Inditex, two decades in the United Kingdom at Brexit’s threshold

Inditex’s store number 6,000, the first Zara integrated and the first Zara Home one abroad, all opened their doors in British land. The United Kingdom has led a main role during the world’s top fashion distribution group’s history. The company celebrates this year two decades of presence in the country, but such thing is shadowed by the country’s imminent exit from the European Union.

The entrance in the United Kingdom was produced relatively late in Inditex’s history, taking into account the proximity of the market. Before jumping into British lands, where currency is a handicap compared to other European markets, the company landed in Portugal, New York, France, Mexico or even Belgium and Malta.

As usual, the company entered the country with its flagship Zara, which opened up the curtains of its first store in Regent Street, one of London’s prime commercial axis.

Inditex landed in the country back in 1998 with the first Zara opening, located in Regent Street

In 2003, it was Zara Home’s turn to disembark, which entailed the first step for its European conquest after a brief test inside a Zara store in Porto (Portugal). The group introduced the concept inside its flagship store in Brompton Road, next to the historic department store Harrods. That same year, Massimo Dutti chose Regent Street to for the opening of its biggest store in the world.

Bershka’s time came in 2005, taking the main commercial artery of the capital, Oxford Street, and two years after that Pull&Bear landed. For that case, Inditex chose to leave the capital for the first time and move towards Liverpool. Stradivarius also joined the country’s offer in 2014 through an opening in Stratford City.

London was the protagonist for a milestone in Inditex’s history the year 2012, when the group chose the British capital to open up its store number 6,000 around the world. Concretely, the level was raised through the opening of a new Zara flagship store in Oxford Street. The building that hosted the store, located in New Bonds Street’s confluence, was property of the group since 2012, when it disbursed 155 million pounds sterling for the real estate.

Today, the group has expanded all through the territory, where it adds up 108 stores (more than half belonging to Zara) and employs 5,359 workers. During the last years, the United Kingdom has been at the end of the line of the group’s target localities for openings, going from amounting up to almost ten new stores by the end of 2015, to only two in 2016. As for 2017, in line to the group’s global restructuration plan of its sales network, the company finished the year with a net closure in the country.

New formats

London has been, furthermore, the testing space for Inditex’s new retail concepts on a global scale. In 2017, the company opened in Covent district its first store dedicated to babies alone, and in 2018, the group chose the British capital to try out a new store model dedicated only to online orders. The point of sale, of ephemeral character, was opened whilst its flagship store was being restyled in the Stratford shopping centre.

The flagship reopened in May with a new concept, a hybrid between online and offline which had a specific section to do orders through the web, and an automatized collection point. Online orders are available in the store the same day, if such orders are done before the 14:00 hours, or the next day if they are done during the evening.

Online, the United Kingdom has also had a relevant role for the company. In 2013, the group chose the British pure player Asos to try for the first time distribution through third parties. Today, the company continues to be present in the platform with its brands Bershka, Pull&Bear and Oysho.

The company underlines in its annual report that uncertainty regarding Brexit has had no impact in business

The United Kingdom is at an uncertain spot. The country will leave the European Union the next 29^th of Marc at eleven o’clock in the night, and the two counterparts have already reached the beginning of an agreement. Uncertainty about the future of commercial and labour relationships continues, altogether, being one of the companies operating in the country’s main concerns, even though Inditex underlines that in that sense, Brexit has not impacted its business.

In its last annual report, Inditex claimed that “although the progress of the negotiations relating to the UK leaving the European Union continued to bring instability to the markets, its impact was not significant for the Group in 2017”.

“The changes in value of the pound sterling during the Brexit negotiations did not trigger a material increase in foreign currency risk, in view of the behaviour of the Group’s currency exposure portfolio due to its high level of diversification and the foreign currency risk management policy in place”.