For Zudio, fast fashion doesn’t just mean low-cost retail. It also means that you, the shopper, have to be fast enough to grab what you want because even a five-second hesitation is enough for you to be left clutching at thin air. The outlet I visited in Chennai a couple of weeks ago had racks and racks of empty shelves and was so crowded that there was barely any elbow room, let alone space to browse in peace. All the stuff it retails is under Rs 1,000 ($12.5) - a bargain that India’s price-conscious shoppers don’t seem to be able to resist. No wonder then that Trent, the Tata Group company that owns Zudio, has been expanding the chain rapidly. In just six years, Zudio has zoomed to 250 stores across the country. It’s also quite uncharacteristic of Trent’s usually conservative, profitability-first approach—Trent needed two-and-a-half decades to get to over 200 outlets of its flagship retail store, Westside, because it didn’t want to compromise on the bottomline. As a result, Trent’s centre of gravity is shifting. Westside was responsible for over 60% of Trent’s revenue in the year ended March 2022. But Zudio’s sales jumped more than 5X to over $125 million, accounting for over a quarter of Trent’s consolidated topline of $564 million that same year. Zudio may soon become Trent’s most visible retail brand in the coming years and maybe Tata Group’s as well. That, however, may put some serious holes in Trent’s bottomline. Westside’s average selling price is just under 3X of Zudio’s and that has let the brand make up for its measured expansion with industry-leading gross margins of 60%. Zudio will have to sell a lot more T-Shirts than it currently does to keep investors happy...
