Inditex, the parent company of clothing chain Zara, has entered into an agreement to transfer its store operations in Argentina and Uruguay to Regency Group, Reuters reported.

Under the terms of the agreement, Zara’s 15 stores in the two countries will now be operated by the Panama-based real estate developer under a franchise model.

These stores have been directly operated by Inditex over the past 25 years.

Regency Group will also retain all 1,000 employees working for Inditex in Argentina and Uruguay.

Besides the two countries, the Panama-based company has been operating Zara’s store network in other parts of South America, including in Colombia, Peru, Panama, Ecuador and Paraguay.

The transfer of store operations comes as Inditex continues to restructure its store network.

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Since 2022, the company has reduced its number of stores by 11% to 5,801 across the globe by reducing the count of smaller outlets and expanding flagship stores, the media outlet reported.

Last year, Inditex also shuttered all of its stores that are operated under a franchise model in Venezuela.

In the US, the company directly operates 601 stores and 156 under a franchise model, Reuters reported, citing Inditex’s 2022 annual report.

Earlier this year, Inditex said that it planned to open 30 new Zara stores in the US from 2023 to 2025.

It will include bigger stores in New York, Chicago, Miami and other cities.

Last month, the Spanish clothing company and retailer reported that its net income rose by 54% to €1.2bn ($1.28bn) in the first quarter (Q1) of fiscal year (FY) 2023.