Inditex, the company that owns fashion-giant Zara, is set to close up to 1,200 stores worldwide in a bit to boost online sales amid COVID-19 disruptions to the economy.
The group said it would “absorb” between 1,000 and 1,200 of its smaller stores, while losses would be concentrated among older shops from its non-Zara brands, such as Bershka, Pull & Bear and Massimo Dutti.
The Guardian reports that closures are expected to be concentrated in Asia and Europe. The group’s UK stores are reportedly less likely to be impacted by store closures.
For Inditex, its store count will drop from 7,412 to between 6,700-6,900 after a reorganisation, which will also see the opening of 450 new shops.
Inditex is well-known as one of the world’s largest clothing retailers. It reported a drop in sales of around 44 per cent to €3.3 billion between 1st February and 30th April, the first quarter of the year.
During this period, company reported a net loss of €409 million and almost a quarter of its shops remained closed by 8th June.
Inditex noted however that online sales made up for some part of the sales weaknesses, and online sales rose by 50 per cent year-on-year.
Its new plan will see sales account for 25 per cent of total sales by 2022, compared with 14 per cent in 2019. It also plans to spend €1 billion on its online offering by 2022, and a further €1.7 billion in stores to provide tools to integrate better with websites for faster deliveries.