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Fashion retailers not only have to keep up with quickly shifting fashion trends but also with changes in the way consumers like to shop. Three giants of fashion retail, Inditex (owner of Zara, Bershka etc.), H&M and Fast Retailing (owner of Uniqlo) have closed stores in the last few years. The closed stores saw their sales decline or did not reach profit margin ambitions. The main culprit is online shopping. That being said, part of their own sales shifted online, but they also face new competition from the likes of Shein, Temu and Zalando. Despite store closures Inditex and Fast Retailing have grown their selling space by closing many smaller stores and opening fewer larger stores or expanding existing stores. After several years of stores closures and substantial investment in their digital capabilities, some incumbents might find themselves in the rather strong position of having an omnichannel business model.

Source: company annual reports, April 2024