On February 24th, after eight years of operation, Spanish retail brand Zara officially closed its 51,300-square-foot Mumbai flagship store in the historic Ismail Building, a landmark in the Fort area. A closure notice, spotted and shared by netizens on social media, confirmed the shutdown of the 'iconic' five-story location.
Why Did Zara Shut Down Its Largest Store in India?
A notice on the store's entrance provided no specific reason for the closure, simply stating: "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."
Zara's parent company, Inditex SA, operates in India through a joint venture with the Tata Group's Trent. When the brand's flagship store at Hatuma Chowk Square (Fort area) opened in 2017, it was the largest Zara outlet in India and the company's only standalone store in Mumbai. Several local architects had worked with Zara's in-house architecture team for two years to restore the space before the store was opened.
At the time, Inditex Trent reportedly paid Rs 30 crore annually for the lease, with a five-year lock-in period, marking the biggest retail lease deal for a fashion brand in the country.
As per a registration document obtained by Business Standard, the lease tenure was set for 21 years and was officially registered on April 1, 2016.
The company paid a monthly rent of ₹2.25 crore for its five-story store, along with a security deposit of ₹13.5 crore. However, a source familiar with the matter revealed that the store's sales struggled to keep pace with the high rental costs.
A spokesperson had previously mentioned that Zara's global strategy focused on fewer but larger stores, a move that predated the COVID-19 pandemic. Despite the closure, the brand continues to operate three other outlets in Mumbai and Thane-at Phoenix Market City (Kurla), Phoenix Palladium (Lower Parel), and Viviana Mall (Thane).
