After grand success, Zara plans 18 stores in India

Spanish fast-fashion brand Zara is making waves in India. As per a recent survey, its average sales per store soared much above other top apparel brands to be at par with the country's largest jewelry chain Tanishq. With annual sales of Rs 405 crores, each of Zara's nine stores in the country on an average made Rs 45 crores last fiscal, over six times more than the country's largest apparel brand Louis Philippe and a tad higher than the country's largest department chain Shoppers Stop. No wonder, the company is planning to open 18 stores across the country.

Inditex Trent, the joint venture between Zara brand owner Inditex and Tata Group's retail arm Trent, clocked 56 per cent growth in sales without any new store addition in the year ended March 2013, reveals a its latest annual report. Earlier, Zara reported high double digit growth in same-store sales in a market where most retailers struggled for a single digit like-to-like growth due to a slowdown in consumer spending. At New Delhi’s Select Citywalk Mall, anchor tenant Pantaloons, spread over 25,000 square feet generates an average monthly sales of Rs 4 crore, while Zara does Rs 7-8 crore a month in its 16,500-square foot store.

Globally, Inditex controls almost every bit of Zara's operations from design to distribution to a large chunk of manufacturing. If a new style is not a hit within a week, it goes off the shelf. Even popular styles don't stay long. There is no warehousing, and reorders are rare.

In 2012-13, Inditex Trent reported a loss of Rs 10.08 crores on its proposed store in Phoenix Market City Mall in Mumbai, which it had to completely redo with a new concept due to continuous water leakage. It did not provide any profit or loss figure for the entire year. The company had made profits of Rs 38.3 crores and Rs 22.5 crores in the previous two financial years.