On January 8, according to foreign media reports, Zara’s parent company Inditex Group, known as one of the “four largest fashion retail groups in the world”, announced that its Bershka, Pull&Bear and Stradivarius will close all Chinese stores and only retain Official website and other e-commerce channels. According to people familiar with the matter, large fast fashion giants like Inditex will enjoy “escape clauses” in shopping malls. They can terminate the lease agreement in advance after notifying the owner 3-6 months in advance, and can close the store without liability.
This will be the largest retreat of Inditex Group in the Chinese market. In the future, the only brands of Inditex Group that will still have offline stores in China will be Zara, mid-range brand Massimo Dutti, underwear brand Oysho and furniture brand Zara Home.
From the perspective of Inditex Group, we will retain the core Zara, high-end Massimo Dutti, sports and leisure Oysho and home lifestyle brand Zara Home in the Chinese market. A well-positioned brand is enough. After accumulating in recent years, Bershka, Stradivarius and Pull&Bear have millions of fans online, and closing physical stores will not have a serious impact on the group’s performance.
Inditex Group said: “Based on our continuous analysis of Chinese consumer needs, Inditex’s young brands will focus on strengthening their e-commerce development.”
Inditex (founded in 1963), as one of the world’s largest fashion retail companies, owns 8 commercial brands – Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterque around the world There are more than 7,400 stores in 96 markets. The most proud advantage is that the produced clothing can be delivered to any store around the world within 15 days. As of the end of October 2020, the Inditex Group had 7,197 stores worldwide.
It is reported that Stradivarius focuses on women’s clothing products, while Bershka and Pull&Bear take care of both men’s and women’s clothing. Fund Jun checked the official websites of the three brands and found that they are all in discount season, with some products as low as 30% off. These three brands all aim to focus on young people. Most of the clothing prices are less than 1,000 yuan, and the average price of ordinary shirts and T-shirts is around 100-500 yuan.
Zara parent company Inditex Group released first-quarter financial data as of the end of April, which showed that Inditex Group recorded a net loss of 409 million euros in the first fiscal quarter, compared with a net profit of 734 million in the same period last year. billion euros.
The company said that the new crown epidemic had a huge impact on its business, causing its sales to drop significantly. Total sales in this quarter were 3.303 billion euros, a decrease of 44.27% from 5.927 billion euros in the same period last year. In addition, Inditex Group stated in the first fiscal quarter that it plans to permanently close 1,000 to 1,200 of its stores, equivalent to 13% to 16% of its total global stores.
The Inditex Group’s financial report for the first half of the year showed that the net loss in the first half of this year reached 195 million euros (approximately RMB 1.5 billion). At the same time, Inditex Group has also begun to enter the stage of adjusting and closing stores, as it disclosed in its first quarter financial report the store closing plan.
As early as June 10, 2020, Inditex Group had the idea of closing stores globally. At that time, the company stated that it planned to permanently close 1,000 to 1,200 of its stores by 2021, equivalent to 13% to 16% of the total number of stores worldwide.
So, what is surprising is not that this company will close stores, but that it goes back on its words shortly after announcing that it will continue to open stores. In the third quarter financial report released in 2020, Inditex Group also claimed that brands such as Pull & Bear, Stradivarius, Bershka, Massimo Dutti, etc. will open new stores in China, Russia and other places. In the first three quarters of 2020, the group’s revenue fell 14% year-on-year to 6.1 billion euros, but its e-commerce business increased significantly by 76%.
Some analysts believe that the purpose of this round of large-scale store closures by Inditex Group is to cool down the over-expansion in previous years. After all, under the catalysis of the epidemic, consumers are moving online. Transfer has become an inevitable trend. But it also marks that the group bids farewell to its period of rapid growth and enters a period of transformation. In other words, closing a store is not only a timely stop loss, but also self-optimization. </p
