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Post covid-19, Zara plans for further expansion in India

“India won’t see COVID-related shuttering of stores, but there could be some category B cities, where they could close. The reason could be that they consolidate their stores in India. If anything, they will take up more space,” said Abhishek Sharma, director, retail at Knight Frank India.

Inditex owned Zara is planning to increase the number of stores in India, contrary to its decision of shutting down 1000-1200 stores across Asia and Europe.

Zara which is run through a joint venture with Trent under Trent Retail India Private Limited currently runs 22 stores in the country and is concentrated in tier 1 cities of India. It further plans to open up four to five more stores within a span of 12 months, said people familiar with the brand. With the motive of making the company’s brands ready for the future and match them up with the digital environment, Inditex is considering to shut down its relatively smaller areas and introduce the new retail technology in the other stores.

“India won’t see COVID-related shuttering of stores, but there could be some category B cities, where they could close. The reason could be that they consolidate their stores in India. If anything, they will take up more space,” said Abhishek Sharma, director, retail at Knight Frank India.

Zara, which entered India in 2010, has become a rage among the premium segment of the society. Deemed as an affordable luxury by many, Zara has acted as an anchor store for most of the malls in cities like Mumbai and Delhi. Revenue at the company elevated from Rs1023.10 crore in FY16 to 1,437.87 crores for the year ended 31 March 2019, according to annual filings by its local joint venture partner in India, however, it remained light on expansion.

“Zara appeals to the country’s fashion aspirants and has helped plugged the supply gap in casual clothing,” said Pakhi Saxena, practice head, retail, and CPG, Wazir Advisors.

Considering the attention it got by the Indian shoppers and the growing preference of online retailing, it decided to go digital by launching its own website, allowing people to shop remotely.

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