Zara Closes The ‘Iconic’ 5-Storey Flagship Store in South Mumbai; Was Paying Rs. 3 Crores in Rent

The 'iconic' five-storey flagship Zara store in South Bombay, which had been housed in a pre-colonial building for eight years, has closed because the business could no longer pay the ₹3 crores monthly rent. According to reports, it was the biggest space-related transaction a high-street fashion brand had ever made abroad.

Zara’s SOBO Stores Closes 

 A notice on Zara’s South Bombay store's entrance provided no specific reason for the closure, simply stating, "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 Zara.com/in/."

In 2017, after a two-year renovation process, the Spanish luxury fashion brand opened its flagship store, which spans more than 51,300 sq. ft. and is located in the 119-year-old pre-colonial Ismail Building at Flora Fountain in Mumbai's Fort neighbourhood. 

Netizens claimed that the "majestic" SoBo store was even better than the Champs Elysées' Zara store in Paris.

Even though Zara Home was one of the products offered, the company only used three floors of the five-story facility, which was leased, mostly to sell clothing.

Meanwhile, Arif Fazlani, managing director of the Fazlani Group, which owns the historical building, confirmed Zara’s exit from the Fort area. “Zara will hand over the premises by the end of this month, and starting March 1, there will be a new tenant,” he told Hindustan Times on February 24th. 

“Prior to Zara’s opening, the building was completely restored by us,” said Fazlani. He added that the Spanish brand did the interior decor for their store. 

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Why The Spanish Brand Closed Its Flagship Store

The store's high operating costs caused it to struggle with profitability despite its ideal location near Flora Fountain. According to retail analysts, the demographics of consumers have changed, with affluent consumers now preferring neighbourhoods like Worli and Lower Parel, where Zara is still located at Palladium Mall.

When calculated, the ongoing rent worked out to ₹3,01,52,152 per month or ₹36,18,25,823 per annum.

According to information obtained from the real estate data analytics firm CRE Matrix, Zara rented the 51,300 sq. ft. space in 2017 for an incredible ₹2.25 crore per month, or ₹27 crore yearly. However, for the first five months, the Spanish brand did not have to pay rent. The rent increased by 5% annually once the third year of the 21-year contract was over.

“The operational viability of the independent Zara Flora Fountain store, when compared to other opportunities like the three Zara outlets in the city's shopping malls and the growing online business, led to the decision to focus resources and investments on those opportunities,” the Times of India cited sources as saying.

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Purple Style Labs Steps In

According to a Hindustan Times report, the Ismail Building will now house Pernia’s Pop-Up Shop.

Indian-American fashion entrepreneur Pernia Qureshi established Pernia's Pop-Up Shop in 2012 as a fashion e-commerce retreat. Purple Style Labs acquired the brand from Qureshi in 2019. More than 500 of India's leading designer labels are currently housed there.

With a five-year contract, luxury fashion brand Purple Style Labs has now rented the 60,000 sq. ft. space in the historic building for Rs. 36 crore a year, according to property registration documents obtained by Propstack.com.

According to sources, the rental payout has been somewhat improved by the new renter. The lease will probably be in multiples of five years, but the new tenant also wanted the space for a lengthy period, probably more than 15 years.

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