Zara's Owner Plans to Close Up to 1,200 Stores While Shifting to E-Commerce

Gene Naumovsky

Inditex shifts its focus to a brand new e-commerce platform while letting thousands of stores go.

The parent company of Zara, Massino Dutti, and other brands, Inditex plans on closing between 1,000 to 1,200 stores throughout the next two years, according to Business Insider.

Inditex announced the plans on Wednesday, following their first-quarter earnings report. As the Spanish “fast-fashion” leader transitions towards e-commerce, Inditex is investing $1 billion into its own e-commerce platform. Online sales are expected to compose a quarter of 2022 operations, according to Inditex. In addition, the company has set aside $1.7 billion for “deploying advanced technology solutions” in an effort to merge stores with its e-commerce platform.

In a statement, CEO Pablo Isla said, “The overriding goal between now and 2022 is to speed up full implementation of our integrated store concept, driven by the notion of being able to offer our customers uninterrupted service no matter where they find themselves, on any device and at any time of the day.”

With around 7,500 stores worldwide, Inidtex saw only 965 of those remain open during the pandemic-induced lockdowns. Yet, online sales saw a 95 percent increase, and the first quarter posted 50 percent gains for e-commerce.

Managing director of GlobalData Retail, Neil Saunders said, “Online sales are likely to remain more highly penetrated than they were before and this is something brands will need to assess.” He added, “The losers will be those retailers that are less adept in multichannel and which have large store estates which are increasingly irrelevant.”

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