Zara Shuts Down Mumbai Flagship Store Over ₹3 Crore Monthly Rent Shocker

Zara has closed its flagship store in South Mumbai’s Fort area after eight years due to high rental costs, reportedly ₹3 crore per month. The 51,300 sq. ft. space in the historic Ismail Building will now be leased by luxury retailer Purple Style Labs. Rising rents and a shift toward mall-based and online sales contributed to the closure. Inditex Trent had invested ₹35 crore in renovations and paid ₹30 crore annually in rent. With this closure, Zara now operates five mall-based stores in Mumbai.

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• Zara Closes Flagship Store in Mumbai’s Fort Area After Eight Years

Zara Shuts Down Mumbai Flagship Store Over ₹3 Crore Monthly Rent Shocker

Spanish fashion brand Zara has closed its well-known store in South Mumbai’s Fort area after eight years of operation. The store, which opened in 2017, was Zara’s sixth in Mumbai and its 20th in India. The closure has sparked widespread discussion online, especially after reports revealed that the company was paying a staggering ₹3 crore in monthly rent.

According to Business Standard, Zara had signed a 21-year lease in 2016, initially agreeing to a monthly rent of ₹2.25 crore. The first five months were rent-free, but after the first three years, the rent increased by 5% annually, bringing the current monthly figure to ₹3,01,52,152 (approximately ₹36.18 crore per year). Sources suggest that the store shut down because its sales could not keep pace with the soaring rental costs.

A notice posted outside the store, which quickly went viral on social media, read: “Please be informed that this Zara store will cease operations after the end of business on February 23. We will continue to assist you at all our Zara stores in Mumbai.”

The revelation of the store’s high rent and its subsequent closure left social media users shocked. One person reacted, “Are you kidding me?” while another pointed out, “Mumbai rentals are insane; this could be the future of many quick-commerce dark stores.” Some users debated the financial strategy behind leasing high-end locations, arguing that such flagship stores serve more as brand statements than profit centers. Others questioned why companies agree to such exorbitant rents.

Meanwhile, the space previously occupied by Zara will soon house Pernia’s Pop-Up Shop. The new tenant initially sought a 15-year lease but is expected to sign an agreement structured in five-year increments.

Zara Closes Flagship Store in Mumbai’s Fort Area After Eight Years

After operating for eight years, Zara has officially closed its flagship store in South Mumbai’s Fort area, vacating the historic 110-year-old Ismail Building on February 24. Spanning 51,300 sq. ft., the space will now be leased by Indian luxury retailer Purple Style Labs, which will pay a staggering ₹3 crore per month—equivalent to ₹10 lakh per day—under a five-year lease agreement totaling ₹206 crore. The lease follows an incremental rent structure, starting at ₹36 crore in the first year and increasing annually to ₹45.6 crore by the fifth year. Additionally, the company has paid an ₹18 crore security deposit, along with ₹53 lakh in stamp duty and ₹1,000 in registration fees.

Purple Style Labs, founded in 2015 by Abhishek Agarwal, owns the luxury retail platform Pernia’s Pop-Up Shop, showcasing designer brands like Tarun Tahiliani, Falguni Shane Peacock, Amit Aggarwal, Gaurav Gupta, and Seema Gujral. It also acquired Wendell Rodricks’ brand in 2020 and operates stores in Mumbai’s Kemps Corner, Juhu, and Bandra. Although Zara has not provided an official reason for the closure, a notice at the store simply stated that operations would cease on February 23, while customers could still shop at other Mumbai outlets and online.

The store, which opened in 2017, was the brand’s first standalone location in Mumbai, with Inditex Trent—a 65:35 joint venture between Spain’s Inditex and Tata Group’s Trent—investing ₹35 crore in renovation and agreeing to an annual rent of ₹30 crore, making it one of India’s largest retail lease transactions at the time. However, rising rental costs and sales challenges contributed to its closure, aligning with a global shift in retail strategy where brands focus on high-traffic malls and digital sales over independent flagship stores.

With this closure, Zara’s presence in Mumbai is now limited to five mall-based outlets in Phoenix Palladium (Lower Parel), Phoenix Market City (Kurla), Viviana Mall (Thane), Infiniti Mall (Malad), and Oberoi Mall (Goregaon). Inditex, which entered India in 2009 through a partnership with Trent, opened its first store at Select Citywalk Mall in New Delhi in 2010. As of fiscal 2024, Inditex Trent operated 23 stores across India, generating ₹2,775 crore in revenue and ₹244 crore in profit.