Zara parent posts US$229m first-half loss during Covid-19

Zara-owner Inditex posted a net loss of US$229 million during the six months to 31 July, after a successful second quarter largely helped mitigate a disastrous start to the year.

The first three months suffered a $481 million loss due to the sudden impact of the Covid-19 pandemic, while the second quarter rebounded to a profit of $253 million.

Online sales soared 74 percent during the same period, as with many businesses during the pandemic, as customers moved online while up to 87 percent of the business’ stores were closed.

Inditex executive chairman Pablo Isla said he is pleased with the online result, and that it shows the importance of an integrated omnichannel strategy.

“This is a cornerstone of our unique business model with three key pillars – flexibility, digital integration, and sustainability,” Isla said.

“Day to day this combination is proving its solidness.”

The third quarter has continued to see a return to normalcy, the business said. Online sales have continued growing sharply, while store sales are recovering. Sales from August 1 to September 6 are improving, however down 11 percent year on year.

And a number of new omnichannel initiatives that launched in the first half will be furthered moving forward, such as a plan to shut down smaller stores and absorb them into larger format locations that lend themselves better to an integrated model.

During the first half 72 stores were refurbished, 35 of which were store expansions.

Last week the business launched ‘Store Mode’, which saw 25 of its stores across Spain offer new features to customers using the Zara app: Click & Go, Click & Find, and Click & Try.

Click & Go allows a click and collect offer that will see a product ready to be picked up within 30 minutes, Click & Find allows customers to find garments in-store using a RFID-enabled store map, while Click & Try allows customers to book time in a fitting room to avoid waiting.