Following a positive year, recently ended, Inditex have been implementing a few measures to cope with emergency. The former: they have postponed the group’s decision about the share of profits. The latter: they have set aside 287 million euros. For that matter, Coronavirus broke out right after the closing of the financial year (which ended, for Inditex, last January 31st). Because of such outbreak, sales have been decreasing remarkably: -24.1%, from March 1st until March 16th.
The annual financial statements
From February 1, 2019 to January 31, 2020 Inditex revenues from sales amounted to 28.286 billion euros: they therefore increased, +8%, both at current and fixed rates of exchange. Likewise, online sales enjoyed a boost, as they rose by 23% and reached, in terms of earnings, 3.9 billion euros. The Galician group’s net income eventually reached 3.639 billion euros, therefore increasing by 6%. Yet, as highlighted by Fashion Magazine, such accomplishment turns out to be below estimates provided by FactSect analysts (which amounted to 3.83 billion euros). Leaving aside the 287-million-euro fund, remarked the company, net profits would have risen by 12%. Stradivarius and Uterqüe were the best brands, in terms of performance.
Coronavirus outbreak has not spared Inditex, the biggest fashion retailer in the world. In fact, because of it, the Spanish group had to shut down almost half of their selling stores. In the first two weeks of March, sales dropped by 24.1%. “We are facing a rather unexpected and exceptional situation”, commented Pablo Isla, president of Inditex, whose variable salary he is going to receive will be reduced by half. The same applies to 21 more top managers of the enterprise. The company has recently announced they are planning to convert part of their textile manufacturing capacity, in Spain, into the production of garments for hospital staff.
In the picture, right, Pablo Isla (Imaxe Press / Shutterstock.com)