Retail stores across the world have been severely affected by the pandemic, with plummeting revenues due to a sharp drop in visitors.
In a recent statement, global fashion retail chain, Zara, announced that the company will close up to 1200 retail outlets across the world.
The company will close down its smaller stores to focus on its larger outlets and online sales initiatives instead.
This move comes after the parent company posted its first net loss of €409 million in Q1 2020, after sales fell from €5.9 billion to €3.3 billion since the previous year.
Despite its closures, the company will focus on expanding their larger stores floor space by 2.5% a year from 2020 until 2022.
Zara’s parent company will also spend €2.7 billion to upgrade technology across all their stores to drive online sales, which were up 95% during the lockdowns in April.
Offline retail will continue to be affected as long as the pandemic lingers, as stores will be required to implement preventive measures such as prohibiting contact with store items and contact-tracing on entering, losing their competitive advantage over online shopping.