Zara Shuts Down its flagship store in South Mumbai’s historic Ismail Building, a location that has become synonymous with high-end retail in the city. Despite having signed a 21-year lease agreement in 2016, the brand’s decision to shut down this prominent outlet stems from its inability to sustain the escalating rental costs of this prime property.

The Zara store, which opened its doors in May 2017, occupied a sprawling 51,300 sq ft space and was one of the largest Zara outlets in India. The rent for this iconic space was pegged at a staggering ₹2.25 crore per month, amounting to ₹27 crore annually. Initially, the first five months of the lease were rent-free. However, after three years, the lease included a 5% annual rent escalation, pushing the brand’s annual rental commitment to nearly ₹36 crore—equivalent to ₹9.86 lakh per day. These soaring costs ultimately made it unviable for Zara to continue operations at the location, despite its strategic positioning at Flora Fountain.

Despite the building’s heritage status and its high-profile location, Zara struggled to maintain profitability in South Mumbai, where the demographics and shopping habits have shifted over time. Retail experts note that high-end consumers have moved towards areas like Lower Parel and Worli, which are now seen as more desirable shopping hubs. As a result, even though the South Mumbai location was once considered a coveted retail address, it no longer offered the foot traffic or consumer profile that Zara needed to thrive.

On February 23, a notice was posted at the Ismail Building store, officially announcing the closure and directing customers to other Zara locations across Mumbai. “Please be informed that this Zara store will cease operations after the end of business on 23rd February,” the notice read.

As Zara exits, luxury fashion house Purple Style Labs has moved in, taking over the 60,000 sq ft space with a five-year lease agreement. Purple Style Labs, founded in 2015 by Abhishek Agarwal, is known for incubating high-end designer brands, including Tarun Tahiliani, Falguni Shane Peacock, Amit Aggarwal, and Gaurav Gupta. The company acquired Pernia’s Pop-Up Shop in 2018 and has since been expanding its presence in the luxury fashion market.

The new lease for the Ismail Building space, as per registration documents, shows an annual rental commitment starting at ₹36 crore, with structured increases over the next five years. By the second year, the rent will rise to ₹39 crore, and by the fifth year, it will reach ₹45.6 crore. The rental agreement also included a hefty deposit of ₹18 crore, along with additional stamp duty and registration fees.

This high-profile transition from Zara to Purple Style Labs marks a significant shift in South Mumbai’s retail landscape, as luxury fashion continues to stake its claim in the area, even as fast-fashion brands like Zara find it increasingly difficult to maintain profitability in the face of rising rents.

As this shift unfolds, one thing remains clear: the retail scene in Mumbai is evolving, with high-end brands setting their sights on areas like Lower Parel and Worli, leaving South Mumbai’s historic landmarks to cater to the growing luxury market.