Inditex will close its stores and shift its focus to online shopping
Inditex Group, the parent company of Spanish clothing brand ZARA, plans its business strategy in the post-epidemic era and announced that it will permanently close up to 1,200 of its stores around the world, accounting for approximately 16% of the group’s total stores, and will More actively shift its focus to the online shopping market.
Inditex store closures will be carried out this year and next, mainly affecting stores in Asia and Europe. In the Americas, a total of 100 ZARA, Massimo Dutti, and Pull & Bear stores were affected, and these store closures accounted for approximately 5-6% of the group’s total revenue.
Inditex stated that the store closure plan targets small stores and stores where business can be transferred to neighboring stores or online stores. Inditex expects that the profits lost from this wave of store closures will eventually be recouped.
According to the Wall Street Journal, after the COVID-19 epidemic has slowed down, many major economic countries have begun to resume business activities. Global retailers such as Inditex can’t wait to reopen their stores, looking forward to seeing Customer flow is back to what it used to be. However, many well-known department store chains and fast fashion operators have found that the epidemic has only made the impact of the online shopping boom on store performance for many years more serious.
Inditex, which is controlled by the family, saw sales drop 44% year-on-year to 3.3 billion euros in the first quarter of this year, which was worse than analysts’ expectations and saw a profit of 7% in the same period last year. 36 million euros turned into a loss of 409 million euros.
Inditex also announced that it will invest 1 billion euros in digitalization in the next three years. This includes the group’s ongoing larger-scale strategy to strengthen online sales performance. And focus on a smaller number of stores with strong performance.
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