores. The roaring success of Zudio has pushed premium retailers such as Shoppers Stop, Aditya Birla Fashion and Reliance Retail to enter value retail format. While these close peers are mainly dependent on private label business, Zudio and Westside offer merchandise under their own brands, unavailable on any other platform, which is a major differentiating growth factor. And competitors have miles and miles to go before they move into Zudio’s coveted space of 545 stores with a retail area of five million square feet and presence in 163 cities. Shoppers Stop’s Intune, ABFRL’s Style Up and Reliance Yousta store strength is in double-digits.
Zudio completely relies on word of mouth with nil advertisement & promotion budget. This will be hard to beat, a long journey before anybody can catch up with Zudio in India and now that it plans to expand abroad.
