Investment in Zara JV not long-term, say Trent in its annual report

Tata group firm Trent has announced its joint venture with Spain's Inditex for Zara is only a financial investment and not a long term strategic investment essential to its other retail operations. Inditex Trent Retail India is a 51:49 per cent joint venture (JV) between Inditex group and Trent with 51 per cent held by the Spanish partner and the Tata group company holding the rest the company views its commitment to this JV primarily as a financial investment and consequently, it may be appropriate not to consider this as a long term strategic investment integral to other retail operations, Trent said in its annual report for 2017-18.

As per the company the reason is due to the nature of brand ownership, which is with Inditex, and the arrangements are for merchandise supply. It further added that the primary challenge to faster expansion is the availability of high quality retail spaces which can be expected to generate reasonable sales. The majority partner entirely controls the core customer proposition with respect to the fashion offer.

Trent's revenue from operations in 2017-18 stood at Rs 2,066.29 crore. Inditex Trent Retail recorded 19.40 per cent increase in revenues at Rs 1,221.67 crore 2017-18. Trent whose flagship brand is Westside, however, said plans are to steadily expand the presence of Zara stores in India over the next three to four years in major cities. At present there are 20 Zara stores located in Indian cities such as Delhi, Mumbai, Bangalore, Pune, Surat, Jaipur, Chandigarh, Chennai, Mohali, Hyderabad and Gurgaon.