Inditex accelerates its strategic transformation and reorganizes its chains

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Sep 15 2021

The end of Uterqüe as we have known it so far has become one of the protagonists of the day of the presentation of the semi-annual results of the Galician group. Inditex’s smallest chain, characterized by its limited collections and premium positioning, will close its entire network of stores and will be fully integrated into Massimo Dutti over the next year. The entire range of the firm’s products will become available only through the online boutique and a number of selected stores.

Campaign “Incoming”, in 3D format, by Uterqüe – Uterqüe

“We believe that it is the correct strategy to move forward. The integration will give more visibility to Uterqüe and will provide it with new markets thanks to the network of stores and the international penetration of Massimo Dutti in markets such as the United States, Canada, Mexico and Turkey ”, has assured about the reorganization of the brands Pablo Isla, president of the group, during the conference with analysts this Wednesday, September 15. As the executive recalled, this “integration” follows a strategy similar to that applied from the integration of Zara Home into Zara, in 2019, to make the most of “the synergies between chains.” The difference? Beyond incorporating its products into Zara’s physical and online stores and jointly presenting its financial results, the home and decoration brand has maintained its own network of differentiated physical spaces.

Uterqüe will close all of its 82 stores

Launched in 2008 and based in Tordera (Barcelona), Uterqüe was the first concept of the Galician group to properly venture into the segment of high-end products. With a limited size, compared to the rest of the chains in the conglomerate, Uterqüe never exceeded one hundred physical establishments. Most of them were located in Spain, but the brand also became present in markets such as Mexico, Russia, Portugal, Poland, Saudi Arabia, the United Arab Emirates, Morocco or Ukraine. In Western Europe, despite having tried the pop-up format in capitals such as London, the brand limited its operations to e-commerce. Thus, the 82 stores with which the brand operated as of July 31 (compared to the 89 active points of sale in 2020), will progressively close over the next few months.

In terms of billing, Uterqüe closed the first half of the year with sales of 48 million euros, a figure that improves the 31 million euros registered in the same period of the previous year, strongly affected by the impact of the pandemic. However, these numbers remained far from the second concept of the smallest group in turnover volume: the intimate and sports fashion chain Oysho, which went from 208 million euros invoiced in the first 6 months of 2020 to 305 million euros in the first half of this year.

Oysho had a turnover of 305 million euros in the first half – Oysho

Likewise, the brand has also reduced its network of establishments from 665 to 575. For its part, Massimo Dutti achieved double the turnover of the sports brand, with sales of up to 607 million euros (490 million euros in the first half of 2020) and registered a similar closure of stores, going from 728 to 654. However, sales of the premium brand are still far from the pre-Covid-19 levels, closing the first half of 2019 with 844 million euros. Thus, the alliance with Uterqüe could act as support for his recovery.

Of all the bets of the group founded by Amancio Ortega, the only failed case that is remembered is that of Often, an urban and men’s fashion chain that closed its network of 40 stores in Spain and Portugal in 2006, 3 years later. of its launch. Born from the hand of Pull & Bear, the chain was launched with the aim of reaching an older cosmopolitan audience, between 20 and 45 years old. A business line that ended up selling its spaces to Friday’s Project and whose positioning was progressively assumed and reinterpreted by Zara’s men’s division and Pull & Bear itself.

Although Inditex has identified a “remarkable online growth in all markets”, the textile group has underlined a “strong performance in Oysho and Stradivarius”. This last chain, which has just launched a project as an art dissemination platform, has ended the first semester with sales of 782 million euros (compared to 502 million euros in the first 6 months of 2020) and has recorded the closing from 63 stores, from 994 to 931 stores.

Bershka recently launched a collection with singer C. Tangana – Bershka

In third place according to the volume of turnover is the young Pull & Bear format, having registered sales of up to 786 million euros, exceeding the 578 million euros invoiced in the first half of last year. Having opened two key locations in Edinburgh and Florence, the brand has 864 stores, up from 946 last year. Soon, the brand is preparing strategic openings in Izmir (Turkey), Doha (Qatar) or Guadalajara (Mexico).

For its part, Bershka, which has reduced its commercial network by 99 stores (from 1,086 to 987), claims to be the second chain of the group that sells the most. Thus, its turnover in the first semester has gone from 692 million euros, in 2020, to 919 million euros, in the current year. During the second quarter, the brand starred in “significant openings” at the Forum des Halles shopping center, in Paris, Edinburgh or Cairo. In Spain, the chain presented its renewed image in its new store on Calle Preciados in Madrid, which opened on September 3. And in the coming months, the chain finalizes the opening of spaces in Rome, Istanbul or Bucharest.

Zara’s offer continues to grow: launches Origins and Zara Athleticz

Finally, Zara maintains its absolute leadership as the group’s star chain. Of the total 11,936 million euros invoiced by the group between February and July, with an increase of 49% compared to a year earlier, Zara and Zara Home contributed up to 8,488 million euros (which contrasts with the 5,532 million euros registered in the first half of 2020). From the 2,133 stores it had a year earlier, Zara has now operated with a total of 1979 stores, which include 73 Zara Kids concept stores and 509 Zara Home stores. As reported by the company, at the end of the semester, the group operated with 6654 stores (compared to 7337 spaces as of July 31, 2020), after the opening of 92 new stores in 27 international markets.

New collection Zara Origins – Zara

In the second quarter, the brand based in Arteixo (A Coruña) opened a 67,000 square meter building dedicated to and added new stores to its network in cities such as Edinburgh, Cardiff, Düsseldorf, Berlin, Brussels, Perm ( Russia) and Kharkov (Ukraine). Also, to the renovations of spaces in Marbella and Seville are added the remodeling and extensions of stores in Amsterdam, Geneva or Abu Dhabi. And in the coming months, the brand plans to open and expand in London One New Change, Paris La Défense, Milan Corso Buenos Aires, Sidney Westfield, Chengdu Taikoo Li (China) and Cape Town Waterfront.

Added to Zara’s new developments in terms of optimizing its commercial network is the launch of Zara Athleticz, a men’s line with which the brand will enter the sports segment. The garments, of a simple and functional nature for the “practice of any sport”, will be available from September 30 in a selection of stores and through the web. The launch, which will be supported by the boom in sportswear sales during the months of confinement, will be based on a series of human accounts about the practice of sport and will present the numbers 26-1-18-1 as brand identity, representing the letters that form “Zara” in the Anglo-Saxon alphabet.

In parallel, the chain has launched the “Origins” collection this September 15, a line of “essential and minimalist” garments that will have its own temporary store in Paris, from September 27 to October 5. Likewise, Inditex is developing different options for the brand’s app. This is the case of Zara ID, a QR that allows the identification of customers in its physical stores and includes payment, return and online collection functionalities. The project, currently in the first test phase, is underway in 15 markets, such as Spain, the United Kingdom, France, Mexico and the United States.

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