Trent Ltd's value fashion brand Zudio had a record year in fiscal 2024, opening 203 new stores and entering 46 new cities. With a store footprint of 10,000 sq ft, Zudio is well positioned for expansion. In FY2024, Zudio entered 46 new cities and strengthened its presence in 48 existing cities. For the full year, Trent Ltd reported consolidated revenues of INR 12,375 crore and net profit of INR 1,477 crore across its retail formats. The success of Zudio has attracted other national retailers like Yousta (Reliance Retail), Style-Up (ABFRL), and InTune (Shoppers Stop) to enter the value retail space. With India's value retail market projected to surge to USD 170 billion by 2026, Trent Ltd is well positioned to capitalize on opportunities through these brands in the high growth segment.
Trent Ltd's value apparel format Zudio opened a record 203 new stores during fiscal 2024, while entering 46 new cities during the year taking the total number of stores to 545, according to the recently published data by the company. With a store footprint of 10,000 sq ft, the concept affords expansion across numerous micro-markets.
In fiscal 2024 alone, Zudio entered 46 new cities and strengthened its presence in 48 existing cities. The estimated capital required for a new Zudio store is INR 3-4 crore, covering capital expenditures, deposits, and initial inventory.
For the full year, Trent Ltd. that operates a portfolio of retail formats in India such as Westside, Zara and Star supermarket in India reported consolidated revenues of INR 12,375.11 crore. It recorded a profit of INR 1,477.46 crore for the 12 months ended 31 March 2024. The company operates 811 stores across 178 cities.
Zudio operates in the value segment and focusses on younger shoppers. The emphasis is on minimizing lead times and landing fresh collections in stores as quickly as possible. It operates on a franchise-owned, company-operated model, appealing to franchisees with its capital expenditure approach, while Trent manages inventory costs. As per Trent, merchandise at Zudio is almost entirely sourced from within India as a matter of choice, affording access, speed & flexibility.
As of March 2024, Zudio had 545 stores across 164 cities, including stores co-located with Star supermarket.
The success of Zudio has attracted other national retailers like Yousta (Reliance Retail), Style-Up (ABFRL), and InTune (Shoppers Stop) to enter the value retail space, according to analysts at Motilal Oswal Financial Services. Zudio is expected to compete intensely with regional players like V-Mart, Style Bazaar, City Kart and V2 Retail.
Historically, India's value-fashion segment has been ruled by unorganized retailers and represents over half (57%) of the overall apparel market, primarily serving the middle- and lower-income brackets in tier 2 and beyond markets. Only a handful of regional retailers have managed to carve out a presence in this cost-conscious segment, which has proven challenging for larger retail entities to penetrate.
India's value retail market, excluding food and grocery, is likely to surge to USD 170 billion by 2026 from USD 111 billion in FY23, as per a report by Wazir Advisors. This segment is set to grow at a compound annual growth rate (CAGR) of 15% between 2023 and 2026, surpassing the overall retail sector's expected 10% CAGR, which is projected to reach USD 1,219 billion by FY26.
This growth has been attributed to rising disposable incomes, demographic trends favouring a youthful consumer base, and ongoing urbanization. Apparel leads the value retail category, followed by furniture, beauty and personal care, and footwear.
Meanwhile, Trent's Westside brand spanned 232 stores across 91 cities as of March 2024. Both Westside and Zudio target the value segment but at different price points. They share backend integration but maintain front-end differentiation, with Westside focusing more on online. Zudio's format has evolved rapidly over three years and is expected to keep changing. While Zudio added many stores this year, Trent executives are also excited about Westside's prospects, according to Jefferies analysts.
Overall, Trent Ltd saw strong growth across its value retail brands in FY2024. Zudio in particular aggressively expanded its footprint while targeting younger customers. Going forward, both Zudio and Westside are expected to see continued evolution in their formats. With India's value retail market projected to surge to USD 170 billion by 2026, Trent Ltd is well positioned to capitalize on opportunities through these brands in the high growth segment.
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