How is Zara building a fortune?
Hey,
I was in Mumbai last month for some work. Also in Mumbai, were 2 of my friends who stay in Bilaspur [a city in Chhattisgarh]. They’d come to Mumbai for shopping… and one of their go-to-place was Zara.
Now these are folks with whom I’ve spent the maximum amount of time during my Masters’ from BSE and I know for a fact that they love shopping, and Zara’s store at Fort, Mumbai [in picture below] which was just 5 mins from our college was like a temple for these folks - which they visited religiously at least once a month. And in the name of ‘chadhava’, paid a few grands in bills.
So, goes without saying, when we met last month, these guys wanted to visit Zara and shop for casual clothes, as Zara has no stores in their city. We went to its flagship store at Phoenix Palladium and figured that it’s under renovation, so we went back to our old temple, at Fort. Took an hour-long of shopping session, only to wait another 30-mins at the billing counter queue.
Cut to today - Zara’s store at Phoenix Palladium just opened its doors post-renovation, 2 days ago, and at the same time, the company is in news for its remarkable performance.
I, for one, am not a huge fan of the brand. Although I love its perfumes, I hate the apparels they have - maybe I don’t understand fashion, or maybe I’m too rational to not spend Rs 3k on a pair of jeans which is 80% ripped.
But that does not stop me from studying the business model they have in place & the numbers this industry topper is clocking!
Zara (India) is redefining success in the fashion retail industry with its stellar performance! 📊
According to Trent Ltd.'s latest annual report, Zara India has achieved an impressive 40.4% revenue growth, reaching a remarkable Rs 2,562 crore. 💰
But that's not all—Zara's profit has skyrocketed by an incredible 77.6% to Rs 264 crore, demonstrating their unwavering dominance in the market.
Inditex Trent Retail India Private Ltd (ITRIPL aka Trent), the joint venture responsible for Zara's operations in India, has reported a phenomenal total income of Rs 1,824.82 crore and a profit of Rs 148.69 crore for the financial year ending on March 31, 2023.
Zara has 21 stores in India, across 11 cities.
What works?
📌 Adaptability:
From its strategic market entry approach to its ability to adapt to local preferences, Zara has showcased its unparalleled understanding of the Indian consumer.
📌 Niche Branding:
Zara caters to the young - from selling ripped jeans for their weekend plans, to business formals, to those IG famous 'airport outfits,' Zara India has captured what we have in abundance - the youth.
📌 Supply Chain:
Their efficient supply chain and inventory management practices have allowed them to stay ahead of the curve, responding swiftly to changing fashion trends.
📌 Store Experience:
The enticing in-store experience offered by Zara, coupled with its focus on customer service and innovative technologies, has fostered strong customer loyalty. This, in turn, has contributed to their remarkable growth and consistent profitability.
Their extraordinary revenue growth and substantial profit increase are a testament to their exceptional business acumen and commitment to delivering fashion-forward offerings to Indian consumers.
PS: In picture, the 4-storeyed Zara store at Fort, Mumbai - I used to pass by this daily when commuting to college / back home, during my 2 yrs of Masters; a time when I was just studying how to study businesses... and look where we are today! Miles to go!Disclaimer: This post is for educational purposes only & I am not a SEBI regd. financial advisor. Investing involves risks and kindly do your own research before taking investment/trading decisions. This blog post should not be considered as a financial advice.
Feel free to reach out to me for any queries, suggestions, or just a quick chat!
Till then, stay safe, stay invested!
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