Zara stores to be closed?

12th June: Amid the worldwide pandemic, many retailers and businessmen are working on different strategies to meet the emerging requirements of the market.

According to Baaghi TV, the famous global clothing brand Zara has decided to change its business strategy and is working on increasing its online sales.

According to the Sunday Times, the owner of Zara will close as many as 1,200 stores around the world as the clothing retailer tries to boost online sales during the chaos wrought by the COVID-19 pandemic.

Inditex said it would “absorb” between 1,000 and 1,200 mainly smaller stores, with losses concentrated among older shops from brands other than Zara. The Spanish company’s other brands include Bershka, Pull & Bear, and Massimo Dutti.

Inditex, the biggest fashion group in the world, operates over 7,200 stores in 93 markets worldwide. The company’s flagship store is Zara, but it also owns the chains Zara Home, Massimo Dutti, Bershka, Oysho, Pull and Bear, Stradivarius, and Uterqüe.

The closure of many of their outlets is expected in mainly Asia and Europe. It is understood that the 107 Inditex stores in the UK are less likely to be significantly affected.

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The total store count will fall from 7,412 to between 6,700 and 6,900 after the reorganization, which will also include the opening of 450 new shops.

Inditex has been hit hard during the pandemic, with sales down 44% to €3.3bn (£2.9bn) between 1 February and 30 April, the first quarter of its financial year.

The company reported a net loss of €409m during the quarter. Almost a quarter of its shops remained closed by 8 June.

However, online sales growth made up for some of the sales weakness, Inditex said. Online sales rose by 50% year-on-year during the quarter and were up 95% year-on-year in April.

Amancio Ortega, the founder of the Inditex, plans to spend €1bn on its online offering by 2022 and a further €1.7bn in stores to allow them to integrate better with websites for faster deliveries and real-time tracking of products.

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