Shares of Trent experienced a remarkable surge, rocketing up by 12% in just two days and reaching an impressive all-time high of ₹8,318.25 on the Bombay Stock Exchange (BSE) on Wednesday. This bullish trend follows the company’s recent pilot launch of its innovative lab-grown diamond (LGD) brand, ‘Pome,’ which is now available in select Westside stores.
Launch of Pome: A New Era in Jewelry
The Pome brand is making its debut in key markets including Mumbai, Bengaluru, Hyderabad, and Gurgaon. This pilot initiative is strategically designed to evaluate consumer response with a select range of SKUs displayed in an engaging kiosk format. Trent has ambitious plans for Pome, aiming to develop a full-fledged LGD jewelry brand, introduce exclusive brand outlets (EBOs), and significantly accelerate growth in this burgeoning segment.
Pome: Positioning and Strategy
Kotak Equities, a notable domestic brokerage firm, has described Pome as the “Zudio of the jewellery segment,” emphasizing its strategic pricing approach which embodies the concept of making “diamonds accessible to all.” This positioning is poised to attract a broader consumer base, potentially transforming the diamond jewelry market in India.
Understanding Pome’s Pricing Strategy
Pome has set its pricing to remain competitive within Trent’s established market range. For example, a 1-carat solitaire engagement ring is priced between ₹24,000 and ₹29,000. Analyses suggest that the cost of a lab-grown diamond solitaire in Pome’s collection averages at approximately ₹13,000- ₹17,000 per carat.
Value Proposition and Discounts
According to the brokerage report, Pome’s pricing framework offers compelling discounts: an average of 30% off the ₹15,000-20,000 range for natural diamond studded jewelry, and an astonishing 80-85% discount on high-value natural diamond pieces priced above ₹500,000. This strategy not only targets price-sensitive consumers but also positions Pome as a disruptor in the luxury jewelry market.
Economic Viability of Pome
Initial calculations reveal that Pome can achieve gross margins ranging from 45% to 50%, which indicates a robust economic model. Furthermore, the retail economics—especially for exclusive brand outlets—are expected to be somewhat comparable to well-known names like Caratlane, particularly if Pome can maintain high foot traffic and robust sales volumes despite its competitive pricing.
Broader Market Trends and Growth Potential
The launch of Pome follows Trent’s successful entry into the mass-priced beauty segment with Zudio Beauty, which has instilled confidence in their growth strategy. Beauty and personal care (BPC) sales have significantly contributed to revenues in Westside and Zudio stores. The salience of emerging categories has increased to 20% of standalone revenue, up from 10% earlier, illustrating the growing consumer interest in diverse product offerings.
Trent’s Stock Performance
In addition to its innovative product launches, Trent’s shares have proven to be multibaggers, recording an astounding 111.7% return over the past six months, 297% over the last year, and 175% this year alone. This performance underscores the company’s strong market positioning and the potential upside associated with its expanding brand portfolio, including the promising Pome line.
