Zara and H&M closed hundreds of stores, switching to selling online

“Instant noodle fashion” companies are turning to the e-commerce war, starting with the gradual closure of stores around the world.

Perhaps Hennes & Mauritz (the Swedish company behind H&M) and Spain-based Inditex (owners Zara and Massimo Dutti) both saw the benefits of decisions made last year like cuts. retail network, and adding resources to the E-commerce war.

According to Fortune, 18 months ago, H&M still struggled with the change of online shopping and it seems that traditional stores no longer make money.

Sang this summer, a volatile year for stocks, tried to keep the 15% increase the company achieved when it announced its most recent quarterly earnings at the end of June.

The remarkable results because the summer collections created great success, with sales up 12% from the previous year. They plan to reduce unsold inventory in the fourth quarter in a row. The stock is now up one third from its 14-year low in August last year.

The big factor contributing to H&M’s change is the careful and objective evaluation. After closing about 140 retail stores in 2018, H&M adjusted its plan to open stores this year from 175 around the world to 130 stores.

Immediately, the chain of retail stores is over-cut in Europe and will continue to reduce H&M brand stores across the continent this year.

In contrast to H&M, Inditex (Zara’s parent company) tripled its stores across the globe, to nearly 7,500 stores under the former CEO – Pablo Isla. In it, Massimo Dutti and Bershka focus on young people. The expansion makes it difficult for many traditional shops to survive in the era of e-commerce.

Isla reacted by closing 355 stores last year, 76% more than originally expected. This year, under the new CEO – Carlos Crespo, the company is about to build 250 more stores, while opening another 300 stores.

The two “giants” that plan to participate in e-commerce this year are even more impressive. A bold approach is probably praiseworthy, as both report online sales of less than 15% of total sales. For comparison, about 27% of US apparel sales take place online.

“We want to make our fashion collections available to all customers, wherever they are in the world,” Isla said in May, “Even in markets where there are currently no stores. Our orthodox “.

H&M promises to upgrade its online store, including navigation, product presentation and shorter delivery times (especially in areas that are not favorable for online rivals such as Zalando and Boohoo. and of course Amazon.

Despite closing several retail stores, H&M and Zara are still on the rise, with sales expected to grow this year.