Clothing brand Zara can’t afford its store at Fort anymore

On Monday, a sign at the store’s doorstep stated, ‘Please be informed that this Zara store will cease operations after the end of business on 23rd February…’

MUMBAI: Spanish retail brand Zara has shut its store at the Edwardian neoclassical Ismail Building at Flora Fountain in South Mumbai. The space in the 119-year-old building will soon house Pernia’s Pop-Up Shop instead.

Despite leasing the entire ground and five-storied building, the company utilised only three floors to sell clothes, leaving the rest vacant . (Bhushan Koyande/HT Photo)

The Zara store, when it opened on May 4, 2017, was the sixth in Mumbai and the 20th in India. Within eight years, it was curtains due to mismatched standalone revenue vis-a-vis expenses. On Monday, a sign at the store’s doorstep stated, ‘Please be informed that this Zara store will cease operations after the end of business on 23rd February…’

The Spanish fashion brand Inditex has a joint venture with the Tata Group’s Tata Trent called Inditex Trent under which the Zara stores in India operate. In September, the brand opened its 24th store in India, at Bengaluru. With the Fort store shutting, the number is down to 23. In Mumbai (including Thane), the company is now down to five stores.

Arif Fazlani, managing director of the Fazlani Group, which owns the majestic building, confirmed Zara’s exit from the Fort area. “Zara will hand over the premises by the end of this month, and starting March 1, there will be a new tenant,” he said.

On Monday, workers were seen dismantling the interiors. One of the staffers at the store shared that the staff had been reassigned to other Mumbai outlets.

Despite leasing the entire ground and five-storied building, the company utilised only three floors to sell clothes, leaving the rest vacant despite having Zara Home as one of its offerings. “Prior to Zara’s opening, the building was completely restored by us,” said Fazlani. “They did the interiors.”

Inditex Trent had leased the five-storied building starting April 1, 2016 for a monthly rent of ₹2.25 crore or ₹473 per square foot, as per details sourced from real estate data analytics platform CRE Matrix. The initial five months were free of rent. On completing three years of the 21-year lease tenure, the rent escalation was 5% per annum.

When calculated, the ongoing rent worked out to ₹3,01,52,152 per month or ₹36,18,25,823 per annum. A source shared that the new tenant has slightly bettered the rental payout. The new occupant too wants the premises for a long tenure of over 15 years; however, the agreement is likely to be in multiples of five years.

Founded by Indian-American fashion entrepreneur Pernia Qureshi in 2012 as a fashion e-commerce getaway, Qureshi exited Pernia’s Pop-Up Shop in 2019 to Purple Style Labs. The brand houses over 500 of India’s pre-eminent designer brands.

Spread over 8,000 sq ft in South Mumbai’s Kala Ghoda, Pernia’s Pop-Up Shop also has stores in Bandra, Juhu and Kemps Corner. For the last few months, the company had been scouting for a large-format store of over 25,000 sq ft. With the heritage Ismail Building now available, it decided to move in.

Sources shared that the Kala Ghoda store will be discontinued, and starting June or July, operations will commence at the restored Ismail building.

A questionnaire emailed to Zara India did not elicit a response. On the other hand, Pernia’s Pop-Up Shop’s holding company, Purple Style Labs’ Founder Abhishek Agarwal said that they would issue a statement shortly.