How Inditex is refashioning its business model

https://www.economist.com/node/21797486?fsrc=rss%7Cbus
IT HAD BEEN closed, on and off, for much of the past year. Now signs on the blacked-out windows of the Zara shop on the Champs-Elysées, the Spanish brand’s early outpost in the French capital, announce it will not re-open even after covid-19 passes. Disappointed fashionistas are redirected to the label’s website for all their value-for-money sartorial needs. Alternatively, they can stroll two blocks down the avenue, where another Zara shop opened a few years ago. There are three more within a half-hour’s walking distance in central Paris.
Peppering city centres and malls with more outlets used to be the obvious strategy for apparel retailers seeking new customers. Inditex, Zara’s owner and the world’s biggest purveyor of fast fashion, grew from fewer than 750 stores at the turn of the century to around 7,500. But trends come and go in business as they do on the catwalk. In 2020, for the first time in its two-decade history as a listed company, Inditex finished the year with fewer shops than it had 12 months earlier—and suffered its first quarterly loss. Up to 1,200 outlets are in the process of being axed, compared with 300 planned openings. Inditex, the most admired firm in the sector, has not run out of ambition. Instead, Zara is chasing its young clientele to where they spend the most time: on their phones, shuffling between…