Zara Owner Inditex's Profits Fell 70 Percent Due to Coronavirus
The fashion industry continues to be hit hard by the coronavirus pandemic. Retail giant Inditex, which owns brands Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, and Uterqüe, reported that its net profit plunged by 70 percent in 2020 to €1.1 billion ($1.31 billion).
The annual report, released on Wednesday, details that trading hours in-store were down by 25.5 percent in 2020, while 30 percent of stores worldwide remained closed by January 31.
Despite the disruption caused by the pandemic, Inditex is optimistically shifting to online sales. In 2020, Zara launched online in 25 markets including the Philippines. The online sales came to a total of €6.6 billion ($7.8 billion).
In a conference call with analysts, Inditex executive chairman Pablo Isla said: "We can say that as a company of course we can do everything online, online sales can increase, we controlled cost evolution and we ran the company in an efficient way. We have seen that the only thing that we cannot do is to sell in the stores when the stores are closed because of the pandemic, but as soon as the stores reopen the level of sales becomes very healthy."
In June 2020, the retailer announced that it was closing down 1,200 stores worldwide due to the effects of the pandemic. As of writing, 15 percent of Inditex's stores are still closed due to restrictions.