On February 24, Zara closed its 51,300-square-foot flagship store in Mumbai’s historic Ismail Building after eight years of operation. The closure notice did not specify reasons but stated the store ceased operations after February 23. The location, which opened in 2017 as India’s largest Zara outlet, faced challenges keeping sales up with high rental costs, particularly given the ₹2.25 crore monthly rent and a security deposit of ₹13.5 crore. Despite this closure, Zara remains active in Mumbai with three other stores. Inditex SA operates Zara in India through a joint venture with Tata Group’s Trent.
On February 24th, after eight years of operation, the Spanish retail brand Zara officially shut down its large 51,300-square-foot flagship store located in the historic Ismail Building, a well-known landmark in the Fort area. A closure notice, noted and circulated by internet users on social media, confirmed the shutdown of the ‘iconic’ five-story location.
What Led to the Closure of Zara’s Largest Store in India?
A notice affixed to the entrance of the store did not provide specific reasons for the closure, merely stating: “This Zara store will cease operations after the close of business on 23rd February. We will continue to serve you at our Zara stores in Mumbai and at Zara.com/in.”
Zara’s parent firm, Inditex SA, operates in India through a partnership with the Tata Group’s Trent. When the brand’s flagship store at Hutatma Chowk Square (Fort area) was inaugurated in 2017, it became the largest Zara outlet in India and the company’s only standalone store in Mumbai. Several local architects collaborated with Zara’s in-house architectural team for two years to restore the premises prior to the store’s opening.
At that time, Inditex Trent reportedly paid Rs 30 crore annually for the lease, which included a five-year lock-in period, representing the largest retail lease agreement for a fashion brand in the nation.
According to a registration document acquired by Business Standard, the lease was for a duration of 21 years and was officially registered on April 1, 2016.
The company paid a monthly rent of ₹2.25 crore for its five-story establishment, along with a security deposit of ₹13.5 crore. However, a source familiar with the situation disclosed that the store’s sales struggled to match the high rental expenses.
A spokesperson had previously indicated that Zara’s global strategy emphasized fewer but larger stores, a strategy that began before the COVID-19 pandemic. Despite this closure, the brand continues to operate three additional outlets in Mumbai and Thane—located at Phoenix Market City (Kurla), Phoenix Palladium (Lower Parel), and Viviana Mall (Thane).