ZARA AND GUESS TO SHUT DOWN OVER 1000 STORES WORLDWIDE

Zara owner to close up to 1200 fashion stores around the world.

By Balthazar Malevolent

ZARA AND GUESS TO SHUT DOWN OVER 1000 STORES WORLDWIDE

Zara and Massimo Dutti's parent company Inditex announced it would close 1,000 to 1,200 retail stores over the next two years, turning its focus instead to e-commerce and online sales, which have seen huge popularity rise during the ongoing coronavirus pandemic. The step represents a break in its trend of rapid growth over the last 15 years, now amounting to almost 7,500 stores covering 96 different countries across the globe. In addition to developing its online sales platforms, the conglomerate also hopes to deploy new technologies in its remaining physical locations to streamline shopping experiences for consumers.

Rue de Rivoli Zara branch in Paris.

"The main goal between now and 2022 is to accelerate the full implementation of our integrated store concept, driven by the notion that our customers can offer uninterrupted service wherever they are, on any device and at any time of the day," said CEO Pablo Isla.

The announcement comes after Inditex saw an incredible 95 percent rise in online sales for the month of April alone, no doubt due to lockdown regulations and social distancing rules forcing retail stores to shutter and consumers to stay home.

Guess, in the course of the next 18 months, will shut down 100 of their stores worldwide. According to the company's CEO Carlos Alberini, many of the label's stores would end their lease deals in a similar timeline, allowing Guess to reconsider terms.

After experiencing shifts in stock performance, Guess are pivoting their business strategy throughout China, North America and Europe. "Under our new-normal model it made it very clear that our global store portfolios could be optimized to increase profitability," Alberini said in a conference call with analysts. Reports indicate that Guess shares have fallen by roughly 24 percent, $9.71 USD, recently—a decline of 52 percent when measured against the beginning of the year. Much of this was caused in the midst of the COVID-19 crisis by extended closures of Guess' stores. In an attempt to cut down the losses, Guess furloughed a large portion of the store employees, half of their corporate employees, and laid off 150 workers at its Los Angeles headquarters, while significantly cutting some management's salaries.

We will be following the announcements and changes in the strategy of other big brands such as Alexander Wang and Victoria Beckham, we will keep you updated.

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