Inditex earned 1,106 million euros in 2020, 70% less than the previous year. The pandemic considerably affected the textile group chaired by Pablo Isla, to the point that the lowest profit since 2006. “Financial year 2020 has been materially affected by the pandemic, with temporary store closures and restrictions on their operation,” the company explained in the results note.
The pandemic has also caused a drop in sales. Specifically, the turnover was 20,402 million euros, 28% less. They are the group’s lowest sales since 2014. The firm that owns brands such as Zara, Massimo Dutti, Bershka and Stradivarius, among others, for much of the year has had a large number of stores closed and restricted due to the health crisis.
“As of January 31, 2021, 30% of the stores were in total closure (compared to 8% at October 31, 2020) and 52% had restrictions,” the company said. «In February, an average of 21% of the stores remained closed. As of March 8, 15% of the stores were closed, “he continued. Inditex expects all its stores to be open on April 12. In addition, sales hours in 2020 have been reduced by 25% compared to 2019.
Restrictions on physical establishments boosted online sales. This grew up to 6,612 million euros, 77% more, which means that they accounted for 32.4% of total sales. Inditex’s goal was for online billing to be 25% in 2022. In this way, it exceeded this claim a year earlier.
By brand, Zara brought together most of the company’s sales, with 14,129 million euros, more than 5,000 million less than in 2019. All the group’s formats had a decrease in turnover. A) Yes, Bershka was the second best seller in 2020, with 1,772 million euros. Pull & Bear (1,425 million), Stradivarius (1,283 million), Massimo Dutti (1,197 million), Oysho (522 million) and Uterqüe (75 million).
640 fewer stores
The store optimization plan has also continued, which, according to the company, is in its final phase. This plan aims to take advantage of the commercial surface of its key establishments and eliminate those smaller stores. Thus, the gross commercial area of its key stores grew by 2%. But this has also meant that at the end of the fiscal year Inditex will have 640 fewer stores. Specifically, it had 6,829 stores. According to the company, in 2020 there were 751 takeovers, 111 openings and 96 reforms that include 45 expansions.
For its part, Inditex has reported that this year it will propose at the shareholders’ meeting to double the dividend, from 0.35 euros per share to 0.70 euros. In this way, it returns to distribute 60% of the profit among its shareholders. The dividend will be made up of an ordinary dividend of 0.22 euros and an extraordinary dividend of 0.48 euros per share. It will be paid by means of two payments, both of 0.35 euros per share, which will be made on May 3, 2021 and November 2, 2021. In addition, the remaining 0.30 euros of the extraordinary dividend of 1 euro that would be paid in 2019, 2020, 2021 and 2022 they will be paid next year.
George is Digismak’s reported cum editor with 13 years of experience in Journalism