Inditex, the Spain-based biggest fashion group in the world and owner of Zara brand, faced a loss of Rs. 41 crore in India for FY21. Its revenue also declined by 28.3 per cent to Rs. 1,126 crore in this fiscal.
In FY20, the fashion giant had reported a profit after tax of Rs. 104.05 crore and revenue of Rs. 1,570.54 crore.
Zara has 21 stores in 11 Indian cities, with H&M and UNIQLO being its main competitors.
In India, Zara operates through the association of its parent company Inditex with the Tata group firm Trent Ltd. – Inditex Trent Retail India Private Limited (ITRIPL). Notably, the Inditex Group owns 51 per cent, while Trent has 49 per cent in ITRIPL.
The latest annual report of the Tata Group firm Trent Ltd. says, “The incremental store openings for Zara continue to be calibrated with focus on presence only in very high-quality retail spaces.”
Trent has two separate associations with Inditex – one to operate Zara stores and the other for Massimo Dutti stores in India. The entities essentially facilitate the distribution of Zara and Massimo Dutti products in India through their respective stores.
Meanwhile, Massimo Dutti, which operates three stores in India, also reported a 49.3 per cent decline in its revenue of Rs. 34 crore in FY21. It had recorded revenue of Rs. 67 crore in FY20.
As per Trent, the business of these entities is essentially limited to the distribution of Zara and Massimo Dutti products in India. Both the entities are required to source merchandise only from the Inditex Group and also the choice of product and related specifications are at the latter’s discretion.
