Zara owner and H&M recover from pandemic blues

  • Inditex Reports Third Quarter and Latest Sales Up 10% From 2019 Levels
  • H&M Says Fourth Quarter Sales In Line With Pre-pandemic Levels
  • Inditex’s online sales this year more than doubled compared to 2019

MADRID / STOCKHOLM December 15 (Reuters) – Sales of Inditex, owner of Zara, and rival H&M are back to pre-pandemic levels or better, as the world’s two largest fashion retailers recover demand despite supply chain challenges.

Spain’s Inditex (ITX.MC), the world’s largest fashion retailer, said on Wednesday sales at constant exchange rates rose 10% from 2019 levels in the quarter to the end of October, and continued at this rate through December 10, helped by strong online demand. Read more

Small Swedish rival Hennes and Mauritz (H&M) (HMb.ST) said sales in local currencies were at pre-pandemic levels from September to November. Read more

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“The recovery continues to accelerate,” Inditex capital markets director Marcos Lopez said in a statement.

Shares of Inditex and H&M fell around 3% at the start of trading, with the resurgence of coronavirus cases linked to the Omicron variant darkening the Christmas trading picture.

“The main short-term risk that we see for Inditex is further restrictions on stores and travel flows due to the Omicron variant, particularly in southern Europe,” said RBC analyst Richard Chamberlain.

He estimated that Inditex makes around 15% of sales from stores located in major city centers that rely heavily on tourism.

Companies are scrambling to source products and raw materials amid a strong global economic recovery as the pandemic continues to disrupt daily life in parts of the world.

Inditex, whose brands also include Massimo Dutti, Bershka and Pull & Bear, manufactures more than half of its products near its base in Spain and delivers them to consumers faster than its competitors, sparing it the worst of the crisis in Spain. the supply chain.

Inditex is starting a change of management, with Marta Ortega, daughter of the founder of billionaire Amancio Ortega, who will take the presidency next April. Read more


A building is reflected in the window of a Zara clothing store, part of the Spanish group Inditex, in Bilbao, Spain, November 30, 2021. REUTERS / Vincent West / File Photo

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The Spanish company reported sales of 7.3 billion euros and net profit of 1.2 billion euros from August to October, the third quarter of its fiscal year, in line with analysts’ expectations .

He said online sales for the first nine months of his fiscal year were up 124% from the same period in 2019, and he expected them to represent more than 25% of the total on the whole year.

“We can say that this is a very healthy development for the business globally,” said Pablo Isla, who will serve as executive chairman of Inditex until March 31.

“We have complete confidence in our unique business model,” he added in an online call with analysts.

H&M said its net sales were SEK 56.8 billion ($ 6.22 billion) in September-November, its fiscal fourth quarter.

“Customers show that they value the collections and can buy where, when and how they want,” he said.

However, the Swedish group said its business continued to be affected by the pandemic.

At the end of November, around 115 H&M stores were temporarily closed due to restrictions, mainly in Austria and Slovakia. At the start of the quarter, around 100 had been closed, mainly in Southeast Asia.

Inditex said all of its 1,975 stores are now open.

H&M warned on September 30 that sales growth in September was held back by disruptions in the global supply chain, but did not mention the problem in Wednesday’s statement. The company is due to release its full report on fourth quarter results on Jan.28.

($ 1 = 0.8872 euros)

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Reporting by Corina Pons and Anna Ringstrom Editing by Mark Potter and Keith Weir

Our standards: Thomson Reuters Trust Principles.

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