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Sagar \n Malviya, The Economic Times\n <\/i><\/p>\n
Sagar \n Malviya, The Economic Times
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Mumbai, \n 10 July 2015 <\/i><\/p>\n
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Spanish \n fashion brand Zara has become the fastest apparel brand in India \n to cross the $100-million sales mark, five years after it opened \n its first shop here.
\n Inditex Trent, the joint venture between Zara brand owner Inditex \n and Tata Group’s retail arm Trent, posted 24% annual growth in \n sales for the year ended March 2015 at Rs 721 crore ($114 million), \n Trent said in its annual report released on Thursday. In FY13-14, \n it had sales of Rs 580 crore. However, sales growth has nearly \n halved from a year ago period when, it was 43%.
\n Plans are on to open a few more Zara stores in India over the \n next three to four years in the major cities, the report said. \n The primary challenge to faster expansion is the availability \n of high quality retail spaces, which can be expected to generate \n reasonable sales throughput, it added.
\n With 16 stores now, average sales per store of Zara is about \n Rs 45 crore a year, far more than top apparel brands such as Louis \n Philippe, Levi’s and Marks & Spencer, and even slightly higher \n than department store chains Shoppers Stop and Lifestyle. Its \n closest rivals in India \u2014 Benetton (wholesale) and Levi’s \n \u2014 had posted around Rs 599 crore each in sales a year ago \n and haven’t declared their FY14-15 numbers yet. Analysts don’t \n expect them to overtake Zara though. <\/p>\n
“Zara has set a benchmark in terms of both growth and \n profitability. What has helped it is the brand’s desirability \n and connect with consumers,” said Devangshu Dutta, chief \n executive at retail consultancy Third Eyesight. <\/b>Industry executives \n said Zara’s per-square-feet sales must have dropped as the novelty \n factor fades off in bigger markets, especially in Delhi and Mumbai. \n
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Most of Zara’s back-end and merchandise sourcing are handled \n by Inditex, while the Tata expertise is mainly for identifying \n real estate and locations. Inditex Trent has replicated in India \n a model that has worked for Zara globally \u2014 creating affordable, \n copycat versions of the latest fashions or designer wear and making \n them available to shoppers in double-quick time. Inditex controls \n almost every bit of its operations, from design to distribution. \n <\/p>\n
If a new style is not a hit within a week, it goes off the shelves \n of over 2,000 Zara stores worldwide. The brand will face intense \n competition from similarly-priced, fast fashion rivals such as \n Gap, which entered a month ago and H&M, which will launch \n stores soon. As the world’s second most populated country, India \n is an attractive market for international brands, especially since \n youngsters in the country are increasingly embracing western-style \n clothing.
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