Zara, Bershka to shut 1,200 stores globally

Parent company Inditex booked a net loss of 409 million euros

zara_final Zara store at Paris, France | Reuters

Inditex, owner of the high street brand Zara owner Inditex booked its first loss as the coronavirus crisis forced it to shut most shops. Its shares however increased after it unveiled a 2.7 billion-euro plan to accelerate its focus on large stores and online sales. 

Around 1,200 stores owned by the company from different parts of the globe will be shut down. Inditex-owned brands like Massimo Dutti and Bershka also saw a rapid drop in sales— a 51 per cent drop in June this year as compared to a 34 per cent drop in May last year. Store closures will most likely take place in Asia and Europe

With factories being shuttered down fell too.  Inditex booked a net loss of 409 million euros after sales tumbled to 3.3 billion euros, down from 5.9 billion euros in the same period a year earlier. 

Clothes retailers from H&M to Gap Inc also have reported a sharp drop in sales as shoppers hunkered down at home during global lockdowns to halt the spread of the coronavirus. However, online sales for clothing brands owned by Inditex surged by 95 per cent in April. The company, therefore, has decided to spend 2.7 billion euros to upgrade technology and drive online sales, so that the numbers are met by 2022.  

UK brands like Monsoon, Accessorize and Quiz will also shut down many stores as hundreds of employees were asked to leave and sales were low.