One of the country’s best-known retailers, Trent, which runs chains such as Westside and Zudio, has faced consistent investor pressure in recent quarters, as topline growth rates slow amid a competitive landscape. Speaking at the sidelines of the Retail Leadership Summit in Mumbai on Monday, Trent’s managing director P. Venkatesalu responds to questions from Viveat Susan Pinto on demand trends and growth prospects. Excerpts:
1)Are you seeing tailwinds from the GST cuts flowing into fashion and lifestyle products?
We haven’t seen it yet. But we hope to see it happen in the future as consumers turn their attention to small discretionary items. Why I am saying this is that because sectors that immediately saw a bump-up in sales were big-ticket discretionary items such as electronics and auto. This took away the focus from small-ticket discretionary items. To your question, small-ticket discretionary items will benefit in the medium term from GST cuts. The direction of GST is completely in the interest of consumers in terms of the changes that have happened. I do see that helping consumption gradually in the months and quarters ahead.
2) What next after youth-focused retail brand Burnt Toast that was launched last year?
We will continue to plant seeds in terms of brands in the marketplace. We remain committed to that. Besides Burnt Toast, we already have formats such as Samoh and Utsa (both ethnic wear brands) that are keeping us busy for now. We remain committed to having a diverse portfolio of brands that tap different consumer needs, but we want to do so organically. We are not interested in mergers and acquisitions. I don’t think we are culturally set up to make that work well for us.
3) What is your quick commerce strategy given that brands such as Westside are big online?
We are not directly interested in quick commerce. Having said that, with Westside, we now have about 6% of revenues coming from online channels. It has been growing at a healthy clip. The question is can we give more convenience which is synced up with our type of customers and the expectations that we are seeking to satisfy. The answer is yes.
4) What are you plans to go international?
We already have a few stores of Zudio in the United Arab Emirates (UAE). We do think there is much more that can be done in select markets outside India. For instance, UAE or the Middle East in general is a case in point. Westside gets a lot of love from the Indian diaspora in international markets. We will look at this closely as part of our international expansion. We will also take the brands in our portfolio that have scale in India. As of today, it is Westside and Zudio.
5) Will you tap free trade agreements (FTAs) when going abroad? And does the influx of global brands through the FTA route concern you?
There are very few global brands which are not present here. Most brands are already here. And because of online, international fashion and lifestyle labels have already marked their presence in the country. So, I don’t see it as a concern factor at all. As far as tapping FTAs are concerned, it makes sense if you are looking at exports at scale. We are not looking at that opportunity at the moment. Our attention is focused on addressing consumer need sets in international markets. We are not giving exports that much of a thought at the moment. Once we solve the core issues around consumer needs, we will look at other opportunities to serve international markets better.