Trent Ltd., a subsidiary of the Tata Group, intends to significantly accelerate the development of its premium clothing brand Westside, planning to open up to one hundred new stores per year. This is double the current growth rate, which the company deems necessary to revitalize business activity.
Expansion Strategy and Ambitions
Sheilani Partee, CEO, noted that the transition from opening 10–15 stores annually to one hundred is a very ambitious step, but the team is ready for such changes. Westside, which sells clothing, beauty products, home furnishings, footwear, and other accessories, including lab-grown diamonds, had 300 retail outlets at the end of the last fiscal year.
The company plans to expand its presence in the country's northeastern states, as well as strengthen its existing network in major cities such as Delhi, Bangalore, and Hyderabad.
Competitive Landscape and Market Challenges
According to Partee, the overall strategy of the brand is to give everything a 'fashion touch' and trigger impulse purchases. Now that this foundation is laid, the company is ready to act much faster.
Trent is under pressure to have Westside compensate for the slowdown in revenue growth observed by Zudio—a larger fashion chain focused on more affordable trendy offerings. Furthermore, Zudio faces stiff competition from conglomerates such as Reliance Industries Ltd. and Aditya Birla Group.
Overall consumer demand remains volatile due to rising inflation and restrictions on available retail space. Concerns over Zudio's slowing growth have negatively impacted Trent's shares, which remain flat this year and are down 48 percent compared to the peak two years ago.
In April, the company told investors that consumers are being cautious with spending, leading to moderation in discretionary spending amid ongoing macroeconomic uncertainty and potential increases in the cost of living.
Analyst View and Investments
Nevertheless, some analysts view Westside as a potential powerful growth driver for the retail giant. They point to the impressive modernization of the brand's store design and product assortment. Analysts at Bernstein, Jignanshu Gor, and Parth Shah, in a July report, questioned whether Westside would become the next Zudio, adding that Trent's confidence in Westside is firmly based, and competitors' financial difficulties give the brand an opportunity to become the 'benchmark format department store in India.'
Trent's board previously approved an increase of 25 billion rupees ($260 million), most of which will be directed towards accelerating the retail network expansion. Partee stated that part of these funds will be allocated to Westside's online business, including international operations. The CEO aims to increase the share of e-commerce in Westside's total revenue to 10 percent, up from approximately 6 percent in the quarter ending March 31.
Innovations in Design and Manufacturing
The Trent division is actively implementing technology and artificial intelligence to improve the supply chain, warehouse organization, and product development. A new AI-based software package has increased the productivity of about 50 in-house designers, allowing them to generate 400 to 500 designs weekly, compared to an average of 50 previously.
Partee also mentioned that Westside is working to reduce the production cycle time for trendy items to just 30 days. She emphasized that the company has become much faster than before, but there is still much to do to achieve the set goals.
