Inditex accelerates the closure of stores with the integration of Uterqüe into Massimo Dutti

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Inditex had a turnover of 6,994 million euros in the second quarter, a figure higher than in 2019. From these quarterly results, two key aspects of the future of the textile giant stand out. The first is that the company has left the pandemic behind with record sales in the second quarter. And the second is the unexpected integration of Uterqüe into Massimo Dutti in 2022 and the progressive closure of its 82 stores.

The reasons for this latest integration are various. Inditex recognizes that Uterqüe’s situation is good, but there is a problem with its size when compared to the rest of the brands. Uterqüe is the smallest with 82 stores.

The largest is Zara with 1,979 stores (data that includes 73 for Zara Kids and 509 for Zara Home); followed by Pull & Bear, with 864; Massimo Dutti, with 654; Bershka, with 987; Stradivarius, with 931; and Oysho, with 575.

Inditex stores as of July 31, 2021. Source: Inditex.

Inditex stores as of July 31, 2021. Source: Inditex.

The second has to do with the investment plan announced for the 2020-2022 period, of 1,000 million euros allocated to digitization and 1,700 million euros to the integrated store platform and online.

This is where the strategy of integrating Uterqüe comes from. “It is about taking advantage of synergies and catapulting the brand through Massimo Dutti”, recognized from the company founded by Amancio Ortega.

In this way, the aim is to make the most of the penetration and projection that Massimo Dutti has had in international markets such as the United States, Canada, Mexico or Turkey for years. It is present in 74 markets, while Uterqüe slightly exceeds a dozen.

This transformation plan also involves the closure of stores. In just one year, between July 2020 and July 2021, there are 683 fewer stores across the group. For what to At the end of the semester (July 31, 2021), Inditex has 6,654 stores. Data that next year will also have to discount almost all of the spaces that Uterqüe occupies.

Although it will be seen store by store, Inditex sources confirm to Invertia that the establishments will be progressively closed throughout 2022. “Teams will be integrated and relocations will be offered for Uterqüe employees,” they point out. The entire range of Uterqüe products will become available on the website and in selected Massimo Dutti stores.

The strategy started in 2019 with the integration of Zara Home into Zara, where synergies between brands are maximized. The rest of the formats, meanwhile, continue to develop their integrated digital transformation strategy. All have closed stores, but also maintain relevant store openings.

Why Massimo Dutti?

The Massimo Dutti’s choice to join the smaller Inditex brand is no accident since, for example, they share users. “On many occasions, the customer of the chains is very similar”, they assure. Massimo Dutti’s fashion is focused on a more adult public profile that seeks elegance and class when it comes to dressing.

For its part, Uterqüe was launched in 2008 with the aim of making accessories and accessories a fundamental part of a woman’s wardrobe. AND one of its greatest ambassadors is Queen Letizia, very assiduous to wear brand clothes.

The another reason is a question of profitability. In the first half of the year, Massimo Dutti had a turnover of 607 million euros in its 654 stores. That is, more than 928,000 euros per store on average. Only surpassed by Zara (with an average of 4.2 million euros in sales per store) and very even with Bershka (931,000 euros on average).

If we go back a year, specifically at the end of 2020, Massimo Dutti’s turnover was 1,197 million euros, managing to sell 4,633 euros per square meter spread over the 677 stores it had at that time.

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