Zara Owner Inditex Agrees to Transfer Stores in Argentina and Uruguay to Regency Group
- Shams Ul Zoha
- July 20, 2023
- 3:41 pm
WHAT YOU SHOULD KNOW
- Inditex, the owner of popular fashion brand Zara, has decided to transfer the operation of its stores in Argentina and Uruguay to Regency Group, which already manages Zara stores in other Latin American countries.
- The 15 Zara stores in Argentina and Uruguay will now operate under a franchise model, marking a shift from the direct operation by Inditex over the past 25 years.
- As part of its global strategy, Inditex has been reducing the number of stores worldwide and focusing on expanding flagship stores.
Inditex, the parent company of Zara, has announced an initial agreement to transfer the operation of its 15 stores in Argentina and Uruguay to Regency Group, a company that already manages other parts of Inditex’s Latin American network. These Zara stores, which have been directly operated by Inditex for the past 25 years, will now operate under a franchise model under the management of Regency Group, based in Panama. As part of this arrangement, the 1,000 employees who worked for Inditex in Argentina and Uruguay will be contracted to Regency Group, which already oversees Zara’s stores in several other Latin American countries, including Colombia, Peru, Panama, Ecuador, and Paraguay.
Inditex has been implementing a strategy to optimize its global store network, leading to an 11% reduction in the number of stores worldwide since 2022. This involves closing smaller outlets in various regions while focusing on expanding flagship stores. In line with this approach, Inditex closed all its stores in Venezuela in 2022, which were previously operating under a franchise model. Additionally, Inditex has plans to expand its presence in the United States, aiming to open 30 new Zara stores from 2023 to 2025. The expansion includes larger shops in major cities such as New York, Chicago, Miami, and others.
Through this move, Inditex aims to streamline its operations, optimize its store portfolio, and leverage the expertise of Regency Group in managing Zara stores in Latin America. The franchise model allows Inditex to maintain its presence in Argentina and Uruguay while benefiting from the local expertise and resources of Regency Group to drive growth and customer engagement in these markets.
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