Zara Shuts Down South Mumbai Store Due to Exorbitant ₹3 Crore Monthly Rent
Spanish fashion giant Zara has closed its iconic SoBo store in South Mumbai after eight years, citing the exorbitant ₹3 crore monthly rent as a significant factor. The decision has sparked debate on the high real estate prices in Mumbai.
ZaraMumbaiReal EstateRetailSoboReal Estate MumbaiFeb 25, 2025
A notice posted in front of the store went viral on social media, highlighting the brand's struggle with the high rental costs in the city.
The clothing company was reportedly paying ₹3 crore in monthly rent.
According to Business Standard, Zara leased the property for 21 years in 2016 for a monthly payment of ₹2.25 crore.
The rent for the initial five months was free, but upon completing the first three years of the 21-year tenure, the rent increased by 5% per annum.
Calculations put the ongoing rent at ₹3,01,52,152 per month or ₹36,18,25,823 per annum.
The notice outside the Zara store read, “Please be informed that this Zara store will cease operations after the end of business on February 23.
We will continue to assist you at all our Zara stores in Mumbai.” This announcement left social media users in disbelief and sparked a range of reactions.
One individual posted, “Are you kidding me?” Another user commented, “This will be the fate of many quick commerce dark stores after a while.
Even though located in a corner, Mumbai rentals are crazy.” A third commenter added, “As per my understanding, locations like these aren't for making store-level profits; it's more about brand placement.” A fourth user expressed, “Don’t blame the Mumbai real estate.
Blame the companies who agree to pay such ridiculous amounts.” Another wrote, “The place was iconic.
Totally worth it.
Whenever I went, it was full.
Rent wasn't a problem in that location.”
The iconic space will soon house Pernia’s Pop-Up Shop.
The new occupant reportedly wanted a 15-year lease tenure, but the agreement is likely to be in multiples of five years.
This transition reflects the dynamic nature of retail in Mumbai and the challenges faced by brands in maintaining high-street presence amidst soaring real estate costs.
The closure of Zara’s SoBo store is a significant event in Mumbai’s retail landscape, highlighting the ongoing struggle between high rental costs and the profitability of physical stores in prime locations.
As the retail industry continues to evolve, it remains to be seen how other brands will navigate these challenges in the future.
Frequently Asked Questions
Why did Zara close its SoBo store in South Mumbai?
Zara closed its SoBo store in South Mumbai due to the exorbitant ₹3 crore monthly rent, which the store's sales could not sustain.
How long was Zara paying this high rent?
Zara was paying the high rent for about eight years, with the lease agreement starting in 2016.
What was the reaction on social media to the store's closure?
Social media reactions were mixed, with some users expressing disbelief at the high rent, while others commented on the brand's iconic status and the challenges of high real estate prices in Mumbai.
What will happen to the space now?
The space will soon be occupied by Pernia’s Pop-Up Shop, a new retail venture in the area.
How does this closure affect the retail industry in Mumbai?
The closure of Zara's SoBo store highlights the challenges of high real estate costs in Mumbai and the need for brands to find sustainable business models in prime locations.
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