Zara's flagship in Milan.
Courtesy Photo
PARIS — Zara owner Inditex reported sales are improving despite ongoing store closures in important markets as it reported 1.1 billion euros in annual net profit, showing how the nimble, tech-savvy retailer has drawn on its digital prowess to navigate the pandemic.
Sales were down 4 percent in the first week of March, and down 15 percent for the month of February, showing improvement from a 28 percent decline for the year ending Jan. 31.
Excluding the five major markets where lockdown measures are in place — Germany, Brazil, Greece, Portugal and the U.K. — sales were up 2 percent in the first week of March, offering a snapshot of consumer demand.
“Inditex as a company is stronger today than it was two years ago, with a unique business model and a global, flexible, digitally integrated and efficient sales platform,” Inditex executive chairman Pablo Isla said in a statement. Isla added that the digital efforts places the company “in an excellent position for the future.”
The Spanish retailer, which also owns labels Massimo Dutti, Bershka and Stradivarius, turned the corner in the second quarter, bouncing back from a loss at the start of last year.
Annual sales came to 20.4 billion euros, a 25 percent decline excluding currency impact. The performance was spurred by online sales, which rose 77 percent in local currencies to 6.6 billion euros. The company, which has sped past rivals on the digital front, has been expanding internationally, and launched online sales platforms in 25 new markets, while opening new stores in 29 new markets.
Inditex has rapidly rolled out an integrated stock management system in thousands of stores around the world, a move the company flagged as playing a key role during the pandemic.
Rival H&M’s end-of-year results beat expectations, but company projections were weaker than expected as store closures continue to weigh.
