Tata’s Trent trims stake in Zara, Massimo Dutti JVs with Inditex

New Delhi: Trent Ltd has pared its stakes in its joint ventures with Spanish fashion giant Inditex Group to operate the Zara and Massimo Dutti brands in India, even as Tata Group’s retail arm aggressively expands its own business.

Trent has two JVs with Inditex: Inditex Trent Retail India Pvt. Ltd (ITRIPL) to run Zara stores; and Massimo Dutti India Pvt. Ltd (MDIPL) for the eponymous brand.

Trent reduced its holding in ITRIPL from 49% to 34.94% by selling 1,40,000 equity shares through a buyback offer made by ITRIPL effective 30 August 2024, the Tata Group company said in its annual report for FY25 released on Thursday. Similarly, it cut its stake in MDIPL from 49% to 20% by selling 1,75,450 equity shares to Grupo Massimo Dutti, Spain, effective 25 March 2025.

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Zara currently operates 22 stores in 13 cities across India, while Massimo Dutti has just three.

In FY25, Zara reported total income of ₹2,839.5 crore, up 2.26% over the previous year. Massimo Dutti reported ₹101.23 crore in revenue, marginally down from ₹101.79 crore in FY24

Financial, not strategic

Trent has consistently maintained that its Inditex partnerships are financial in nature and not long-term strategic bets.

“Including in the context of brand ownership and the arrangements for merchandise supply (with the majority partner entirely controlling these core customer propositions and the terms thereto), the company views its related commitments as a financial investment,” the annual report said.

These ventures are limited to product distribution in India, which affects the economic value attributable to them, it said.

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The joint venture with Inditex was inked in 2009 to launch Zara in India. The original terms gave Inditex a 51% stake and Trent the remaining 49%.

Notably, Inditex recently launched its third brand, Bershka, in India through a wholly owned entity—Bershka Retail India Pvt. Ltd—without any local partner. It has also set up Zara Home Retail India Pvt. Ltd as a 100% subsidiary.

Inditex’s 2024 annual report stated that it holds call options on Trent’s remaining shareholding—35% in ITRIPL and 49% in MDIPL. Trent, in turn, holds put options to sell its stake to Industria de Diseño Textil S.A., with the strike price based on pre-defined terms.

Focus shifts to Zudio and Westside

While scaling down its Inditex JVs, Trent continues to aggressively expand its own brands, especially Westside and value-fashion chain Zudio. 

Trent chair Noel Tata said the country's second-largest retailer by market capitalisation remains on track to grow 10 times, citing the company’s differentiated model of selling own-branded products through exclusive stores.

Tata, who in October last year took over as the chair of Tata Trusts, the philanthropic entities that control the Tata conglomerate, reaffirmed Trent's focus on the home market even as the retailer expanded overseas.

"Two years ago, I had envisioned that Trent would one day be ten times bigger. Since then, the revenue run rate has doubled. The headroom for growth remains enormous, and I am confident that we will reach this milestone in the not-too-distant future," Tata said in the company’s FY25 annual report.

The company is recovering after a year of slow growth, returning to its pre-pandemic expansion and proving to be one of the few profitable retailers in India. 

In FY24, Trent's revenue growth slowed to 24% over the previous fiscal. However, in FY25, revenue surged 40% to ₹17,135 crore. The company opened 295 stores during the year, exceeding the total number of outlets opened in the previous two fiscal years combined. Net profit rose 54% to ₹1,585 crore during FY25.

Zudio, Trent’s fast-growing value fashion chain, led the expansion during the fiscal with 244 new outlets, increasing its presence to 765 stores across 235 cities, including its first two overseas stores.

The Tata Group company also surpassed 100 million customers and expanded its retail space by over 3 million sq. ft, beefing up its presence in tier-2 and 3 cities.

Westside, the company’s flagship lifestyle and apparel brand, ended the year with 248 stores. Digital sales for the retail format grew 41% and now account for 6% of the brand's revenue.

The company’s food and grocery format, Star, a joint venture with Tesco, posted a 25% growth in revenue to ₹2,699 crore. While it remained unprofitable, Star narrowed its net loss to ₹92.3 crore from ₹97.3 crore in FY24. More than 70% of Star's revenue now comes from private labels.

Trent is “still in the early rounds of our growth” and will continue to invest in design, digital systems, and supply chain to support long-term brand development, managing director P. Venkatesalu said in the annual report. 

Since Noel Tata took over as chairman in 2014, Trent has transformed from a single-format lifestyle chain into a diverse retail platform that now includes various sectors such as value fashion, lifestyle products, grocery, beauty, and ethnic wear.

The company's revenue rose from ₹3,431 crore in FY21 to ₹17,135 crore in FY25, and its net profit grew sixfold during this period.

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