Zara Will Close More Than 1,000 Stores by 2022
Like many fashion brands in the age of coronavirus, Zara is rethinking their current retail strategy.
According to Business Insider, the fast fashion giant's parent company, Inditex, will close as many as 1,200 stores worldwide by 2022. Instead of relying largely on brick and mortar for sales, Inditex is doubling down on e-commerce in the post-pandemic future, and plans to invest $1 billion into the platform over the next three years.
As part of its new digital strategy, Inditex will “increase the online customer service teams and the dedicated packaging both from the specific online stockrooms and from the stores.”
Online sales in April alone increased to 95%, and CEO Pablo Isla expects e-commerce to make up 25% of total profits in two years. But despite the uptick, Inditex reported a $513 million loss in Q1 due to the current health crisis.
Zara isn't the only brand to face financial hardship as a result of the COVID-19 pandemic. In May, J.Crew filed for bankruptcy, while major department stores, including Neiman Marcus and J.C. Penney, are exploring the idea. Additionally, Guess has announced its closing 100 stores in the U.S. and China.