Inditex To Shutter Up To 1,200 Non-Zara Stores As It Pivots Toward E-Commerce

  • June 11, 2020 at 4:43 PM EDT
  • By Bryan Wassel
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Inditex may close 1,000 to 1,200 stores as the retailer puts a greater emphasis on e-Commerce operations. Most of the closures are expected to be smaller, non-Zara branded locations, and the retailer also plans to open 450 new stores fitted with the latest sales integration technology.

Staff members at the closed stores will be offered new roles with the company, such as handling fulfillment of ship-from-store orders. The retailer expects online sales to account for 25% of its total by 2022, up from 14% in fiscal 2019.

Inditex will support this effort by investing €1 billion into its proprietary e-Commerce platform, along with an additional €1.7 billion to further integrate its store platform and provide a full omnichannel experience.

“This strategy is a culmination of the project the company has been investing in steadily and significantly since 2012, a project that will transform its profile notably,” said Pablo Isla, Chairman and CEO of Inditex in a statement. “The overriding goal between now and 2022 is to speed up full implementation of our integrated store concept, driven by the notion of being able to offer our customers uninterrupted service no matter where they find themselves, on any device and at any time of the day.”

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Like many retailers, Inditex struggled during Q1 2020. Sales fell 44% to €3.3 billion, due to 88% of the company’s stores being closed at some point during the period due to the COVID-19 pandemic. However, year-over-year e-Commerce sales grew 50% during the quarter, peaking at 95% growth in April.

Inditex also will maintain its commitment to environmental sustainability despite the challenging circumstances. The retailer plans to equip all its stores with a proprietary environmental control platform; use only renewable sources of energy; apply a ticketless e-receipt system as the norm; and recycle or reuse all surplus incoming materials, such as cardboard, plastic and packaging.

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