Fashion retailer Zara has announced that it plans to close almost 1,200 stores by 2022 in a move that will pivot the business towards being a digital-first retailer.
As per Business Insider, the fast-fashion giant's parent company, Inditex, is doubling down on e-commerce in the post-pandemic future instead of relying largely on brick and mortar for sales and plans to invest $1 billion into the platform over the next three years.
As part of its new digital strategy, the brand – which also owns Bershka, Pull&Bear and Massimo Dutti – will “increase the online customer service teams and the dedicated packaging both from the specific online stockrooms and from the stores.”
Online sales in April alone increased to 95%, and CEO Pablo Isla expects e-commerce to make up 25% of total profits in two years.
However, despite the surge in sales, Inditex reported a $513 million loss in Q1 due to the current health crisis.
It's not yet known exactly which Zara locations will be affected, but the closings will be "stores at the end of their useful life" and "whose sales can be recovered in nearby stores and online," the company said their statement.
And it seems that Zara isn't the only brand to face financial hardship as a result of the COVID-19 pandemic.
In May, J.Crew filed for bankruptcy, while Victoria's Secret and Guess have also announced a series of store closures. It seems that shopping as we know it may never be the same again.
Main image by @zara