• Quarterly results: Inditex records historical losses of 409 million by Covid

Inditex will accelerate its commercial network optimization strategy, after the impact that the coronavirus pandemic has had on its accounts. The group that owns Zara had to close 88% of its stores during the weeks of confinement, which has led it to present losses of 409 million for the first time in its history. However, online sales (this channel has been operational during the health crisis) have increased by 50%, and in April they did so by 95%.

As a consequence, the group has decided to accelerate its digitalization and reorganization strategy of the commercial network, a process in which it has been working for years. It basically consists of closing the smallest stores and opening bigger, more modern and digitized ones. Specifically, the group plans to close 1,000 to 1,200 establishments this year and next year, of which 250 to 300 will be in Spain.

Other larger stores will also open, although it will be in smaller numbers. This does not mean that Inditex will lose commercial space. Compensating the closings with the openings, the total commercial surface will grow 2.5%, as announced by the textile giant. The cost of this closure plan is 308 million euros and has been included in the income statement for the first quarter of 2020, which were presented today.

Inditex currently has a network of 7,412 establishments. The goal is to reach the end of 2022 with between 6,700 and 6,900. Those that are going to close are, according to what the group has explained, "stores at the end of their useful life, especially in young formats" and whose sale can be recovered in nearby stores and 'online'.

In accordance with the criteria of The Trust Project

Know more

  • Inditex Group
  • Spain
  • Zara
  • economy

EmpresasInditex records historical losses of 409 million by Covid

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