The store has opened in London’s Covent Garden, next door to a traditional Zara shop. It was previously an accessories and apparel shop and has its own entrance and fascia.

Childrenswear is a lucrative market for retailers such as Gap, H&M, Next and Marks & Spencer, and is one of the more recession-proof sectors, because parents stop spending money on themselves before their children.

The market has also opened up further following the collapse of Woolworths, which had a large share through its Ladybird brand. Problems at Adams, which fell into administration and closed 147 shops before being rescued by its former owner, have also had a bearing on the market.

Research firm Verdict estimated the clothing sector as a whole will contract by 1.4 per cent this year, but that childrenswear will only fall 0.7 per cent, to be worth £4.6bn.

A Zara spokeswoman would not comment on possible roll-out plans. The retailer has around 200 Zara Kids stores globally, mostly in Spain, and sells childrenswear in many of its larger Zara shops.

Verdict senior retail analyst Maureen Hinton said the UK launch could be a shrewd move. “Zara Kids has been fairly low key – often downstairs in stores and not displayed in windows.” She added it could pose a threat to other mid-market players. “There is the possibility of taking share from Next, M&S and Gap. It is an attractive offer,” she said.

Bernstein senior research analyst Luca Solca said there is room for Zara to build its market share. He said: “The market is still fragmented and Inditex can certainly gain share. On the back of its Zara stores there could be an opportunity to make more of kidswear.” He estimated that Zara’s childrenswear offer generated sales of between €225m and €250m (£202.2m and £224.7m) in the year to January.

Kaati Café aims to bring both traditional and previously unseen Indian cuisine to City workers. Its format will focus mostly on take-away food but will include a small seating area.

Kaati Café has taken a new 15-year lease on the 800 sq ft unit at 123 Houndsditch, London EC3, CBRE’s newly refurbished building close to Aldgate tube station, Lloyds of London and Broadgate. It will be paying an initial rent of £36,000 per annum, subject to stepped increases of £2,500 per annum for the first five years and then five-yearly upward-only rent reviews thereafter, with a three-month rent-free period.

Oliver Green, Surveyor in King Sturge’s retail team, says: “Kaati Café will use the strategically located Houndsditch unit to test the water for its new format with a view to rolling out the brand once it is established.”