CARACAS (Reuters) – A spokesperson for Phoenix World Trade said all Zara stores in Venezuela will be closed in the coming weeks, as a trade agreement between the Spanish brand’s giant Inditex and its local partner is under review.
Panama-based Phoenix World Trade and led by businessman Camilo Ibrahim confirmed the decision, after retaining the franchises of Zara, Pull & Bear and Bershka, two Inditex-owned trademarks, that have been open since 2007 in the South American country, despite the crisis. Crippling economic.
The company told Reuters that the last five stores of the well-known Inditex brands in Venezuela will be closed. The shutdown occurs when Inditex, the world’s largest retail apparel retail group, cuts hundreds of small points of sale in the countries in which it operates in favor of supermarkets.
“Phoenix World Trade is re-evaluating the commercial presence of its franchise brands Zara, Bershka and Pull & Bear in Venezuela, to bring them in line with the new model of integration and digital transformation announced by Inditex,” the company said to a request from Reuters.
The statement added that “the five stores that remained open … will stop operating in the coming weeks.”
Spanish group Inditex did not respond to a Reuters request for information.
Inditex plans to close as many as 700 stores in Europe, as well as 100 stores in America and another 400 stores in other parts of the world this year.
In the case of Venezuela, all Spanish retail stores will be closed just as local businessmen benefit from the oxygen the economy brings through the partial dollarization authorized by President Nicolas Maduro to counter US sanctions and years of hyperinflation.
Two executives in the mall sector said, under anonymity, that the vast spaces occupied by the Zara, Bershka, and Pull & Bear branded stores are already empty in at least three large malls in the country, as they are not authorized to speak publicly. About the decision.
Reuters witnesses said three stores were closed in May in the capital. Zara’s stores were open until last week in Caracas and showcased clothes from the Spring Collection.
Since 2007, Inditex has delivered store operations to Phoenix World Trade in Venezuela. At the time, to import clothes, entrepreneurs had to buy dollars from the government, under strict exchange controls that sometimes left stores empty during the socialist government.
Phoenix has managed to keep it in stock, along with the franchises of other global brands it also manages, avoiding changing regulations and even a lengthy quarantine that the government has ordered to confront the global coronavirus pandemic since March 2020.
Inditex brands exit occurs when new businesses are opened in the country with imported products, which the business can sell at dollar prices, signifying the changes that have arisen with the flexibility of regulations.
The white walls blocking the entrance to the closed Zara store in Caracas herald the upcoming opening of Lola, a little-known brand in the country. According to local sources, Ibrahim Group will reopen the stores with the goods it will import, without a commercial agreement with Inditex.
(Additional reporting by Corinna Pons, Myla Armas, Victoria Waldersi. Additional information written by Sarah Kinusian).