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Inditex, the owner of Zara, will close up to 1,200 of its smaller stores worldwide by 2021, Reuters reported.

Inditex, which owns multiple fashion brands such as Massimo Dutti, Pull & Bear, and Bershka made the announcement following news that it had suffered its first loss due to the Covid-19 outbreak.

The outbreak had resulted in operations to be suspended at most of its stores.

Smaller stores affected

Inditex will "absorb" between 1,000 and 1,200, most of which are smaller stores. The stores expected to close will be located in Asia and Europe, according to The Guardian.

However, Inditex assured that the "headcount will remain stable" and that staff will be offered other job roles such as handling online purchases.

The Guardian said that the overall number of stores will fall from 7,412 to between 6,700 and 6,900. This number takes into account the opening of 450 new stores.

Inditex faced a net loss of €409 million (S$644.6 million) from February to April 2020, following a 44 per cent drop in sales to €3.3 billiob (S$5.2 billion).

The losses came from other Inditex brands, besides Zara.

Refocusing

The company will turn their attention towards bigger stores, with plans to expand shop floor space by around 2.5 per cent a year from 2020 to 2022.

Guardian revealed that the company has a €2.7 billion (S$4.25 billion) plan to upgrade technology at stores in order to push online sales. They hope that online sales will comprise 25 per cent of sales by 2022, as compared to 14 per cent now.

Online sales rose by 95 per cent in April during the Covid-19 outbreak, compared to the previous year.

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Top photo via Zara on Facebook