Spanish fashion brand Zara has become the first apparel brand in India to cross the 100-million US Dollar sales mark, five years after it opened its first shop in this country.
Inditex Trent, the joint venture between Zara brand owner Inditex and Tata Group’s retail arm Trent, posted 24 per cent annual growth in sales for the year ended March 2015 at Rs 721 crore ($114 million), Trent said in its annual report released on Thursday. In FY13-14, it had sales of Rs 580 crore. However, sales growth has nearly halved from a year ago period when, it was 43 per cent.
Plans are on to open a few more Zara stores in India over the next three to four years in the major cities, the report said. The primary challenge to faster expansion is the availability of high quality retail spaces, which can be expected to generate reasonable sales, it added.
With 16 stores now, average sales per store of Zara is about Rs 45 crore a year, far more than top apparel brands and even slightly higher than the top department store chains in India.
“Zara has set a benchmark in terms of both growth and profitability. What has helped it is the brand’s desirability and connect with consumers,” Devangshu Dutta, chief executive at retail consultancy Third Eyesight said. Industry executives said Zara’s per-square-feet sales must have dropped as the novelty factor fades off in bigger markets, especially in Delhi and Mumbai.
Most of Zara’s back-end and merchandise sourcing are handled by Inditex, while the Tata expertise is mainly for identifying real estate and locations. Inditex Trent has replicated in India a model that has worked for Zara globally creating affordable, copycat versions of the latest fashions or designer wear and making them available to shoppers in double-quick time. Inditex controls almost every bit of its operations, from design to distribution.
