Inditex (ITX.MC), owner of brands such as Zara, Bershka and Pull & Bear, will close all of its stores in Venezuela in the coming weeks as an agreement between the retailer and its local partner Phoenix World Trade is under review. , a spokesperson for Phoenix World Trade said.
Phoenix World Trade, a Panama-based company controlled by Venezuelan businessman Camilo Ibrahim, took over the operation of Inditex stores in that South American country in 2007.
“Phoenix World Trade is re-evaluating the commercial presence of its franchise brands Zara, Bershka and Pull & Bear in Venezuela, to make it consistent with the new model of integration and digital transformation announced by Inditex,” the company said in response to a report. Reuters request. “The five stores that remain open … will cease to operate in the coming weeks.”
Spanish group Inditex did not respond to Reuters’ request for information on the closure measures.
The closures come as Inditex, the world’s largest clothing retail group, cuts small outlets around the world in favor of flagship store expansion, with 1,200 closures expected by the end of 2021.
Up to 700 stores are expected to close in Europe, along with 100 in the Americas and 400 elsewhere in the world.
In at least three major Venezuelan malls, spaces once occupied by Zara and Pull & Bear – another Inditex brand – are empty, two local retail executives said. The two spoke on condition of anonymity as they were not authorized to speak publicly about the decision.
In the capital, three stores closed in May, according to Reuters witnesses. Zara stores open until last week in Caracas offered items from the spring collection.
Ibrahim became Inditex’s local partner in 2007 to help cope with changing local regulations and keep shelves stocked as the government of former socialist President Hugo Chavez exercised tight control over the foreign exchange market. and that businesses needed government approval to purchase the necessary dollars. to import clothes.
This sometimes left clothing stores empty as businesses struggled to secure hard currency.
Despite the decision to shut down Zara’s sites, Venezuelan businessmen are currently allowed to import goods and sell them at hard currency prices, a break after years of price controls on many key items. Luxury stores known as bodegones and cafes that advertise dollar prices have surged amid chaotic economic liberalization.
White walls blocking the entrance to a closed Zara store in Caracas herald the upcoming opening of a store named Lola, a brand unknown in the country. According to local sources, Ibrahim’s group will reopen these stores, without the business deal with Inditex.
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