Spanish fashion giant Zara has officially shut down its flagship store in South Mumbai’s historic Ismail Building at Flora Fountain. The five-storey store, spanning 51,300 square feet, was operational for nearly nine years before ceasing operations on February 23, 2025. The closure marks a significant shift in Mumbai’s premium retail landscape, making way for Indian luxury fashion chain Purple Style Labs (PSL), which has now leased the 60,000 sq. ft. space for an estimated ₹206 crore over five years.
Purple Style Labs, known for its premium designer collections under Pernia’s Pop-Up Shop brand, has taken over the space with an annual rent of ₹36 crore in the first year, rising to ₹45.6 crore by the fifth year. The deal translates to a daily rent of approximately ₹10 lakh. Industry experts suggest that Zara’s exit from South Mumbai was driven by shifting consumer demographics, unsustainable rental costs, and better-performing locations like Lower Parel’s Palladium Mall.
PSL, founded by Abhishek Agarwal in 2015, has rapidly expanded its footprint in India’s luxury fashion segment. By acquiring Pernia’s Pop-Up Shop in 2018 and Wendell Rodricks’ brand in 2020, PSL has positioned itself as a dominant player in the designer fashion retail industry. This move strengthens its presence in Mumbai, where it already operates stores in Kemps Corner, Juhu, and Bandra.
The transition signifies the evolving retail dynamics in Mumbai, with increasing demand for high-end luxury fashion. The shift from Zara to PSL underscores the changing preferences of premium shoppers and the growing prominence of Indian luxury fashion brands.
1. Purple Style Labs: A Rising Star in Luxury Fashion
1.1 Company Background
Purple Style Labs (PSL) was founded in 2015 by Abhishek Agarwal, a former investment banker with a vision to transform India’s luxury fashion market. The company started as a fashion-tech startup, helping young designers gain visibility and access to a larger audience.
1.2 Revenue and Business Model
PSL operates through a mix of online and offline retail channels. The brand generates revenue through:
- Retail Stores: Pernia’s Pop-Up Shop outlets in premium locations like Mumbai, Delhi, and Hyderabad.
- E-commerce: A robust online platform offering a curated collection of India’s top designers.
- Designer Incubation: PSL nurtures emerging designers by providing marketing, operational, and technical support.
1.3 Funding and Expansion
Since its inception, PSL has raised multiple rounds of funding from prominent investors. In 2018, it acquired Pernia’s Pop-Up Shop, expanding its luxury portfolio. The company further strengthened its presence by acquiring Wendell Rodricks’ brand in 2020.
2. Zara Mumbai: A Strategic Exit from South Mumbai
2.1 History of Zara in Mumbai
Zara, a brand under Inditex SA, entered the Indian market in 2010 through a joint venture with the Tata Group’s Trent. The Ismail Building store opened in 2016 on a 21-year lease, but the company decided to exit early, citing financial constraints.
2.2 Factors Behind the Closure
Several factors contributed to Zara’s decision to vacate its South Mumbai flagship:
- High Rental Costs: The store’s rent increased significantly over the years, reaching ₹36 crore annually.
- Shifting Demographics: Affluent shoppers have migrated towards central Mumbai areas like Worli and Lower Parel.
- Better Performing Locations: Zara continues to operate successfully in Palladium Mall, Phoenix Market City, and Viviana Mall.
3. The New Retail Lease: Purple Style Labs’ Bold Move
3.1 Financials of the Deal
- PSL’s five-year lease amounts to ₹206 crore.
- Initial annual rent: ₹36 crore (₹3 crore per month).
- Rent escalations: ₹45.6 crore by the fifth year.
- Security deposit: ₹18 crore.
3.2 What This Means for Mumbai’s Retail Landscape
- Reinforces Mumbai as a hub for homegrown luxury brands.
- Signals a shift towards experiential and designer-led retail.
- Positions PSL as a major player in high-end fashion retail.
4. Industry Insights and Trends
4.1 The Rise of Homegrown Luxury Brands
Indian brands like PSL are increasingly competing with global fashion houses, offering bespoke, high-quality designs that cater to the country’s evolving luxury consumer base.
4.2 The Changing Face of Mumbai Retail
- High-street fashion is making way for premium, experiential retail.
- Central Mumbai is emerging as the go-to shopping district.
5. Learning for Startups and Entrepreneurs
5.1 Key Takeaways
- Strategic Location Matters: Selecting a store location based on consumer demographics is crucial for retail success.
- Sustainable Rental Agreements: High rent can impact profitability, making cost-benefit analysis essential before leasing prime retail space.
- Diversification is Key: Zara’s ability to shift focus to better-performing locations highlights the importance of flexibility in business strategy.
- Luxury Fashion is Evolving: Indian luxury brands are thriving, offering opportunities for new entrepreneurs in the sector.
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