Zara owner Inditex back in profit as stores reopen

Madrid (AFP) –

Spanish textile titan Inditex, owner of global fashion retailer Zara, said Wednesday that it swung back into profit in the second quarter as it reopened most of its stores following virus shutdowns and enjoyed strong online sales.

The group, which also owns the Bershka and Massimo Dutti brands, posted a higher-than-expected net profit of 214 million euros ($253 million) in the three months from May to July.

Inditex, which runs its business year from February to January, had booked a loss of 409 million euros in the previous quarter when it was forced to close over 90 percent of its 7,000 shops around the world due to Covid-19 lockdown measures.

The second-quarter results were better analysts' expectations for net profit of some 58 million euros.

Inditex said 98 percent of its stores had reopened and that the "third quarter continues to see a progressive return to normality, with online sales growing sharply and store sales recovering gradually."

In the period from May to July, sales rose to 4.73 billion euros from 3.30 billion in the previous quarter.

For the first half, Inditex posted a loss of 195 million euros.

Internet sales surged by 74 percent during the six-month period as it began selling online in nine more countries, including Argentina and Peru.

Since 2012, Inditex has invested around 2.5 billion euros in beefing up its online sales by reducing its stock of smaller older shops and investing in larger stores in high-profile locations.

© 2020 AFP