Zara has closed its iconic Mumbai store in the historic Ismail Building. The closure is attributed to the high rental costs, which reportedly reached ₹3 crore per month. Factors like changing consumer demographics and the success of Zara’s other mall-based stores and online presence also played a role.
Spanish fashion giant Zara has closed its flagship store in South Mumbai after nearly eight years. The five-story iconic Mumbai store at Hutatma Chowk Square, which opened in 2017, was the largest Zara store in India and the only standalone one in Mumbai. A closure notice at the entrance confirmed that the store shut down on February 23, 2025.
High Rent Led to the Closure of Iconic Mumbai Store
Zara reportedly paid a massive monthly rent of Rs 2.25 crore, which translates to around Rs 7.5 lakh per day. The store was housed in the 110-year-old Ismail Building, a heritage property in the Fort area. Reports suggest that sales were not enough to cover the high rental costs, making the store financially unviable.
Zara entered India through a joint venture between its parent company, Inditex, and Tata Group’s Trent. The company leased the retail space in 2017 for an annual rent of Rs 30 crore with a five-year lock-in period. While the lease tenure was set for 21 years, the brand decided to exit due to unsustainable costs.
Who is the New Tenant?
Following Zara’s exit, luxury fashion retailer Purple Style Labs has leased the same space. The company, which owns Pernia’s Pop-Up Shop, has signed a five-year lease for an annual rent of Rs 36 crore. The rent will increase every year, reaching Rs 45.6 crore by the fifth year. The deal also required a hefty deposit of Rs 18 crore.
High Rent in Mumbai’s Retail Market
Zara’s closure has sparked discussions on Mumbai’s expensive real estate. Social media users criticized the high rental costs, calling the city’s real estate market unsustainable. Some compared Zara’s fate to the Swedish brand IKEA, which is also struggling with slow growth in India.
Despite shutting this store, Zara continues to operate in India with 23 stores across 12 cities. Customers can still shop at other Zara outlets in Mumbai or through its online store.
Zara’s exit highlights the challenges faced by global brands in India’s high-cost retail spaces. As rental prices soar, businesses must carefully assess their profitability before committing to expensive locations.
