By: CNN
Inditex, the world’s biggest clothing retailer, is spending billions on its online operations and premium stores from Barcelona to Beijing despite steep losses caused by the coronavirus pandemic.
The owner of Zara and Massimo Dutti said in a statement Wednesday that it will invest €2.7 billion ($3 billion) over three years to develop a “fully integrated store and online model.”
The strategy includes investing €1 billion ($1.1 billion) in its digital operations. The Spanish group also plans to have fewer stores in the future, closing as many as 1,200 this year and next, while opening 450 higher quality, larger outlets in premium locations.
“Stores will play a stronger role in the development of online sales due to their digitalization and capacity to reach customers from the best locations worldwide,” Inditex said, adding that customers would benefit from larger and “more attractive stores.” In a presentation on its website, Inditex listed Barcelona, Edinburgh, Riyadh, Beijing and Bogotá as locations for some of these “highly prominent, differentiated stores.”
Inditex said that online sales jumped 95% in April from the same month last year, and were up 50% in the first quarter of its fiscal year.
As many as 25,000 brick-and-mortar retail stores in the United States are expected to permanently close this year, according to a report released Tuesday by Coresight Research, which cited online shopping as driving up closures.
Inditex said it expects online sales to reach more than 25% of total sales by 2022, up from 14% in 2019. The company said it will invest in its existing technology platform to make it more agile and data-driven.
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