Zara owner hit H&M rival: Sales return to pre-COVID pandemic – News source

Zara fashion brand owner Inditex has overtaken Swedish rival H&M in its efforts to recover from the coronavirus crisis, with second-quarter sales rising above pre-pandemic levels, Reuters reports, according to news.ro.

The quarterly sales of the world’s largest retailer exceeded pre-pandemic levels as most stores reopened and people rushed to renew their wardrobes after stores closed to stop the virus from spreading. Sales of competing company H&M recorded an increase in expectations in the quarter ended in August and remained below the pre-pandemic level.

H&M said the restrictions hindered its development, especially in Asia.

Pablo Isla, Inditex’s chief executive, said in-store and online sales are gradually recovering for all brands and markets, despite restrictions in Asia due to the pandemic.

“We had a strong start to the fall-winter season. Inditex’s competitive distance is greater than ever,” he said in a conference call.

Analysts say consumers have recently shifted spending to focus on clothing, as large cities are slowly returning to normal and most restrictions are lifted, a trend that benefits Inditex brands, including Zara and Massimo Dutti, among others.

The Spanish company’s net profit in the second quarter, of 850 million euros, was higher than the 214 million euros ($ 181.14 million) recorded in the same period in 2020 and 4% higher than the profit in 2019.

Inditex said sales accelerated in May-July to 6.99 billion euros, 7% more than in the same period in 2019, as shoppers began buying clothes for social events again. summer.

Sales in the second quarter were in line with the 7.02 billion euros anticipated by analysts surveyed by Refinitiv.

Inditex said in-store and online sales at constant exchange rates in August and the first week of September were 22% higher than a year ago and 9% higher than the same period of 2019.

During the pandemic, Inditex strengthened its digital retail platform and closed its smaller retail outlets around the world in favor of expanding flagship stores capable of operating as mini distribution hubs.

Inditex said 99% of all its stores have reopened and currently operate 6,654 stores worldwide, compared to 7,337 stores a year ago.

President Isla said one of Zara’s largest stores will open in Paris by October, and the Uterque brand will integrate into Massimo Dutti stores by next year, as part of a digital transformation strategy he said will be accelerated. .

Inditex’s online sales rose 36% in the first half of the year compared to the same period in 2020, when restrictions on mobility in key markets, including the UK, Germany and France, forced shoppers to buy from home.

The company expects online sales to exceed 25% of total sales this year and will launch a men’s sports collection under the name Zara Athleticz at the end of September.

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