By Corina Pons
MADRID (Reuters) - Zara owner Inditex (BME:ITX) said on Thursday it had reached an initial agreement to transfer the operation of its stores in Argentina and Uruguay to Regency Group, which already runs other parts of its Latin American network.
The 15 Zara stores in the two countries, where Inditex has been operating directly for the past 25 years, will now be run under a franchise model by Panama-based Regency Group, Inditex said in a statement.
The 1,000 employees who worked for Inditex in Argentina and Uruguay will be contracted to Regency Group, which already manages Zara's stores in Colombia, Peru, Panama, Ecuador and Paraguay.
Inditex has reduced its number of stores by 11% to 5,801 worldwide since 2022, cutting smaller outlets worldwide in favour of expanding flagship stores.
In 2022, Inditex closed all its stores in Venezuela after years operating under a franchise model.
The company was directly operating 601 stores in America and 156 under a franchise model, according to its 2022 annual report.
Inditex said in March it will expand its network in the U.S. with 30 new Zara stores planned from 2023 to 2025, including bigger shops in New York, Chicago, Miami and other cities.