‘Are you going to sell fabric cut-pieces?’ How Noel Tata defied doubters to build a retail powerhouse

That was the incredulous query from an investor when the Tata Group went into apparel retail 27 years ago, in a country where modern retail was not a concept yet.

On Saturday, Noel Tata, who built and scaled Westside, Zudio and Star Bazaar under the Trent umbrella, recalled the scepticism of the time, when India's consumption engine was yet to turn on, and private labels were unheard of. In the decades that followed, Trent went on to beat at all expectations, the Tata Trusts chairman said at the Hindustan Times Leadership Summit in New Delhi.

“When we first started our first shop, there were only two other shops of significance in India. It was a concept; modern retail was not understood," said Noel, who led Trent as managing director since 1999 and as chairman since 2014. He stepped down last month when he turned 70, in compliance with the Tata Group's retirement policy for non-executive directors.

From betting on private labels at the dawn of modern retail to building Zudio into a 1,000-store chain, Noel Tata’s retail strategy centred on product ownership, affordable fashion and India’s expanding consumption market.

The retail business has become one of the biggest consumer-facing ventures of Tata Group, with Trent Ltd operating more than 320 Westside stores and over 1,000 Zudio outlets. Zudio alone is on track to generate around ₹15,000 crore in sales this year, selling nearly 400 million units, Tata said at the Summit.

Noel recalling the journey of building Trent comes at a time when the Tata Trusts he leads have questioned mounting losses at some of Tata Sons' newer businesses such as aviation and e-commerce.

Lakme to Trent

In June 1999, the company formerly known as Lakmé Ltd changed its name to Trent and appointed 42-year-old Noel N. Tata to its helm, with a monthly salary that topped out at ₹1 lakh. At that time, its retail business included four Westside stores in Bengaluru, Chennai, Hyderabad, and Mumbai, covering about 80,000 sq ft of shop space.

Twenty-seven years later, Trent’s FY2025-26 annual report tells a very different story. Total revenue from operations rose 17.2% to ₹20,074 crore, and net profit for shareholders rose 11.2% to ₹1,719.65 crore.

Trent now runs 1,286 stores across 321 cities, with more than 17.7 million sq ft of retail space. That is over 200 times its 1999 footprint. It added 289 stores in the year alone.

The change started with a sale. Lakmé’s brand names were sold to Hindustan Lever for ₹110.03 crore, and the company took over its retail subsidiary, Trent (formerly Littlewoods International India), which Noel had managed.

In his latest letter to shareholders, Noel wrote that he remembers opening the first Westside on Bengaluru’s Commercial Street in 1998, when modern fashion retail in India was “almost non-existent.”

Trent’s market cap totalled ₹1,68,501 crore at the end of Friday, making it the fourth most valuable Tata Group company, behind Tata Consultancy Services Ltd, Tata Steel and Titan Co. Ltd.

Growth engine

The real growth came later. Zudio, the budget brand launched in 2016, had failed as a large store by 2020, before Trent redesigned it. In the next decade, it expanded to 963 stores in 313 cities, including six in the UAE. Westside has 300 stores. Revenue has grown by about 50% a year since FY22, when it was ₹3,881 crore.

The journey, Tata said, was built on a decision that went against the conventional retail playbook: developing and selling the company’s own brands instead of stocking established labels.

“One of the most significant decisions that we took when we first started, which was with Westside, was whether we became a branded retailer or whether we did our own private label brands. And we took the more difficult decision. We said we will do private label,” he said.

The choice meant Trent had to take responsibility for designing products, sourcing fabric and managing the entire chain until the merchandise reached customers. Tata described the model as an early direct-to-consumer business in India, giving the retailer control over the product rather than simply acting as a distribution platform for other brands.

The business took time to find its footing. In its initial years, the team believed the Westside format could support about 10 stores across the country. A decade later, expectations had expanded to 50-60 stores, largely across metropolitan markets.

Slog years

“They worked hard at it for 10 years, with lots of trial and error and patience, and finally, they hit the right note,” Saurabh Mukherjea of Marcellus Investment Managers, whose funds own Trent shares, told Mint earlier.

Noel has avoided the acquisition track taken by rivals like Reliance Retail and Aditya Birla Fashion, focusing instead on Trent’s own brands. Star, the grocery division, now makes 73% of its revenue from its own labels and runs 84 stores in 12 cities.

How big can Trent get? “Trent has the opportunity to be 10X its size, but don’t ask me by when,” Noel told Mint in 2024.

Trent’s format was designed to offer aspirational products at affordable prices, with stores starting at around 6,000 sq ft and prices ranging from ₹199 to ₹999. A decade later, those price points remain unchanged, Tata said.

Zudio also broke away from conventional retail marketing. The chain has neither an e-commerce platform nor a website and has largely stayed away from advertising, relying instead on its physical store network and product quality.

“We’ve never been on e-commerce and, you know, never done any e-commerce at all,” Tata said, adding that the company had not undertaken any advertising apart from a campaign marking the opening of its 1,000th store.

Tata attributed the expansion partly to the growing reach of consumption in India, particularly in smaller cities. Demand for better products was no longer restricted to metros, with tier-II and tier-III towns increasingly contributing to the consumption story. He also credited the broader expansion of India’s economy for the opportunity, saying the growth in consumption was visible across socio-economic categories and geographies.