Zara has no new stores in India but records over 60% growth

Fast fashion brand Zara is seeing good days in India despite not opening any new outlets. Its parent company, Spain-based Inditex in its report said Zara in 2022 made a net profit of Rs 148.76 crores and revenue of Rs 1,815 crore by March 31, 2022.

According to the latest annual report of Trent Ltd, Zara stores in India reported a net loss of Rs 41 crores in FY21. The revenue of the brand fell 28.3% to Rs 1,126 crores during the pandemic. The annual report of Tata group retail arm Trent said the Zara entity recorded revenues of Rs 1,815 crores during the year under review.

Zara is popular among Indian youth. It is frequently seen worn by fashion influencers and even film stars. It currently has 21 stores across 11 Indian cities. The brand hasn't opened any new stores in the last two years due to "a focus on presence only in high-quality retail spaces".

RBC analyst Richard Chamberlain had said in a research note that Inditex is set to benefit from competitive pricing even amid the supply chain issues because consumers like Zara's "rapid output of new fashion lines''.

He added that Zara is making a faster recovery from the pandemic than most similar brands even amid the supply chain issues caused by the Russia-Ukraine war. The experts think the brand is catering well to the consumers who are looking to replenish their wardrobes after being stuck in their homes for two years. A UBS research had noted Zara lifted its starting price by 10% or more since January. In April, the prices rose by an average of 18.5%.

Zara's closest rival H&M increased its average retail price by 4.2%. The Swedish brand said it will have to raise prices this year, but the hikes will be smaller than its competitors.