Zara owner, Inditex decided to close up to 1,200 smaller stores by 2021 and will instead focus on its bigger stores and online sales.
One of the world’s largest clothing retailers – which also owns other fashion brands such as Massimo Dutti, Pull & Bear and Bershka – announced its loss after the Covid-19 crisis forced most of the outlets to suspend operations.
Inditex booked a net loss of €409 million (US$465 million) in the February to April first quarter, after sales tumbled to €3.3 billion from €5.9 billion in the same period a year earlier.
Their upcoming plan is to focus on bigger stores would expand shop floor space by about 2.5% a year in 2020 to 2022.
Online sales surged 95% during lockdown in April. Thus, The company also unveiled a €2.7 billion plan to upgrade technology at stores and to drive its online sales so that they made up a quarter of sales by 2022, compared to 14% for now.
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. Closures are expected to be concentrated in Asia and Europe.