Zara owner closes 3,785 stores globally after sales plunge
The owner of Zara has closed 3,785 stores globally following the outbreak of coronavirus.
Inditex, the Spanish owner of the high street retailer, warned the pandemic has had a “very significant impact” on its operations.
It said it is currently “too early” to quantify the future impact of the outbreak on its operations for the rest of the year, but it is “fully confident” in the strength and flexibility of its business model.
Group sales tumbled by 24.1% in the first two weeks of March as it was impacted by the raft of store closures.
It said it would therefore book a provision of £262.9 million as the outbreak reduces the value of its inventory for the spring/summer period.
Inditex also postponed its decision over whether to pay out a dividend until later in the year.
It has temporarily shut all its stores in Spain, where it has its largest network of sites, after the country’s government launched a nation-wide lockdown on Saturday.
The update came as the retail giant reported a jump in sales and earnings for the year to January 31.
It said net sales increased by 8% to £25.9 billion as it was boosted by a 23% surge in online sales.
Meanwhile, the company’s earnings before tax and interest increased to £7 billion from £5 billion in the previous year.