Spanish retail brand Zara closed its 51,300-square-foot flagship store in Mumbai. The store was located in the historic Ismail Building in the Fort area.
While Zara gave no specific reason for the closure, a notice outside its store stated, "This Zara store will cease operations after the end of business on 23rd February. We will continue to assist you at our Zara stores in Mumbai and at Zara.com/in."
As per report, Zara leased the store in 2017, for Rs 2.25 crore per month in rent, amounting to Rs 27 crore annually. Details sourced from real estate data analytics platform CRE Matrix stated that the initial five months were free of rent and on completing three years of the 21-year lease tenure, the rent would go up 5% per annum.
As of now, Zara reportedly was paying about Rs 36 crore a year, which translates to Rs 9.86 lakh a day. This high rental expense is said to be the main reason behind Zara's decision to close the store.
Zara's parent firm, Inditex SA, operates in India through a joint venture with the Tata Group's Trent.
According to property registration documents obtained by Propstack.com, luxury fashion house Purple Style Labs has now leased the 60,000 sq ft space in the same heritage building for Rs 36 crore annually, securing a five-year lease.
Meanwhile, Zara continues to operate three other outlets in Mumbai and Thane-at Phoenix Market City (Kurla), Phoenix Palladium (Lower Parel), and Viviana Mall (Thane).