{"id":6108,"date":"2023-06-29T19:50:00","date_gmt":"2023-06-29T14:20:00","guid":{"rendered":"https:\/\/www.thirdeyesight.in\/?p=6108"},"modified":"2023-09-23T09:23:58","modified_gmt":"2023-09-23T03:53:58","slug":"zaras-revenues-jump-even-without-adding-new-stores","status":"publish","type":"post","link":"https:\/\/myechoproject.com\/TES\/zaras-revenues-jump-even-without-adding-new-stores\/","title":{"rendered":"Zara\u2019s revenues jump even without adding new stores"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Raghavendra Kamath, Financial Express <\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>June 29, 2023<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Zara, touted as \u201cFast Fashion Queen\u201d, has achieved a unique feat in India. The Spanish brand has been growing its revenues without opening any new stores.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The fashion brand, run by a joint venture between Tata-owned Trent and Spain\u2019s retail group Inditex, posted a 40.7% growth in its revenues to Rs 2553.8 crore in FY23. The catch is that while many retailers\/brands garner sales from opening new stores, Zara did not open any store but closed one during FY23.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In FY21 and FY22, its store count remained constant at 21 but its revenue grew 61.2% in FY22. Zara\u2019s revenues grew at a 15.5 % CAGR in the last five years.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cZara did not foray into any new city and closed one store. That said, it saw an exceptional performance on store productivity (83% higher than FY19). The increase in revenues lead to highest ever Ebitda margins at 16.3%,\u201d said Nuvama Institutional Equities in a recent report.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The contribution in productivity includes contribution from online and also increase in store sizes, the brokerage said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A mail sent to Inditex did not elicit any response. Trent executives could not be contacted.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Experts attribute Zara\u2019s success to increase in customer spends and improved offerings by the brand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>\u201cThe customer base they are targeting has grown and their merchandise mix has become sharper,\u201d said Devangshu Dutta, chief executive officer at Third Eyesight, a retail consultant.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Dutta said when a retailer opens stores, it would immediately boost sales, but to maintain sales momentum, one has to have \u201cright merchandise at right price and have stores at right locations\u201d.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Zara is known to churn its designs and styles very fast, and target young customers. In its Indian venture also, its parent Inditex controls merchandise mix and so on.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThe said entities (Zara and Massimo Dutti) are obliged to source merchandise only from the Inditex Group. Also, the choice of product &amp; related specifications are at the latter\u2019s discretion. Further, the entities are dependent on Inditex for permissions to use the said brands in India subject to its terms &amp; specifications,\u201d Trent said in its FY23 annual report.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Zara is also focusing on opening in select locations, a reason it could not open more stores in the country, experts said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThe incremental store openings for Zara continue to be calibrated with focus on presence only in very high-quality retail spaces,\u201d Trent said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Susil Dungarwal, founder at Beyond Squarefeet, a mall management firm, said that propensity to spend has gone up among Indian shoppers after the pandemic and Zara being a renowned global brand with its stylish merchandise seems to be have been the beneficiary of the trend.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThey understand customers very well and brought products which are liked by Indian shoppers in terms of looks, styles and so on,\u201d Dungarwal said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Zara is a case study for Indian brands as to how to run a retail business successfully, he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>(Published in <a href=\"https:\/\/www.financialexpress.com\/business\/brandwagon-zaras-revenues-jump-even-without-adding-new-stores-3147280\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Financial Express<\/a>)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Experts attribute Zara\u2019s success to increase in customer spends and improved offerings by the brand <\/p>\n","protected":false},"author":1,"featured_media":6109,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[25,27,36,37,131,43,46,1],"tags":[353,32,239,145,55,187,59,190,191,69,241,165,82,84,86,195,376,203,398,124,569,662,67],"class_list":["post-6108","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-apparel","category-branding","category-lifestyle-fashion","category-marketing","category-product-development-and-design","category-retail","category-strategy","category-uncategorized","tag-business-strategy","tag-fashion","tag-fashion-lifestyle","tag-fashion-brands","tag-fast-fashion","tag-global-fashion-brands","tag-india","tag-india-entry-strategy","tag-indian-market","tag-indian-retail-sector","tag-international-fashion-brand","tag-joint-venture","tag-lifestyle-fashion","tag-merchandise-planning","tag-merchandising","tag-modern-retailing","tag-real-estate","tag-retail-productivity","tag-store-productivity","tag-strategy","tag-tata","tag-tata-group","tag-zara"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - 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