Inditex, which owns fashion and clothing brand Zara, is looking to launch its home furnishings line — Zara Home — in India, three people familiar with the development said. Zara Home specialises in home fabrics, whether for the bedroom or kitchen. It delivered the highest growth among all Inditex brands (including Zara, Massimo Dutti, and a fashion accessories and jewellery chain) in 2014, with a 21% rise in value sales, according to a Bloomberg report. The same article stated that since 2009, Zara Home sales have doubled.
One of the world’s biggest fashion retailers, Spain’s Inditex denied such a plan was in the works, saying it continues to explore commercial opportunities but that “in this moment, Inditex has no plan to open Zara Home stores in India”. It was not immediately clear if Zara Home will be a part of the existing joint venture between Inditex and Tata Trent.
However, FE has learnt that the company will opt for brick-and-mortar stores to promote Zara Home in India, a strategy different from that followed in other countries. For example, in the US, Norway and Switzerland, Zara Home merchandise is only sold online. In India, Inditex is understood to have planned for stores in smaller formats than those that sell clothing and accessories.
Zara Home stores will scout for stores of 5,000 and 8,000 sq ft, sources added. “In many cases, Zara has already started to move to larger spaces like in Ambience Mall and as we know, negotiations are on at Palladium. It will first want to integrate the home and clothing lines but it is open to looking for a few exclusive home stores as well,” one person said on condition of anonymity.
Zara commenced operations in India back in 2009 and being the anchor tenant in several malls has stores that are typically between 17,000 and 20,000 sq ft in size.
In 2015, Inditex ramped up the worldwide expansion of Zara Home, entering new markets such as Algeria and Australia. “Zara Home has been a big hit for Inditex globally and in India, it will find particular interest because of the demographic composition, wherein there will be very robust demand from people who are moving into their first home,” said Arvind Singhal, managing director at Technopak, a retail management consulting firm.
What will most certainly bode well for Zara Home is also that in the home furnishing segment, there is virtually no competition except a domestic player, and the brand will be able to leverage on the first-mover advantage, Singhal added.
Industry sources indicated Zara Home is expected to launch in India towards the end of 2016. Given the influx of international brands into top-performing malls, timelines for store openings are often getting stretched. “These brands have the option of maybe half a dozen malls, which are performing well. The problem is that they are also fully occupied so developers constantly have to relocate or vacate existing brands, which takes a lot of time,” said Pankaj Renjhen, managing director of retail services, JLL India. Swedish brand H&M (Hennes and Mauritz), Japan’s Uniqlo, British brand, Topshop and Inditex-owned Massimo Dutti are among the major international players looking to open stores in the country. As far as Inditex is concerned, the company is learnt to be in advanced stages to sign real estate deals for Massimo Dutti, a brand that is anticipated to compete with GAP and H&M.