Trent’s sales in the June 2009 quarter fell by 8% over the previous corresponding period to Rs 119 crore (standalone results). The apparel retailer, promoted by the Tata group, had hived off its hypermarket business to a subsidiary effective August 1, 2008. The loss of revenue in its standalone results hit overall growth. The company runs stores under the Westside, Sisley and Fashion Yatra and also owns the Star India Bazaar stores, which are now run by a subsidiary.
- Its consolidated sales during 2008-09 were Rs 850 crore. The company said that the two quarters are not strictly comparable, because it hived off its hypermarket business to a separate subsidiary, effective July 1, 2009. However, it did not provide a like-by-like comparison either.
- The company did open six new Westside stores, two Sisley stories and one Fashion Yatra store in 2008-09. these would have added to revenue growth in the June 2009 quarter. It has also opened two Westside stores in the June 2009 quarter, taking the total number of Westside stores to 38 and total stores to 44.
- While sales fell, its cost of materials fell by a greater degree, with cost of materials declining by 19.5% and salaries fell too. Hiving off the hypermarket seems to be the logical reason for this, though is not known if the company has rationalised manpower. Advertising and sales promotion have not fallen, however, indicating the company has invested heavily in pushing sales in a tough market.
- Its operating profit margin improved due to lower costs, rising to 3.1% from 0.7%.
- Trent’s other income fell during the quarter, possibly due to lower income from its investments. It has a sum of Rs 87 crore invested in mutual funds, which is unutilised money from its July 2007 rights issue. Other income nearly halved to Rs 6.6 crore. Though its profit before tax fell by 19% to Rs 7.8 crore as a result, a sharp increase in its tax liability led to its net profit falling by 37.5% to Rs 5.1 crore.
The company’s results were reported after the stock markets had closed. Today, its share price closed at Rs 497, down by 0.4%. It is trading up by 5% from its level a month ago.