Zara Parent Company Store Closings 2020: Why The Retailer Is Closing Up To 1,200 Locations

The parent company of fashion retailer Zara is looking to close as many as 1,200 stores worldwide as it shifts its focus to online sales through its e-commerce sites.

Inditex, which also owns the brands Zara Home, Bershka, Pull & Bear, and Massimo Dutti, said it would be “absorbing between 1,000 and 1,200 smaller-sized stores.” The stores account for 5% to 6% of the company’s total sales, which Inditex said are “less well positioned to offer the new customer experiences."

Inditex has 7,412 stores in 96 markets and is looking to pare back its total brick-and-mortar portfolio to about 6,700 to 6,900 locations, which will also include opening 450 new stores that will integrate its new sales technology.

The store closures will affect about 100 locations in the U.S. under all the company’s brands, The Wall Street Journal reported. Intitex said the closings will also affect older stores that belong to brands other than Zara. Intitex has nearly 100 Zara stores across the states.

Intitex announced the store closings during its quarterly earnings report, where it said it is looking to have online sales make up more than 25% of its total sales by 2022 as it looks to invest about $1.3 billion into its online business by 2022 to help increase e-commerce sales.

Overall, the company saw sales decrease by 44% for Q1 2020 as 88% of its global stores were forced to close because of the coronavirus pandemic. During the COVID-19 crisis, Intitex saw online sales grow by 50% for the full quarter and 95% for the month of April.

“Our priority through the crisis has been and continues to be the health and safety of our people and our customers,” Inditex’s Executive Chairman, Pablo Isla, said in a statement . I would like to publicly thank all of our people for their tremendous commitment throughout the global health crisis and during the gradual return to our stores and operating facilities.

“I would like to highlight how they have consistently followed the appropriate protocols, which has delivered a consistent message of responsibility. As we have always said, people is what really matters for Inditex, beyond any other consideration, and I believe that the current situation we are living, prove it so,” he added.