Zara owner Inditex said that they will be closing up to 1,200 smaller stores by 2021 and will instead focus on its bigger stores and online sales. The announcement came in after the Spanish company faced its first loss due to closing down of the stores because of the ongoing coronavirus pandemic.
The closures are expected to be concentrated in Asia and Europe, and affect mainly smaller stores and Inditex brands other than Zara, such as Pull&Bear, Oysho and Stradivarius, the Spanish company said on Wednesday. The company said it expects online sales to account for a quarter of its business by 2022, up from 14 per cent in 2019. Online sales saw a growth of 95 per cent during the global lockdown in April.
The total store count will fall from 7,412 to between 6,700 and 6,900 after the reorganisation, which will also include the opening of 450 new shops. It faced a net loss of 409 million euros for February through April compared to a net profit of 734 million euros for the same period last year. This is after sales dropped to 3.3 billion euros, down from 5.9 billion euros a year ago.