Coronavirus Outbreak: Zara owner Inditex books first quarterly loss of $465 mn amid global lockdowns

Zara's online sales, however, had surged in the meantime, rising 95 percent in April

Reuters June 10, 2020 13:43:58 IST
Coronavirus Outbreak: Zara owner Inditex books first quarterly loss of $465 mn amid global lockdowns

Zara owner Inditex (ITX.MC) booked its first quarterly loss on Wednesday after the coronavirus crisis forced it to shut almost 90 percent of its stores in the three months from February to April.

(Click here to follow LIVE updates on coronavirus outbreak)

Inditex, the cash-rich owner of other brands such as Massimo Dutti and Bershka, said the rapid drop in sales had slowed, with sales at constant currencies falling 34 percent in the 2-8 June period compared to a year earlier versus a 51 percent slide in May.

 <span class=Coronavirus Outbreak Zara owner Inditex books first quarterly loss of 465 mn amid global lockdowns" width="1200" height="630" />

Zara Stores. Image via Twitter

In markets where stores were already open, sales were down 16 percent during 2-8 June, it said. The Spanish company said it expected stores in all key markets to open by the end of June.

It said online sales had surged in the meantime, rising 95 percent in April.

Clothes retailers from H&M (HMb.ST) to Gap Inc (GPS.N) have all reported a sharp drop in sales as shoppers hunkered down at home during global lockdowns to halt the spread of the coronavirus .

Inditex booked a net loss of 409 million euros ($465 million) after sales tumbled to 3.3 billion euros, down from 5.9 billion euros in the same period a year earlier.

Rival H&M warned in April it would make its first quarterly loss in decades in March-May, the company’s fiscal second quarter.

Inditex said it would invest 900 million euros a year in the next three years to accelerate its strategy of focusing on large stores in prime shopping areas and in its online business, while closing 1,000 to 1,200 of its smaller stories in 2020 and 2021.

It said it expected online sales to account for more than a quarter of business by 2022, compared to 14% now, while total shop floor space would grow by about 2.5% a year during the 2020-2022 period with its focus on larger stores.

Updated Date:

also read

Disney revenue plummets 13 percent since 2020; streaming service records 'slower than expected' growth after pandemic boost
Entertainment

Disney revenue plummets 13 percent since 2020; streaming service records 'slower than expected' growth after pandemic boost

Disney said it was seeing "encouraging signs of recovery" across a wide range of its businesses even while its streaming television service grew slower than expected in the second quarter.

J Balvin says he 'almost died' of COVID-19: 'Don't want people to feel what I felt'
Entertainment

J Balvin says he 'almost died' of COVID-19: 'Don't want people to feel what I felt'

J Balvin, who was diagnosed with coronavirus in August 2020, shared his experience at the Global Citizen's Vax Live concert

'Don’t think I’m a loser': Glenn Close opens up on scoring most Best Actor Oscar nods with no win
Entertainment

'Don’t think I’m a loser': Glenn Close opens up on scoring most Best Actor Oscar nods with no win

"You’re there with five other people, honoured for the work that you’ve done. What’s better than that?," says Glenn Close, who's earned eight Oscar nods in her career.