Two brands under the umbrella of Trent Limited (banner of Tata Group) are hitting the headlines in the booming fashion retail market in India: Zudio and Westside. Even though Westside is older and serves the premium/mid-premium segment, Zudio has quickly expanded in the value fashion/affordable fashion market niche. This paper discusses their growth strategy, current developments and a step-by-step tutorial on how you can join either of the brands as a franchisee (or partner).

Brand Overview: Zudio

Zudio is a value-fashion retailer that belongs to Trent Limited. It is aimed at young and cost-effective consumers and has been growing very fast within India. One of the reports indicated that the brand possessed approximately 545 stores across 164 cities.

Key points:

• Located in the low-cost fashion category (trends + low cost).

• Employs a retail model that is susceptible to high turnover.

• Covering not only metros but also targeting tier-2 and tier-3 cities.

Westside

Westside is a stronger brand of Trent, with a wide lifestyle/product base of fashion apparel, accessories, home decor, etc. It serves a slightly higher price range than that which Zudio serves.

Growth Plan, and the latest developments

Zudio’s Expansion

• FranchiseAVS has Zudio planning to open another 250 outlets in 2023-24, or almost twice the number of stores.

• According to Reuters, the Q4 profit of Trent increased by five times, and this growth was mainly due to the increased number of Zuloide stores (86 new stores in a quarter) and the value fashion demand.

• Analysts believe Trent (through Zudio) will outshine the competitors, especially since Zudio would concentrate on the young price sensitive consumers and low-cost clothing (less than 0.999).

Westside’s Position

• Westside is still vital because of the premium/mid-segment format; e.g., in the case of the Q4 report, both Zudio and Westside store numbers were mentioned.

• The brand growth is not rapid (considering increased investment and expanded store format) yet remains included in the expansion strategy of Trent.

Why Expansion Makes Sense

• The retail market in India is still increasing at a high rate with the increase in disposable incomes of the people in the lower cities and the requirement of low-cost fashion products as well as lifestyle products.

• The rapid growth of Zudio demonstrates that a high-volume format with lower prices can thrive even during times when consumers are optimistic about their expenditures.

• Having the Tata/Trent brand as a support (credibility) is beneficial in terms of scale.

How to take a franchise/become a partner

The following is a practical guideline (with approximate figures) for an individual who wishes to partner with Zudio or Westside. Spelling out present terms and figures should always be confirmed with the company.

Steps to apply (for Zudio)

1. Research & location evaluation– Find high foot traffic, ideally in an urban region where the brand is to spread (tier-2 and tier-3 can provide potential opportunity).

2. Financial preparedness- Be ready to show financial strength and investment preparedness. In the case of Zudio, the investment is high.

3. Space requirement- Generally, a store size of 3,000-8,000 sq. ft. (or as designated in that market) is required.

4. Send an application to the brand/present a business profile, call the franchise department, fill out forms, and submit your profile, the proposed site of the store, and the investment plan.

5. Store establishment and training– Once approved, the store is fitted out, inventory is stocked and staff is trained according to brand specifications.

6. Launch & operation Brand can be used to fund continuing operations, marketing, supply chains, etc.

Investment & Cost Estimates of Zudio

• Total investment: ₹50 to 1 crore (or even 2 crore in case of size and location) for Zudio.

• Franchise Fee: ₹10.15 lakh (estimate) only to use the brand (differing).

• Interior, inventory, working capital: Extra tens of lakhs based on the store size.

• ROI: There is an indication on some sites that it will take a good location 3-5 years to break even.

Investment Costs and Cost Estimates of Westside.

• Increased investment needed: According to some sources, a Westside franchise would need 1-2 crore or above.

• Considering the premium format, bigger store size, cost of inventory, etc.

Model Note – FOCO / COCO

• Zudio employs a FOCO (Franchise Owned, Company Operated) model in most instances: the franchisee makes the investment, and the brand/company manages operations, the supply chain, et cetera.

• This implies that you will be having a reduced operational burden as well as control.

Critical Due Diligence/Considerations.

• Place is important – high pedestrian, visibility, accessibility. Many guides emphasize this.

• Standards: You have to abide by brand layout, design standards, and product/service standards.

• Learn about the royalty, revenue sharing, and the terms of the contract.

• Risk factors: Rent increase, competition, fashion, efficiency in operations.

• Set achievable goals- although certain sources have high margins, numerous factors do influence success.

Zudio vs. Westside Franchise Comparative Snapshot

Why Now a Good Time to Think About

• The Indian fashion market is expanding, and value fashion is gaining more ground, particularly in smaller cities.

• The growth of Zudio is characterized by a high demand and brand movement.

• Westside is a reliable brand that has loyal customers and an increased product line.

• Retail franchise is associated with physical property and brand equity, which is not to be found in many newer projects.

Recent News Highlights

• Trent, Zethod, and Westside auto-news in recent times.

• Trent India records a 5-fold increase in Q4 profit on additional Zudio apparel stores.

• Indian retailer Trent records doubling of its profits, with stocks at a record high.

• Tata Trent hopes to shine with its cheap apparel compared to other Indian rivals as a trendy item appealing to the young generation.

Young-focused burger chain is opened by Westside owner Trent

• According to Trent, the Q4 profit leaped fivefold, owing to the growth of Zudio stores.

• The Q1 performance by Trent also indicated a doubling of profit with a good demand at the affordable outlets of Zudio.

Reuters

• Analysts are of the opinion that Trent will be a star compared to his peers since Zudio concentrates on the value segment.

Reuters

• Trent has also introduced a new youth-based brand, which is named Burnt Toast and has spread its retailing base even more.

The Economic Times

• Lessons to Learn as a Future Franchisee.

• Select the brand depending upon your budget, riskiness and market within your city/town (value vs. lifestyle).

• In Zudio, the entry cost is low, and the growth potential is high, but it has to achieve traffic and efficiency.

• In the case of Westside, more investment and diversification of products may be better with more established investors.

• Placement and performance are as important as brand. Good brand/bad location = risk.

• Familiarize yourself with contract terms, the operational model (FOCO/COCO), and brand support.

• Be realistic when coming to financial expectations; the brand is solid, but there is competition in retail.

• Keep abreast: the retail environment, consumer behaviour and supply chain (particularly after the pandemic) are dynamic.

Conclusion

In case you want to venture into the Indian retail fashion industry through a franchise, both Zudio and Westside have strong cases to offer, supported by the Tata/Trent brand. Zudio and Westside are polar opposites in high-velocity value fashion and lifestyle-oriented store format with higher investment, respectively. The trick lies in having your budget, market and business objectives matched with the appropriate brand and doing due diligence. With proper location, planning and implementation, such a franchise can prove to be an effective business asset.