Photo by Shamina Rivindra

As we reported in December, 2008, when fast-fashion retailer Zara opened a 12,000 multi-level store at the prestigious address of 500 Fifth Avenue in Manhattan, the retailer was proving that there are market opportunities if you know how to mix your merchandise and you know where to open. In December, unlike other fast-fashion retailers such as H&M and Uniqlo, Zara pushed the limits on premium prices. You wouldn’t find a $1,099 mink-leather coat at Uniqlo, nor would you find tailored menswear at H&M, but Zara, owned by Inditex, which ranks quite high in our Spain Youth Culture Study, is going for a new strategy not only in America, but now the rumored new hotspot for fashion retail, India.

On February 5th, Inditex, which also owns Massimo Dutti, Bershka, and Pull and Bear, will enter into a joint venture with Trend Limited, a Tata Group company, which is one of the largest in India and owns information systems, chemical companies, communication, and other businesses, and will open Zara stores in New Delhi and Mumbai as well as other key cities starting in 2010.

According to Noel N. Tata, the managing director of Trend Limited, “We see great opportunities for Zara in a country which is becoming increasingly fashion conscious. Zara has proven itself capable of quickly adapting to changing consumer tastes across geographies. This association with brand Zara is our endeavor to bring a world class brand and experience to fashion conscious Indians.”

News of Zara moving into India coincides with many financial reports stating that relatively safe-haven countries to the global recession are those with somewhat closed economies, and India is often ranked as the #1 location. Similar to China, they have a growing middle class and are experiencing extremely fast reforms in internet technology, fashion, and entertainment, making it a strong new market for brands seeking another customer base.

As we reported last week on H&M, the other strong fast-fashion retailer from Europe, they too are expanding in a time of economic crisis, opening a store in Beijing this spring and Moscow and St. Petersburg in 2010.

What’s interesting is that while many high-end stores are known for top prices across the board (even in their sales area), it’s not often that you’ll find a retailer that offers stylish apparel with a quick inventory turnover ranging from $10 to $1,100 in the same space. Zara’s tactic of taking hi-lo fashion and pricing to new levels has given other retailers something to think about.

Overall, it’s interesting to see the various strategies that fast-fashion retailers are doing in America, India, China, and Russia given the global economic downturn, and how generally, such stores are not doing as badly as many other retailers. Zara’s bold moves certainly adds new character to the original thinking that fast-fashion retailers have been known for in the last few years and sets a new standard for retail in general.

For more information about Zara, Massimo Dutti, Bershka, and Pull and Bear from Label Networks’ European Youth Culture Studies and Premium Subscription, email; (323) 630-4000.