Inditex closes all Bershka, Pull & Bear and Stradivarius operations in China

Inditex's goal, stated months ago, is to adapt its business model to the needs and trends of different audiences. Thus in the last period, it has been redistributing its resources, closing or opening different stores according to market response. In line with this strategy, in January 2021 it announced its intention to close all the Chinese physical shops of Bershka, Pull&Bear and Stradivarius, but to maintain only their online presence. And so it has been, at least until now, because the Spanish giant has changed its mind and decided to terminate the local e-commerce activities as well, completing the exit of each of the three brands from the market. According to a series of notices on Tmall, where Bershka, Pull&Bear and Stradivarius had virtual flagship stores, customer service will remain available until 31 August 2022. 

In the first quarter of the year, Inditex's profits increased by 80 percent, while sales rose by 36 percent; in China, however, performance was not as good. On the contrary. The eastern country underperformed, underperforming due to the closures of its 67 shops related to Covid-19 restrictions. In addition to lockdowns and pandemic, another factor that may have affected these negative figures is the rise of local Chinese players such as Peacebird, Urban Revivo and Mo&Co. and, above all, the now highly successful Shein. 

Last year, the Spanish giant planned to close 1,200 smaller shops to focus on its large flagship shops, and it is doing the same in China. Despite the fact that three of its brands are leaving the country for good, Inditex will continue to expand its retail network in the territory, focusing on Massimo Dutti, Oysho, Zara Home and, of course, Zara, which recently opened two shops in Changsha and Chengdu, each with 3,000 square meters of floor space and equipped with sophisticated retail technology. If this strategy implemented in China proves successful, will the same happen in Europe? Should we also prepare to say goodbye forever to Bershka, Pull&Bear and Stradivarius?