*Trent is down >35% from its peak valuation, achieved about 3.5 months back* 📛📛 And the biggest contributors to this fall have been two days - The day when Q2FY25 and Q3FY25 results were announced. And the reason? In my opinion, which I can be totally wrong on, remains what I have been calling out for about a year, which I also detailed in a deepdive a few weeks back. *What did I share there?* All below (will be a bit long). .. *See, Zudio had a total of ~560 outlets and continued to open a new store every 5 days as of Q2 end.* However, Reliance’s Yousta had handsomely caught up to become 10% as big. It had opened ~60 outlets in 39 cities in just 16 months since the launch of the first-ever store in Hyderabad in Aug 2023. Sure, some of the outlets were converts of existing Trent outlets, but the growth was steep nonetheless - an average of a new store every 8 days. And pace would have been much slower in the initial days. Thus, most likely, as of Q2 end, Yousta was opening a new store just as fast as Zudio! .. *More importantly, all of this happened when Reliance Retail had, in parallel, shut nearly a thousand outlets across formats in the last 12 months.* -> That’s an indicator that Reliance went bullish on Yousta at a time when had turned conservative as a business -> And that’s sort of proof, that Reliance management believes that Yousta is receiving ample love Otherwise, I doubt that Reliance would have been playing this with such energy. .. *And it’s not just Reliance.* Just 2 months before Reliance launched Yousta, Shoppers Stop had also launched Intune to compete in the same segment. -> And it too had ~60 outlets in about 20 cities at Q2 end. Thus, just as aggressive, with a higher focus on major cities -> Hence, practically, Reliance and Shoppers Stop had built a competitor as big as 20% the size of Zudio in just about 16-18 months as of Q2-end And that explains better than anything else, why Zudio’s sales growth has slowed down rapidly, also significantly impacting Trent’s share price 📛📛 Numbers clearly capture the impact of pain caused by Reliance and Shoppers Stop. As Reliance and Shopper’s Stop continues with the rapid expansion of Yousta and Intune, the effect on Zudio will only grow. .. *This also explains why Trent’s management has been launching newer formats and businesses.* -> In the last 6 months, they have launched Misbu to compete with Reliance’s Tira, Dabur’s NewU, Nykaa and others in the beauty and personal care segment -> And in a bid to drive up margins and AOV at Westside, it has also forayed into lab-grown diamond jewellery Because the management knows, that Zudio can no longer grow the way it had been growing, and the shareholders need growth anyhow to justify the valuations 📛📛 What do you think? .. *My CC Referrals:* - Plat Metal: https://americanexpress.com/en-in/referral/platinum?ref=jAYANMH2H5&XL=MIANS - Plat Reserve: https://americanexpress.com/en-in/referral/platinum-reserve?ref=jAYANMu0C1&XL=MIANS *Check my work with:* - 3.3k+ on Decoding The Dragon (https://t.ly/chnwj) - 2.8k+ on Deepdives with Jay (https://t.ly/dwj) - 2.4k+ on BharatNama (https://t.ly/bwj) Best, Jayant Shilanjan Mundhra