Zara owner Inditex sees global sales top pre-pandemic levels
Zara owner Inditex – the world’s biggest fashion retailer – says sales have recovered to pre-pandemic levels over the past month, with the vast majority of its stores now open.
The Spanish group – which has nearly 7,000 shops worldwide, including around 100 in the UK – said its recovery after the COVID-19 crisis “continues to gain momentum”.
Inditex, whose brands also include Pull & Bear and Massimo Dutti, said sales between 1 May and 6 June were up by 102% on last year and 5% ahead of 2019.
Clear demand for shops after year of online growth
Chairman Pablo Isla said: “Week after week we are seeing store traffic recovering. We are seeing a progressive recovery.”
Inditex said 98% of its stores were now open.
That followed a first quarter covering the three months to the end of April, when Inditex said it was still subject to major COVID-19 restrictions which meant it lost about a quarter of trading hours.
For that three-month period, it posted sales of €4.9bn (£4.2bn) – nearly 50% up on 2020 but still 17% below pre-pandemic levels.
Profit of €421m (£362m) was better than expected and compared to a loss of €409m (£351m) in the same period of 2020, but again also shy of the group’s 2019 performance.
“The results have been materially affected by the health crisis, with temporary store closures and restrictions to operations in key markets such as the UK, France, Germany, Italy, Portugal and Brazil,” Inditex said.
For the first quarter, online sales were 67% up on the same period last year.
Inditex did not give a figure for store sales but said they had “progressively improved”.
The group said last year that it was to close up to 1,200 stores worldwide by the end of 2021. Its profits fell by 70% to €1.1bn (£946m) for the year to the end of January.
Next has also highlighted a recovery in sales after stores reopened
Chloe Collins, head of apparel at consultancy GlobalData, said: “COVID-19 continued to severely impact Inditex in Q1 as its key market Europe was badly hit by a third wave of the pandemic.
“However, as almost all stores have now reopened, and social restrictions gradually relax, Q2 results are set to show a very different story.
“This demonstrates the true potential of Inditex’s brands – particularly trophy brand Zara, which is in a prime position to benefit from the reopening of retail.”
The update comes after figures from the British Retail Consortium this week showed clothing retailers enjoyed a bounce last month as consumers sought new outfits as socialising in pubs and restaurants returned.
Last month, UK fashion group Next revealed a sharp improvement in sales in the weeks after non-essential retailers were allowed to reopen in April, citing pent-up demand.