Inditex temporarily closes stores in Algeria

Retail

Zara store in Mall of the Emirates in Dubái. Credits: Zara.

Madrid – With less than a week to go until Inditex reports on the company's performance during the third quarter of its current 2024 fiscal year, temporary store closures led some to conclude that the Spanish fashion multinational was preparing to exit Algeria. This is far from the truth, as Inditex has assured FashionUnited.

At the heart of the controversy lie the difficulties currently faced by Inditex's franchise partner for its operations in Algeria, as well as in other key and potential markets in North Africa and the Middle East. Azadea Group has reportedly struggled to maintain normal operations for the multinational's fashion chains in Algeria. These difficulties, to which the Spanish company remains extraneous, appear related to the complex administrative nature of the Algerian market. This can be deduced from the fact that, as far as we are aware, Azadea's operations as Inditex's master franchisee throughout the region have not been disrupted in other markets. However, in Algeria, confusion spread among the growing customer base of the Spanish multinational's brands when, upon approaching various points of sale operated by Azadea, they found not only closed doors but also empty interiors visible through the shop windows.

Adding to the uncertainty, the Algerian news outlet Maghreb Emergent, known for its critical stance against the country's political elite, echoed the bewilderment of those encountering closed Inditex stores earlier this week, a situation already highlighted on social media, reporting that Zara was suspending its activities in Algeria. In the absence of an official response, this conclusion was drawn from social media content circulating in previous days and the "temporarily closed" message displayed on the stores' Google Maps listings. These "temporary closures," they reported, affected not only Zara but all Inditex brands present in Algeria. Going further, the outlet downplayed the "temporary" nature of the closures, framing them as part of a supposed wave of closures with which Inditex aimed to shut down 1,200 stores worldwide. This information was then refuted by the same outlet, arguing that the closures could not be justified given the positive economic performance of the Spanish company. Moreover, the information is inaccurate, as it refers to the optimisation strategy that the company announced for its retail network at the end of the coronavirus pandemic, one of the most controversial points of its "Horizon 2022" strategic plan, presented by Inditex management in 2020 and already surpassed by the company in 2024.

Temporary closures due to stock issues

Given these circumstances in Algeria, which led many Inditex customers to believe the company was preparing to leave the country, FashionUnited contacted Inditex for clarification. Inditex reaffirmed its commitment to Algeria and assured that it has no plans to leave the country. While not providing further details on the reasons behind the closures, Inditex acknowledged that part of its retail network in Algeria, where the company, through its regional franchise partner, operated a total of 20 stores as of the end of its last full fiscal year on 31 January 2024, has been affected by a disruption in the supply chain to stores. They downplayed the impact, stating that only "some," and not all, of the stores operated by Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, and Zara Home have been affected. While some stores have had to close temporarily, these closures should not be interpreted as a withdrawal or an indication of the company's imminent exit from Algeria.

“Some Inditex stores in Algeria have temporarily closed due to operational issues that have hindered stock replenishment," Inditex confirmed to FashionUnited. However, despite these specific issues affecting operations in part of its Algerian network, "the Group is not considering leaving the" Algerian market. It is therefore expected that, as these stock replenishment issues are resolved, the affected stores will resume normal operations.

This article originally appeared on FashionUnited.ES. It was translated to English using an AI tool called Genesis and edited by a human desk editor.

Inditex

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