Zara India has reported an increase of 73% in its FY18 profits

Market watchers have reported that international brands like Zara and H&M are now at the tip of the iceberg of the enormous Indian fashion apparel market. The Indian apparel and clothing industry is at about ₹4 lakh crore and constantly growing at 12% YoY out of which about one third is for branded apparels, growing 15% annually.

Zara India saw an increase of over 70% in its profits to ₹82.59 crore in Fiscal Year 2018. The surge is a result of strong sales and lower prices which helped the company obtain new customers. The brand is owned by Inditex and Trent – Tata Group’s retail arm, who run the Zara stores in India. According to an annual report by Trent, the brand in India reported an increase of 19.4% in their net sales to ₹1,221.67 crore from ₹1,023 crore last year.

As Zara showed 73% growth in its net profits, the overall profits of Inditex posted a net loss of ₹2.73 crore. The company’s other brand, the bridge-to-luxury label Massimo Dutti didn’t do as well as Zara which made the overall profits suffer in the country. The Zara stores in India are planning to expand steadily over the next 4 years in Tier 1 cities. The company reports stated that availability of high quality retail spaces is the primary challenge they might face. These spaces can be expected to generate reasonable sales turnover, the report added. 20 stores are operated by the joint venture for Zara in India. These cities are Delhi (NCR), Bengaluru, Chennai, Mumbai, Hyderabad, Pune, Jaipur, Surat, Chandigarh and Mohali. On the other hand, Massimo Dutti’s joint venture runs three stores in Mumbai and Delhi, which recorded over-all revenues of Rs 45.75 crore.

Zara has continued to be a successful brand in India since its beginning in 2010. The brand has been running strong in spite of strong competition from other international rivals like the Swedish company Hennes and Mauritz (H&M). the brand H&M has been expanding aggressively by opening one store per month since its entry in the Indian market in 2015. The brand currently has a total of 32 outlets as in May 2018.

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