LOS ANGELES — Spanish fast-fashion chain Zara is heading west with a store slated to open at South Coast Plaza in Costa Mesa, Calif., by spring.
This story first appeared in the November 14, 2003 issue of WWD. Subscribe Today.
The 10,000-square-foot men’s and women’s unit at South Coast Plaza will bow in the Robinsons-May wing in a space formerly held by Bath & Body Works.
It has taken Zara, with nearly 600 stores in 44 countries including Mexico, 14 years since it arrived in the U.S. to enter the California market. Its first unit west of the Rockies is just around the corner, scheduled to bow the last week of November at the Fashion Show Mall in Las Vegas. That follows a unit unveiled in Washington’s Georgetown neighborhood two weeks ago.
“They have big plans for the West Coast,” said a source close to the South Coast Plaza deal, noting the chain is planning two doors in the Los Angeles area — one possibly at Third Street Promenade — and two doors in San Francisco. “They recognize it’s a proven market and similar in fashion tastes and climate to Spain.”
Moises Costas, managing director of Zara USA Inc., declined to confirm the scope of the company’s expansion plans, nor would he talk about sales expectations except to say, “We are sure that South Coast Plaza is a perfect spot for us.”
Analysts believe the unit’s sales projections could conservatively reach between $7 million and $8 million in the first year, based on the high-fashion, low-price buzz generated by the chain’s U.S. stores, which will total 12 by yearend.
A retail rollout in California could further diversify its retail portfolio, said analysts. Zara’s first-half 2003 revenues rose 14.2 percent to $1.57 billion, but average unit sales fell in the third quarter because of unseasonably warm weather in Europe, which has the highest concentration of stores.
Adrienne Tennant, an analyst with Wedbush Morgan Securities, said Zara’s presence on the West Coast could “hurt” established cheap-chic chains here, like Forever 21, as well as up the ante for Hennes & Mauritz, which has yet to tackle the West Coast market. “I think it could put pressure on H&M, which has had a very conservative rollout strategy in the past,” she said.
South Coast Plaza has become a magnet for retail firsts on the West Coast, thanks to average sales per square foot of between $700 and $800 and because space becomes available more frequently there than on Rodeo Drive, said retailers.
Roberto Cavalli will open his first West Coast retail unit in South Coast Plaza, his fifth U.S. store and 20th store worldwide, on Nov. 22, as reported.