Spanish fashion brand Zara has closed its iconic SoBo store in South Mumbai's Fort area after eight years. A notice posted in front of the store went viral on social media. The clothing company was paying ₹3 crore in monthly rent.
Reportedly, Zara leased the property for 21 years in 2016 for a monthly payment of ₹2.25 crore. The rent for the initial five months was free. Upon completing the first three years of the 21-year tenure, the rent increased by 5% per annum. Calculations put the ongoing rent at ₹3,01,52,152 per month or ₹36,18,25,823 per annum.
Business Standard reported that a familiar source claimed that the store shut down after its sales could not keep up with the high rentals.
Viral notice on social media:
"Please be informed that this Zara store will cease operations after the end of business on February 23. We will continue to assist you at all our Zara stores in Mumbai," read a notice outside the Zara store in South Mumbai.
What did social media say?
The shutting down of the luxury brand and the exuberant rent of the property left social media in disbelief. One individual posted, “Are you kidding me?” Another added, “This will be the fate of many quick commerce dark stores after a while. Even though located in a corner, Mumbai rentals are crazy.”
{{/usCountry}}The shutting down of the luxury brand and the exuberant rent of the property left social media in disbelief. One individual posted, “Are you kidding me?” Another added, “This will be the fate of many quick commerce dark stores after a while. Even though located in a corner, Mumbai rentals are crazy.”
{{/usCountry}}A third commented, “As per my understanding, locations like these aren't for making store-level profits; it's more about brand placement.” A fourth expressed, “Don’t blame the Mumbai real estate. Blame the companies who agree to pay such ridiculous amounts.” A fourth wrote, “The place was iconic. Totally worth it. Whenever I went, it was full. Rent wasn't a problem in that location.”
Who is occupying the space?
The iconic space will soon house Pernia’s Pop-Up Shop. The new occupant reportedly wanted a 15-year lease tenure, but the agreement is likely to be in multiples of five years.