Gap closes in on the $100 Million Stake Holder Zara

September 9, 2015 written by

Gap, a recent entry into the Indian apparel market, out bounds other retailers with a profit of 23 lakhs per day in the first month of its functioning in its south Delhi store. However, it has yet to precede Zara Fashion – the first apparel brand in India to cross $100-million sales mark – that holds a store in the same location in Delhi. The Spanish fashion brand Zara brand owner Inditex and Tata Group’s retail arm Trent first stepped in Indian market five years ago. The team posted 24% annual growth in sales for the year ended March 2015 at Rs 721 crore ($114 million). And off late, it marked a phenomenal profit of 9 crore in the month of June from its store in south Delhi’s Select City Walk Mall.

On other hand, the American clothing brand Gap came down to India in May 2015, in partnership with Arvind Lifestyle Brands. Gap sold goods worth about Rs 7 Crore in June from its 9,500 sq ft store, translating into Rs 242 per sq ft per day, mentioned two executives from Gap India. Zara’s sales amount to Rs 180 per sq ft per day at its 16,500 sq ft first store in the country that it opened in the mall five years ago. J. Suresh, managing director of Arvind Lifestyle Brands said “The response has been better than what we had anticipated and it was spread across men, women and kids’ merchandise. We, however, cannot divulge sales details as it is too early,”  Gap along with Arvind Brands plans to open more than 40 Gap stores in India over the next few years.

Gap had earlier said that it was targeting Rs 500 crore of annual sales in three years, with Rs 60 crore from just the maiden store in Delhi in its first year. Experts said while initial sales of Gap were substantially high by industry standards, the company’s per store sales might drop once it opens new stores in not so prime locations and the novelty factor wears off. Where as “Zara has set a benchmark in terms of both growth and profitability. What has helped it is the brand’s desirability and connect with consumers,” said Devangshu Dutta, chief executive at retail consultancy Third Eyesight.


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