Inditex is a Spanish based multinational clothing company. It has its headquarters located in Spain and was formed in the year 1985. They own the famous clothing brands such as Zara, Pull&Bear, Bershka, Zara Home, Massimo Dutti and many more. The company has announced that it is shutting down all its stores in Venezuela. Let’s look at the reason behind it.
Zara - Latest News
The parent company of Zara, Pull&Bear and Bershka, Inditex has conveyed that in the next few weeks it would close all its shops in Venezuela. The companies Zara, Pull&Bear and Bershka have been operating as franchises in Venezuela since the year 2007 even though it is owned by Inditex SA.
The three retail brands have already shut down a number of their outlets in the malls with some of the outlets displaying new logos and names carrying the board coming soon.
Email Statement by Inditex
The Operations Director Andres Brant has conveyed through an email statement that the other 5 outlets which are open under the previous model will cease their operation in the next few weeks. He added that the franchises of Inditex which is operated by Phoenix World Trade in the Dominican Republic and Aruba will stay open.
About Phoenix World Trade
Phoenix World Trade is a Panamanian based company that is run by Camilo Ibrahim. The Phoenix World Trade manages the franchise. The company has conveyed that they are re-evaluating the commercial presence of their brands Zara, Bershka and Pull&Bear according to the new model announced by Inditex SA.
The new model is expected to make the outlets more logical towards digital transformation and integration model.
Reason Why Zara is shutting down its Store in Venezuela
The reason for the move is mainly because the Venezuelan government had increased its efforts to bring in more foreign direct investments into the country by withdrawing the socialist policies which were present in the country for a very long time.
The administration under Nicolas Maduro had allowed the country to transact through dollarization from the year 2019 due to the compel by the U.S sanctions. This let the private companies in the country more freedom to operate.
The Inditex brands were very popular among the Venezuelans as they used to always line up outside the outlets in order to purchase the products whenever the government had forced to reduce the prices or allowed the company to import merchandises at a subsidized price.
How many stores does Zara have in 2020?
Zara has around 2000 stores in 2020.
Which country has the most number of Zara stores?
Spain has the most number of Zara stores.
How many stores does Zara have in India?
Zara has around 22 stores in India.
In the year 1998, Inditex had entered the Venezuelan market, in the beginning managing the retail stores and then moving into the franchise model. The lack of merchandise often led the company to temporarily close the franchise outlets due to years of price controls and exchange rates.