World’s largest fashion conglomerate, Inditex has reported its first loss in the 2 decades of it going public.
Posting a 44 per cent decline in turnover for the first quarter to €3.3 billion, Inditex has been hit hard as around 88 per cent or 6,000 of its 7,000 global stores were closed due to the pandemic.
The saving grace for the company has been its e-commerce business which rose 50 per cent during lockdowns, specifically rising 95 per cent in April.
Last year, 14 per cent of Inditex’s revenue came from its e-commerce business. The Spanish retailer is aiming to change that to get a quarter of its revenue from online sales by 2022.
In an effort to get a headstart on its competitors, Inditex is planning to invest US $ 3 billion in e-commerce operations of brands like Zara and Bershka along with spending on upgrading stores to be larger and have higher quality to achieve higher levels of profitability.
The best performing stores of the firm will be expanded to integrate the latest technologies and about 1,000-1,200 smaller sized stores which account for only 5-6 per cent of the total sales will be absorbed.