Everyone in India is loving Zara! Sales cross $100mn mark

Spanish fashion brand Zara is the first apparel brand to cross the $100-million sales mark in India, reported the Economic Times.

Inditex Trent, the joint venture between Zara brand owner Inditex and Tata Group's retail arm Trent, registered 24% annual growth in sales for the year ended March 2015 at Rs 721 crore ($114 million), Trent said in its annual report released on Thursday.

Trent recorded sales of Rs 580 crore in 2013-14. However, its growth has nearly halved from a year ago period when, it was 43%.

Moreover, it took five years for the company to reach this stage in India.

According to the report, there is a plan to open more Zara stores in India in the next 3-4 years in the major cities. However, the availability of high quality retail spaces is one challenge before the company.

With 16 stores now, average sales per store of Zara is about Rs 45 crore a year, far more than top apparel brands such as Louis Philippe, Levi's and Marks & Spencer, and even slightly higher than department store chains Shoppers Stop and Lifestyle.

Its closest rivals in India — Benetton (wholesale) and Levi's — had recorded about Rs 599 crore each in sales last year and have not declared their FY14-15 figures so far.

"Zara has set a benchmark in terms of both growth and profitability. What has helped it is the brand's desirability and connect with consumers," said Devangshu Dutta, chief executive at retail consultancy Third Eyesight.

Most of Zara's back-end and merchandise sourcing are handled by Inditex, while the Tata expertise is mainly for identifying real estate and locations.

Inditex Trent has replicated in India a model that has worked for Zara globally — creating affordable, copycat versions of the latest fashions or designer wear and making them available to shoppers in double-quick time.

Inditex controls almost every bit of its operations, from design to distribution.

(Image: Reuters)