10-4-2024 (BEIJING) News of Spanish fashion brand Zara closing stores in several Chinese cities has sparked urgent shopping sprees among consumers. However, regarding the rumours of Zara gradually withdrawing from the Chinese market, staff members stated that there is currently no such information.
According to the Hong Kong-based newspaper “Sing Tao Daily,” messages resembling warnings have been circulating on various social media platforms in China: “Buy and cherish now, as this city will no longer have Zara in the future.” This has left many loyal customers of the brand feeling both nostalgic and puzzled.
As reported by the “Daily Economic News,” Zara’s physical stores in the Chinese market peaked around 2018 with a total of 183 outlets. Today, only 87 remain, with the closure of the Baoshan store in Shanghai on April 2 and the Dongguan and Huizhou stores on March 31.
Zara staff confirmed the recent closures in several cities, including Huizhou, Dongguan, and Shanghai. Notably, the outlets in Huizhou and Dongguan were the only ones in their respective cities and had been operating for over a decade. After pulling down the shutters, these two cities will no longer have physical Zara stores.
Peak Period with 183 Stores
As a leader in fast fashion, Zara, owned by the publicly listed company Inditex Group, boldly positioned its stores, with average product prices around 100 yuan, next to luxury brands like LV and Gucci, which command prices in the tens of thousands of yuan. This demonstrates its once formidable popularity.
Not only in China but globally, Zara’s net reduction in stores over the past year has been 74. Despite this, its sales for the fiscal year 2023 increased by 10% year-on-year. Zara’s founder, Amancio Ortega, also continues to feature on the 2024 Forbes Billionaires List, climbing one spot from 2023 to rank 12th with a wealth of $111.2 billion.
Reports suggest that Zara’s closure of stores is seen as a “retreat for advancement” strategy, generating profits while simultaneously closing outlets.
Fashion brand experts note that Zara began live streaming on Douyin last year and is transitioning from smaller stores to larger ones, ultimately aiming for one store per city. This reflects the main trend in the future of retail, with Zara expected to close more stores, while those remaining will undergo extensive digital transformation.
