Zara owner sees online sales almost double
Inditex, the owner of Zara, said online sales surged 95% in April as its stores were closed during the coronavirus lockdown in much of Europe.
The company said it expected part of the shift to be permanent, with a quarter of sales expected to be online in 2022, up from 14% in 2019. Even so, the firm booked its first-ever quarterly loss as sales overall dived.
Sales fell to €3.3bn (£2.9bn) for the first three months of the month, down from €5.9bn a year earlier.
That led to a quarterly loss of €409m for the Spanish firm, which also owns the Bershka and Pull & Bear brands.
“Lockdown is accelerating existing trends, forcing retailers to acknowledge the digital age has dawned,” said Sophie Lund-Yates, from stockbroker Hargreaves Lansdown.
“The Zara owners were already working towards improving their online capabilities but lockdown has ushered in a new urgency.”
She highlighted Zara’s success in managing its stock levels.
Inventory fell 10% in April, she said, “in stark contrast to the likes of M&S or Primark who have been lumbered with swollen piles of stock”.
The shares rose 2.3% in Madrid trading.
Inditex said it would spend €900m a year for the next three years on big, centralised stores and its online platform. It will close more than 1,000 smaller stores in the process.
It expects most stores to open by the end of the month, it said.
The firm has a big advantage over many High Street competitors, thanks to its cash reserves. It has €5.8bn, compared with €6.7bn last year.