Preview: Tata's Trent to outshine Indian peers as low-priced apparel attract young buyers

Shoppers Stop

26/04/2024 09:50

By Rama  Venkat and Praveen Paramasivam
       BENGALURU/CHENNAI, April 26 (Reuters) - Tata's Trent
 TREN.NS  is expected to have outperformed other Indian apparel
chains last quarter, overcoming sluggish demand and restrained
consumer spending by rapidly opening more of its youth-focussed,
low-priced stores.
    Zudio, which sells everything from dresses to perfume at
less than 999 rupees ($12), attracts young consumers looking to
regularly refresh their wardrobes on a tight budget.
    In comparison, peers have been forced to raise prices to
counter higher costs, with shoe chain Metro Brands  METB.NS 
even taking footwear below 1,000 rupees off its shelves. The
price hikes are an even bigger dampener on sales, considering
consumers remain discerning about their expenses due to sticky
inflation.
    
    "For Trent, a good performance makes it a star but at the
same time the kind of companies it competes with directly or
indirectly have been performing poorly," said Arvind Singhal,
chairman at business management consultancy Technopak Advisors.
        Three analysts polled by LSEG expect revenue at Trent,
which also runs Westside department stores, to jump 46.1% to
31.90 billion rupees for the March quarter, marking the 11th
consecutive quarter of outperformance. 
    
    
    "Organic growth in apparel and footwear, excluding Trent,
remains soft," HDFC Securities said in a note earlier this
month.
    Other apparel sellers, including Shoppers Stop  SHOP.NS  and
Tommy Hilfiger-licensee Arvind Fashions  ARVF.NS , have in
recent quarters reported smaller growth compared with Trent,
which launched Zudio in 2016.
    Since then Zudio has opened 460 stores across India, taking
Trent's overall store count to 715, as of Dec. 31.
    In comparison, Shoppers Stop had 105 department stores,
Pantaloons-owner Aditya Birla Fashion and Retail  ADIA.NS  had
4,753 and Unlimited-operator V-Mart Retail  VMAR.NS  had 454
stores.
    Technopak's Singhal said Trent's rivals tried experimenting
with too many formats instead of staying focused on one goal,
while Zudio is taking it "one step at a time" by adding footwear
only after having established in clothing.
    Analysts do not expect the launch of new stores by Reliance
Industries  RELI.NS  and Aditya Birla selling low-priced apparel
to affect Trent's growth trajectory. 
    "Trent would continue to report strong double-digit
(percentage) growth on its expansion plans as newer players
would likely grab market share from independent stores, which
make up most of Indian apparel sales," Axis Securities analyst
Preeyam Tolia said.

($1 = 83.3347 Indian rupees)

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
India's Trent doubles down on Zudio stores    https://reut.rs/3QfT1De
Trent vs Peers    https://tmsnrt.rs/3WdP0mo
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Rama Venkat in Bengaluru and Praveen Paramasivam
in Chennai; Editing by Eileen Soreng)
 ((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))