The Covid-19 effect is real
Another solid proof that the pandemic really did send shockwaves throughout global retail and supply chain. Spanish fashion empire, Inditex Group, which owns Zara has posted a staggering net loss compared to its usual quarterly wins.
Founder Amancio Ortega Gaona oftens leads the billionaires list, consistently landing the top 10 spot on the Forbes list.
Inditex reported a net loss of 409 million euros ($465 million) for February through April, in comparison with a net profit of 734 million euros during Q1 2019.
Sales fell to 3.3 billion euros from nearly 6 billion euros in the first quarter of last year.
The significant losses comes at a time where online sales are surging 50%, though. In April, the group saw a 95% jump in online sales. This is not surprising, considering most retailers were closed that month.
At the end of April, Inditex had 965 stores open in 27 countries, out of a total of 7,469 stores it has globally. Despite a jump in sales during May, Inditex said they are “not yet at normal levels.”
What else? The group also plans to close stores, in line with its strategy for 20020-2022.
Inditex will close between 1,000 and 1,200 stores in the years 2020 and 2021, with special focus on closing stores where sales can be recaptured in nearby stores and online.
Its three areas of focus are digitalization, integration between stores and online, and sustainability.