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Zara owner Inditex has said that profits have plunged after surging online sales failed to offset the impact of enforced store closures and weak demand.
The Spanish fashion giant, which also runs the Bershka and Pull & Bear chains, told investors that net profits slid by 70% to 1.1 billion euro (£940 million) in 2020 in a heavier decline than previously predicted.
The group said this slump was driven by lower sales, with total revenues falling by 28% to 20.4 billion euro (£17.5 billion) due to closures.
It said it saw a particularly heavy impact on revenues in the fourth quarter as many countries re-imposed restrictions on non-essential stores.
Inditex’s UK stores all remain shut and are expected to reopen from April 12 at the earliest, after the Prime Minister mapped out his plan for reopening large swathes of the economy.
It said that 15% of its global stores are still shut to customers due to the pandemic.
The fashion firm said online sales surged by 77% in 2020 as many customers moved online in the face of the shutdown, but this was unable to offset lost store sales.
Pablo Isla, executive chairman, said: “Inditex has emerged stronger after such a challenging year thanks to the amazing commitment displayed by everyone here at the company.
“Inditex as a company is stronger today than it was two years ago, with a unique business model and a global, flexible, digitally integrated and sustainable sales platform, which places us in an excellent position for the future.”
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Inditex has managed to deliver a sophisticated integration of physical and virtual stores which has been crucial in boosting profitability.
“The fact that Inditex still managed to ring up more than 20 billion euro in net sales is no mean feat, when so many of its stores were shuttered for weeks at a time.
“With all doors expected to be flung open once more in April, it will be all systems go, with the brands expected to get another lift from shoppers desperate for a real retail experience once more.”