Zara Owner Inditex to Close All Stores in Venezuela, Local Partner Says

A man walks past a Zara retail store, with its shutters drawn, at a mall in Caracas September 30, 2014. (Reuters)
A man walks past a Zara retail store, with its shutters drawn, at a mall in Caracas September 30, 2014. (Reuters)
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Zara Owner Inditex to Close All Stores in Venezuela, Local Partner Says

A man walks past a Zara retail store, with its shutters drawn, at a mall in Caracas September 30, 2014. (Reuters)
A man walks past a Zara retail store, with its shutters drawn, at a mall in Caracas September 30, 2014. (Reuters)

Inditex, owner of brands including Zara, Bershka and Pull & Bear, will close all its stores in Venezuela in coming weeks as a deal between the retailer and its local partner Phoenix World Trade has come under review, a spokesperson for Phoenix World Trade said.

Phoenix World Trade, a company based in Panama and controlled by Venezuelan businessman Camilo Ibrahim, took over operation of Inditex stores in the South American country in 2007.

"Phoenix World Trade is re-evaluating the commercial presence of its franchised brands Zara, Bershka and Pull & Bear in Venezuela, to make it consistent with the new model of integration and digital transformation announced by Inditex," the company said in response to a Reuters request. "The five stores which remain open… will cease to operate in coming weeks".

Spanish group Inditex did not respond to Reuters' request for information about the closing measures.

The closures come as Inditex, the world's largest clothing retail group, scales back smaller outlets worldwide in favor of expanding flagship stores, with 1,200 closures expected by the end of 2021.

Up to 700 stores are due to close in Europe, as well as 100 in the Americas and 400 elsewhere in the world.

In at least three large Venezuelan malls, the spaces formerly occupied by Zara and Pull & Bear - another Inditex brand - are empty, said two local retail executives. Both spoke on condition of anonymity as they were not authorized to talk publicly about the decision.

In the capital, three stores have closed in May, according to Reuters witnesses. The Zara stores open until last week in Caracas were offering items from the spring collection.

Ibrahim became Inditex’ local partner in 2007 to assist in dealing with changing local regulations and keeping shelves stocked as socialist former President Hugo Chavez' government exerted tight control over the foreign-exchange market, and businesses needed approval from the government to buy the dollars needed to import clothing.

That occasionally left clothing stores empty as businesses struggled to obtain hard currency.

Despite the decision to shut Zara locations, Venezuelan businessmen are currently allowed to import goods and sell them at hard-currency prices, a break from years of price controls on many key items. Luxury stores known as bodegones, and coffee shops that advertise prices in dollars, have surged as part of a chaotic economic liberalization.

The white walls blocking the entrance of a closed Zara store in Caracas announce the upcoming opening of a store by the name of Lola, an unknown brand in the country. According to local sources, Ibrahim's group will reopen those stores, without the commercial agreement with Inditex.



LVMH Posts 3% Drop in Sales as Core Business Slumps

The logo of LVMH Moet Hennessy Louis Vuitton is seen in front of the LVMH luxury group headquarters in Paris, France, April 14, 2025. (Reuters)
The logo of LVMH Moet Hennessy Louis Vuitton is seen in front of the LVMH luxury group headquarters in Paris, France, April 14, 2025. (Reuters)
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LVMH Posts 3% Drop in Sales as Core Business Slumps

The logo of LVMH Moet Hennessy Louis Vuitton is seen in front of the LVMH luxury group headquarters in Paris, France, April 14, 2025. (Reuters)
The logo of LVMH Moet Hennessy Louis Vuitton is seen in front of the LVMH luxury group headquarters in Paris, France, April 14, 2025. (Reuters)

LVMH, the world's largest luxury group, said on Monday sales fell 3% over the first quarter, missing expectations and confirming a sector slowdown as shoppers held back on purchases of designer fashion in a choppy economic environment.

The French company behind high-end labels including fashion houses Louis Vuitton and Dior, jewellery brand Bulgari and Hennessy cognac, reported sales for the three months to the end of March of 20.3 billion euros ($23.08 billion).

The result compares with 1% growth in the fourth quarter and analyst expectations for 2% growth in the first quarter of 2025, according to a VisibleAlpha consensus estimates.

The fashion and leather goods division, home to Louis Vuitton and Dior and accounting for nearly half of group sales and over three quarters of operating profit, posted a 5% fall in sales, well below expectations for a flat performance.

LVMH said fashion and leather goods sales saw a "slight decline" in the US while Japan was weaker than the comparable quarter a year ago when Chinese led growth in spending there.

Europe's luxury players were counting on wealthy Americans to reignite growth for the sector at the start of this year as the outlook for China, another crucial market, remained bleak.

But as fears of a US recession are on the rise after President Donald Trump's recent tariff announcements sent stock markets and the dollar plunging, the sector is bracing for what could be its longest slump in years.

The luxury sector, selling prized items to rich shoppers at high margins, is better positioned than other industries to use its pricing power to shield profits against Trump's tariffs, which would include a 20% charge on European fashion and leather goods and 31% for Swiss-produced watches if fully applied.

Last week, Trump paused most of his tariffs for 90 days, setting a general 10% duty rate instead.