Fast fashion retailer Zara is closing several stores, making the retailer the latest in a long line of brands and designers whose business has been thwarted by the worldwide COVID-19 pandemic. In a statement published by the brand, Inditex (Zara’s parent company) announced that they would be shuttering between 1000 and 2000 stores over the next two years due to reduced sales. Instead, they’ll concentrate more of their resources on e-commerce and online sale strategies.
While Inditex was not specific about which Zara stores it would be closing, they shared, “The plan includes 500-600 units each year. The optimization plan focuses on stores at the end of their useful life, especially young concepts whose sales can be recovered in nearby stores and online.”
They plan to re-allocate funds to support their online platform, adding in a report on their website that they would be infusing that part of their business with €1 billion for “bolstering the online business” and an additional €1.7 billion for “upgrading the integrated store platform, deploying advanced technology solutions.”
All of this change is due to a €460 million loss reported by the company between February and April, aided in a large part by the forced shutdowns due to quarantine requirements during the coronavirus outbreak.
As stores around the world are only just beginning to re-open, only time will tell which Zara storefronts will be among that group and which will remain shuttered. But one thing’s for sure, the COVID-19 shutdowns have truly changed the face of retail forever.
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