The world's largest fashion group Inditex reports losses despite significant growth in online sales.
The company reported a net loss of 409 million euros in the period from February to April 2020, compared to a net profit of 734 million euros for the same period in 2019, according to the quarterly report. During this period, sales fell to 3.3 billion euros from almost 6 billion euros in the first quarter of last year. The amount of losses also includes the amount of 308 million euros allocated to the store optimization program, which will continue until 2021, despite the pandemic.
The losses began despite an increase of 50 percent in online sales in the first quarter and 95 percent in April. Even this rapid growth was not enough to cover all the losses. Inditex expects online sales to be over 25% of total sales by 2022. By comparison, online transactions accounted for 14% of net sales at the end of 2019.
Some countries have begun phasing out quarantine measures, but social distancing measures are still in place that prohibits large crowds of people in the same place. This allowed sales to increase, but the increase was not sufficient to avoid losses. As the company itself claims, sales "have not yet reached normal levels". At the end of April, Inditex opened 965 stores in 27 countries out of a total of 7469 stores (as of the end of 2019).