By John Smith • 18 September 2020 • 14:39
NORMALLY at the forefront of profitable Spanish Companies, the Inditex Group, has taken a huge hit from the Covid-19 pandemic with a 37 per cent sales drop to €8 billion in its first 2020 six-month financial report.
Sales for the same period last year were €12.8 billion which shows the dramatic affect that the lockdown had on the company’s turnover and they are showing a €198 million loss compared to a €1.5 billion profit.
Each one of its brands, Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Uterqüe experienced reductions in sales ranging from 25 per cent to 50 per cent but executive chairman Pablo Isla says that he is “particularly pleased with our online sales growth, which demonstrates the critical importance of our strategy to integrate store and online. This is a cornerstone of our unique business model.”
There are some positives however as operating costs were reduced and online sales grew significantly but because Inditex is now international with stores in 86 countries, the sudden closure of the majority of them and the lack of online options in some have contributed to the drop in sales.
The good news continues with the fact that after re-opening the majority of its stores (98 per cent) the second quarter of the year saw it return to profit with a positive contribution of €214 million and its ‘piggy bank’ has amassed €6.5 billion so it certainly looks safe and sound for the future.
Despite the short-term losses, the company continues to support charitable causes and during that period donated clothing through UNHCR to refugees in Rwanda as part of the humanitarian relief effort there and supplied machines for the mass manufacture of masks to Galicia’s association for the disabled, COGAMI.
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Married to Ophelia in Gibraltar in 1978, John has spent much of his life travelling on security print and minting business and visited every continent except Antarctica.
Having retired several years ago, the couple moved to their house in Estepona and John became a regular news writer for the EWN Media Group taking particular interest in Finance, Gibraltar and Costa del Sol Social Scene.
Currently he is acting as Editorial Consultant for the paper helping to shape its future development.
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