ZARA India Q4 FY25 Earnings Results Out: Company Reports 23% Profit Growth

Global fashion giant ZARA has reported flat sales in India for the FY2025. While its revenue from operations remained stable at ₹2,782.06 crore, its profit saw a significant jump of nearly 23% to ₹299.47 crore. This information comes from the latest annual report of Trent Ltd, a part of the Tata Group.   

Understanding the Joint Venture of ZARA  

ZARA's operations in India are managed by Inditex Trent Retail India Private Ltd (ITRIPL), a joint venture between Spain's Inditex (the owner of ZARA) and Tata Group's retail arm, Trent Ltd. In the previous financial year (FY'24), ITRIPL had reported revenue of ₹2,768.90 crore and a profit of ₹243.84 crore, showing a slight increase in revenue but a strong surge in profit for FY'25.  

Store Presence and Income Growth  

ZARA, a key player in India's competitive fashion market alongside brands like H&M and UNIQLO, currently operates 22 stores across 13 cities. Interestingly, a year prior, the brand had 23 stores in 12 cities, indicating a slight reduction in store count but an expansion into more cities. The total income for ITRIPL, which includes other sources, also saw a modest increase of 2.26% to ₹2,839.50 crore for FY'25.  

Trent Reduces Stake in ZARA and Massimo Dutti JVs  

A notable development in FY'25 was Trent's decision to offload a portion of its stake in ITRIPL. Following a buyback offer from ITRIPL, Trent's shareholding in the ZARA joint venture was reduced from 49% to 34.94% effective August 30, 2024. 

Trent has a similar joint venture with Inditex for the luxury fashion brand Massimo Dutti, operating under Massimo Dutti India Pvt Ltd (MDIPL). MDIPL runs three stores in India. Its revenue for FY'25 saw a marginal dip of 0.7% to ₹100.37 crore, down from ₹101.09 crore in FY'24. Mirroring the ZARA stake reduction, Trent also sold 29% of its shares in MDIPL in March 2025, bringing its ownership down to 20%.  

Dependence on Inditex  

It's important to note that both ITRIPL and MDIPL primarily focus on distributing ZARA and Massimo Dutti products in India. They are required to source all merchandise exclusively from the Inditex Group. Furthermore, the choice of products and their specifications are entirely at Inditex's discretion, and the Indian entities rely on Inditex for permission to use these brands in India.  

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Conclusion  

While ZARA's sales in India have remained stagnant, the brand has managed to significantly boost its profitability. The strategic move by Trent to reduce its stake in both the ZARA and Massimo Dutti joint ventures suggests a potential shift in its investment focus, even as the Inditex-controlled entities continue to facilitate the distribution of their global fashion brands in the Indian market. 
 
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