Zara’s Strategic Investment in Bengal: A Fashionable Boost to the State’s Economy

In a significant development, the renowned Spanish fashion brand, Zara, is likely to establish a production base and bring investment in Bengal. Chief Minister Mamata Banerjee held a meeting with the top executives of Zara’s parent company, Tempe Grupo Inditex, in Madrid, Spain, on Thursday. Banerjee announced that the state government is prepared to allocate 100 acres of land to facilitate the establishment of Zara’s production hub which will boost investment in Bengal.

In a Twitter message posted on Thursday, the Chief Minister shared the exciting news, “A thrilling development is on the horizon! Tempe Grupo Inditex (Zara), a prominent player in the textile industry, is expanding its operations. They are collaborating with private entities to relocate manufacturing to West Bengal, with production slated to commence before Christmas 2023.

This aligns with the vision they conceived during the Bengal Global Business Summit in 2019, particularly in the ‘Downstream Polymer and Plastic Industry’ segment. To facilitate this monumental project, they are in discussions to provide Tempe and its partners approximately 100 acres of concessional land in a suitable location, with full government support, for the establishment of a PU factory. This investment in Bengal holds the promise of growth, sustainability, and a prosperous future for West Bengal.

ZARA, a Spanish multinational retail clothing chain renowned for its fast fashion, offers a wide range of clothing, accessories, footwear, beauty products, and perfumes. The company’s headquarters are located in Arteixo, A Coruna, Galicia. Zara stands as the flagship company within the Inditex group and, since 2020, has been introducing more than twenty new product lines each year.

During the meeting, the Chief Minister appealed to Zara’s top executives to consider setting up a manufacturing unit in the state to boost the investment in Bengal. She remarked, “It is an immensely popular brand in our country, especially among the younger generations, particularly women”. she believe establishing a manufacturing unit in Bengal would be a strategic move which will not only benefit the company but also helps to bring investment in Bengal.

Zara, recognized as one of the world’s largest fashion brands, made its debut in the Indian market in 2010. In the fiscal year 2022-23, the brand witnessed a remarkable 40% increase in sales in India, as young consumers increasingly embraced Western-style fashion. The operations of Zara stores in India are managed through a joint venture with Inditex Trent Retail India (ITRIPL), which operates 20 Zara stores in the country. According, to Trent’s annual report, Inditex Trent’s revenue surged to Rs 2,562.5 crore in the last fiscal year, while ITRIPL’s net profit saw a remarkable 77% increase, reaching Rs 264 crore during FY23.

Amancio Ortega established Zara in 1975, opening his first store in central A Coruna, Galicia, Spain, where the company’s headquarters are still located. Initially named “Zorba” after the classic 1964 film ‘Zorba the Greek,’ Ortega later changed it to “Zara” after discovering a nearby bar with the same name. Zara gained popularity for offering affordable versions of high-end fashion trends. In the 1980s, Ortega revolutionized the design, manufacturing, and distribution processes to reduce lead times and respond swiftly to emerging fashion trends, which he referred to as “instant fashions.” This transformation involved the utilization of information technology and collaboration among groups of designers, departing from the conventional approach of individual designers.

Via: Timesgroup