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Zara's `Treasure Trove' Stores Not So Good for Online Shoppers

Zara store | Source: Shutterstock Zara's `Treasure Trove' Stores Not So Good for Online Shoppers The shift to online shopping exposes issues with the fashion retailer’s fit, product quality and online service. MADRID, Spain — The shift to internet shopping isn’t playing to the strengths of Zara as it’s exposing issues with the fashion retailer’s fit, product quality and online service, according to Credit Suisse analyst Simon Irwin. Comments about Zara products “are poor and declining” on consumer-review websites Trustpilot and Sitejabber, the analyst wrote in a note previewing owner Inditex SA’s first-half results on Sept. 12. “We believe the ‘treasure trove’ nature of a Zara shop is still a better experience off-line,” Irwin wrote. While online is driving like-for-like sales growth, that can have a negative impact on gross margin, he also said. Inditex shares are coming off their worst week in seven years. The broker estimates that the Web will represent about 10 percent of Inditex’s sales this year, up from 2.4 percent in 2013. It also expects 2018 to be the sixth consecutive year of Ebit margin decline. Inditex shares had their worst week in seven years last week, falling 8.7 percent after Morgan Stanley published a scathing report saying the retailer has gone from great to good.

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