Bouncing back from a loss at the start of the year, Zara owner Inditex reported 241 million euros in net profit over the second quarter, forging a path toward recovery amid ongoing disruption from the coronavirus crisis.
The Spanish fast-fashion retailer, which also owns labels Massimo Dutti, Bershka and Stradivarius, showed improvement in sales, which were down 31% in the second quarter — compared with a 44% drop in Q1 — amounting to 8 billion euros for the first half of the year. Between Aug. 1 and Sept. 6, they were down 11% in constant currencies. Online sales — a key focus for the company which has been rolling out e-commerce around the world and continues to invest in this area — continued to grow robustly, up 74% for the first half.
“I am particularly pleased with our online sales growth, which demonstrates the critical importance of our integrated store and online platform strategy,” Inditex executive chairman Pablo Isla said in a statement.
Watch on FN
He added, “This is a cornerstone of our unique business model with three key pillars: flexibility, digital integration and sustainability. Day by day, this combination is proving its solidness.”
Inditex has sprinted ahead of rivals on the digital front, outfitting stores with state-of-the-art tracking systems and offering fast delivery in urban areas. It plans to invest nearly 3 billion euros over the next two years in beefing up its digital platforms and integrating store and online stock, as it culls smaller stores and focuses on larger, spruced-up flagships.
The retailer said it recently hit the 1 million order mark in a single day for the first time and noted that since the beginning of the year, its brands reached nearly 3 billion online visits and now count 190 million followers on social networks.
Swedish rival Hennes & Mauritz AB reported improved business Tuesday, beating expectations with a forecast of returning to profitable territory in the coming months.
This story was reported by WWD and originally appeared on WWD.com.