It isreported that fast fashion giant ZARA will be opening discount stores in China to digest inventory as Italian brand agent Mario Company said that Inditex, parent company of Zara has authorized it to open discount stores in China.

However, Inditex and Zara (China) haven’t confirmed this news and have emphasized that their outlets in China are all regular chain stores without any franchising and agent business.

“Zara is always low-profile,” said the principal of Mario Company. “But the authorized discount stores will go together with regular chains in China.”

According to the principle, Mario’s headquarters in Milan obtained the authorization from Inditex last October and has started this program and signed contracts with Chinese companies in Guangzhou, Zhejiang and Shangdong.

The authorized discount stores can sell Zara and other brands of Inditex including Massimo, Dutti, Pull and Bear, and Bershka with an average wholesale price of 45 yuan each, Mario Company’s principal explained.

According to the detailed regulations for Zara’s authorized discount stores provided by Mario Company, the discount stores should open 70 kilometers away from the regular Zara stores without the Zara logo on the gate. Moreover, products provided in discount stores cannot be sold on the Internet. However, the store decoration can be completely similar to regular stores and the logo of other Inditex brands are permitted as well.

The updating cycle of Zara’s products is generally about ten days while the shortest cycle is one week, which cannot be reached by most Chinese outlets, one insider told Beijing Business Today.

Moreover, Inditex has opened discount stores – Lefties in Portugal - to digest inventory, said Ma Gang, independent apparel industry commentator. But this as well has yet to be confirmed by Inditex.

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