Inditex, the Spanish group that owns the brands Zara, Pull Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe, experienced its first ever decline in floor space in the full year that ended on Jan. 31. The Spanish group had 6,829 stores at the end of the fiscal year representing an aggregate 4.827 million square meters of floor space, down by 5.1 percent from the 5.087 million square meters a year earlier. The figure is also lower than the 4.962 million square meters registered at the end of January 2019.

The key Zara brand saw a 4.1 percent decline in floor space in the full year to 3.210 million square meters, with the number of stores falling by 213 to 2,653. Oysho, which specializes in women’s homewear and undergarments, suffered the sharpest fall in floor space among Inditex’s banners, with a 9.2 percent drop to 115,581 square meters.

During the year, Inditex shuttered a record 751 stores worldwide, while opening 111, resulting in 640 net closures. The group focused on closing smaller and older stores.

In June 2020, Inditex announced a two-year business plan to have larger and “higher quality” stores with the aim of generating 4-6 percent annually in comparable sales growth and higher profitability. Over the two-year period, the move will result in the closure of 1,000 to 1,200 smaller-sized stores, which account for 5 to 6 percent of total sales. Meanwhile, Inditex plans to open 450 new stores fitted with the latest sales integration technology. Ultimately, it intends to have a total network of between 6,700 and 6,900 stores.

In the past full year, Inditex generated sales of €20.4 billion, down by 28 percent on a reported basis and by 25 percent in local currencies due to the impact of the Covid-19 pandemic. Online sales jumped by 77 percent in local currencies to over €6.6 billion, with growth more than doubling during certain periods of the year. During the year, Inditex launched its online sales platform in 25 new markets and opened new stores in 29.

The rollout of the group’s integrated stock management system reached 5,777 stores across 89 markets and “played a crucial role” during the pandemic. The system made it possible to fulfil 46 million online orders worth €1.16 billion from the group’s stores throughout the year.

Ebitda in the year fell by 40 percent to €4.6 billion, while net income dropped by 70 percent to 1.1 billion. Inditex plans to pay a full-year dividend of €0.70 per share including an ordinary dividend of €0.22 and an extraordinary dividend of €0.48.

The group added that store and online sales in local currencies declined by 15 percent between Feb. 1-28 with 21 percent of its stores closed. Between March 1-7, with 15 percent of stores closed, the top line contracted by 4 percent. Excluding the five more significant markets with mandated closures (Germany, Brazil, Greece, Portugal and the U.K.) sales were up by 2 percent.