Spanish fashion giant Zara has officially closed its flagship store in Mumbai, marking the end of an eight-year run at the iconic Ismail Building in the Fort area. The 51,300-sq-ft shop, once the largest Zara outlet in India, ended operations on 24th Feb.

Customers and netizens were shocked when a closure notice was seen at the entrance of the store. The notice posted widely on social media, stated: "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." No reason for the shutdown was given.

High costs vs. sales: The real reason behind the exit?

Zara’s parent company, Inditex SA, operates in India through a joint venture with the Tata Group’s Trent. The flagship store at Hatuma Chowk Square, which opened in 2017, was celebrated for its grand scale and unique architectural restoration. Even though it's a prominent location, insiders suggest that the store’s revenue failed to match the high rental costs.

Zara Shuts Iconic Mumbai Flagship Store At 110-Year-Old Ismail Building In Fort Area

Records seen by Business Standard showed that Inditex Trent had entered into a 21-year lease agreement in April 2016 for ₹2.25 crore monthly rent and an upfront security of ₹13.5 crore. The original lease deal was fixed at ₹30 crore annually for five years, one of the largest retail lease transactions in India's fashion space. However, managing these costs with the changing retail trends was difficult.

Though the shutdown has disappointed many fashion lovers, an official earlier said that Zara had been adopting a global strategy of opening fewer but bigger stores. This change was already in the pipeline before the COVID-19 pandemic that reshaped retail opportunities across the globe.

Where can shoppers still find Zara in Mumbai?

Even after the shutdown, Zara still has a presence in Mumbai and surrounding areas. Consumers can still shop at its stores at Phoenix Market City (Kurla), Phoenix Palladium (Lower Parel), and Viviana Mall (Thane).

You might also be interested in - India had 2nd highest internet shutdowns in 2024, more than any other democracy: Report