Spanish fashion apparel retailer, ‘Zara’ has leased 30,000 square foot retail space at Oberoi Mall in Mumbai. This is Zara’s largest store in the country.
The retailer will pay 9.5 per cent of sales or a minimum rent of Rs.100 per sq.ft per month on carpet area, whichever is higher. In addition, it is also bearing an additional Rs.26 per sq.ft per month toward heating, ventilation and air-conditioning.
This is the highest revenue share offered by any fashion retailer for an anchor position in a mall. Typically, global retailers pay eight to nine percent of sales as rent.
The company has a joint venture with the Tata-owned Trent for Indian stores. It has 19 stores in the country and does about Rs.2,500 per sq.ft per month on an average across its stores. In most malls, either it’s steady or growing. Zara is posting a 20 to 30 per cent like-for-like growth, considered robust in fashion retailing.
Zara’s bargaining power and appetite for more store space can be judged from the fact that it has been able to secure the right of first refusal over any space that gets vacated adjacent to its store in future.
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