Zara closes 1,200 stores worldwide and focuses on online


After the collapse of post coronavirus sales, the Spanish clothing giant Inditex is aiming for an acceleration in online sales, which increased by 50% in the first quarter of this year
Once again it is the fault of the pandemic, other shutters lowered: this time there are 1200 clothing stores of the Zara brand. The Spanish Inditex, which also owns the brands Bershka, Pull & Bear and Massimo Dutti, will mainly absorb the smaller stores distributed both in Europe and Asia. During the coronavirus emergency in the first quarter, sales dropped 44% with a red of 409 million euros. But the sales of clothes and accessories on the web platform of the Spanish brand went very well.

Web sales success

Zara thus wants to focus on boosting online sales: while in the stores sales have fallen by 44% to 3.3 billion euros, online sales have in fact increased by 50% in the first quarter and in April they have jumped by 95%. According to analysts, the impact of the coronavirus on the group was severe but “temporary” and therefore an investment in e-commerce can help to recover the lost turnover with “traditional” sales in stores.

2.5 billion investments

The Spanish clothing group Inditex has already invested 2.5 billion euros to strengthen the online platform and said it will unlock another 2.7 billion investments, of which 1 billion to enhance e-commerce. Inditex predicts that online sales will represent 25% of its turnover in 2022 compared to 14% in 2019. Another 1.7 billion euros will be invested in shops, which will become mainly distribution centers and will serve to dispose of warehouse and for the withdrawal of online purchases.

Progressive recovery of sales

For 2020, President Pablo Isla predicts “a progressive recovery in sales”. In this way Inditex should be able to better cope with the reduced influx of public in the stores after the reopenings, unavoidable with the mandatory use of the masks, the confined entrance into the shops and the obligation of the safety distance between customers.

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