Fast-fashion giant Inditex is stepping up its investment in the United States, with the country becoming an increasingly important part of the company’s growth strategy.
The Zara owner plans to open new stores, expand existing locations and bring more of its fashion brands to major US cities as it looks to attract a broader range of shoppers.
Zara Expands Across Major US Cities
New Zara stores are planned for Denver, Phoenix and Pittsburgh. At the same time, Inditex is expanding the presence of its other brands in the US.
The group plans to introduce its premium Massimo Dutti brand and youth-focused Bershka label in New York. Both brands have already entered the US market through Miami.
The United States is currently Inditex’s second-largest market by sales after Spain.
However, the company is taking a cautious approach to expansion. Before opening physical stores in a new city, Inditex often studies online shopping activity to determine whether demand is strong enough.
CEO Oscar García Maceiras said the size and economic importance of the US market make it particularly attractive. However, the company remains focused on selective expansion and wants every store to operate profitably.
Inditex Focuses on Bigger and Better Stores
Inditex has significantly changed its retail strategy since the pandemic.
Instead of focusing on a large number of smaller stores, the company has increasingly invested in larger flagship locations in prime shopping areas.
The group now operates around 2,000 fewer stores than it did in January 2019. Overall store numbers have fallen roughly 27% from their peak.
However, total retail selling space has declined by only around 7%.
This shows that Inditex has increasingly replaced smaller locations with larger stores in stronger commercial areas.
Edward Kevis, a global equity fund manager at Aviva Investors, said the company’s growing scale has helped it secure better retail locations. These locations can generate more customer traffic while improving the overall quality of its store network.
Store Renovations Are Improving Sales Performance
Renovating existing stores has also become an important part of Inditex’s strategy.
One example is Zara’s flagship store on Oxford Street in London, which reopened in June after a five-month renovation.
According to García Maceiras, redesigned stores have produced a noticeable improvement in conversion rates.
Conversion rate measures the percentage of people who enter or browse a store and ultimately make a purchase.
Inditex Plans 20 US Projects by 2027
Inditex plans to complete around 20 expansion projects in the United States by the end of 2027.
These projects will include new store openings, expansions and renovations across Zara, Bershka and Massimo Dutti.
The company is also growing internationally.
Inditex has recently opened stores in markets including Brazil and South Korea, while continuing to invest heavily across Europe.
Europe remains the company’s largest geographical market, accounting for around 67% of total sales.
Inditex Market Value Surpasses Hermès
Inditex’s strong performance has also attracted attention in financial markets.
The Spanish fashion group, valued at around €170 billion, recently surpassed luxury giant Hermès in market capitalization.
The development comes at a difficult time for several major luxury companies.
Hermès shares have fallen sharply this year, while luxury market leader LVMH has also suffered a significant decline.
Inditex, meanwhile, has remained relatively close to the record share-price levels reached in August.
Shoppers May Be Moving Away From Luxury
One factor potentially benefiting Zara and Massimo Dutti is the changing spending behavior of middle-income consumers.
After years of price increases across the luxury sector, some shoppers may be less willing to spend heavily on expensive handbags, shoes and clothing.
Instead, consumers may increasingly mix premium products with more affordable fashion.
Massimo Dutti, for example, sits between mainstream fashion and luxury, offering products such as dresses priced around $320 and leather boots near $400.
García Maceiras suggested that consumers are increasingly combining products from several different market segments rather than relying on one brand for their entire wardrobe.
This trend could create additional opportunities for both Zara and Massimo Dutti.
Inditex Faces Competition From Shein
Inditex is also expanding its lower-priced Lefties brand, which is often viewed as a competitor to fast-fashion platforms such as Shein.
Competition in European fashion retail has recently shifted following changes to import rules.
The European Union decided to remove certain duty-free advantages previously available to low-value e-commerce parcels. The change increased pressure on companies such as Shein and contributed to higher prices for some imported products.
Inditex had previously supported the idea of creating more consistent rules between traditional retailers and international e-commerce platforms.
However, García Maceiras said the company remains focused primarily on its own operations rather than competitors.
With an estimated global fashion market share of around 2%, Inditex still sees substantial room for expansion.
US Growth Could Become Increasingly Important for Inditex
The company’s growing investment in the United States reflects its broader strategy of prioritizing larger stores, premium locations and carefully selected markets.
Rather than aggressively expanding store numbers, Inditex appears focused on improving the productivity and profitability of each location.
If its current strategy succeeds, the US could become an even more important growth engine for Zara and the wider Inditex portfolio over the coming years.
