None of the fashion brands have been able to escape the wrath of the coronavirus. Zara, known to be one of the fashion stalwarts, too is falling prey to the pandemic.
After posting a disappointing 44 per cent slump in its first quarter turnover earlier this week, the retail group has made yet another startling announcement.
Inditex has said it will be closing down nearly 1,200 stores across the globe by the end of 2021. That would mean a little over 500 stores each year.
Reportedly, around 100 stores in North and South America are first in the line to get closed.
The e-commerce business has been good for the company this quarter – in fact with a whopping rise of 95 per cent in April it is extraordinary.
And therefore the company believes that going forward the plan should be to focus on building a higher quality network of better located stores that in harmony with its digital section can help the firm generate long-term yearly like-for-like sales increase of 4 per cent to 6 per cent.
In order to have that exceptional quality network of better located stores, Inditex will have to take hard decisions – the announcement of shutting 1,200 stores in 2 years could be a step in that direction.
Inditex has over 7,000 stores in 93 markets across the globe and owns chains such as Zara Home, Massimo Dutti, Pull and Bear and Bershka, among others. It generates revenue of €23.311 billion.
