Inditex chairman calls for calm as Covid-19 takes its toll
On the morning of Wednesday 18 March, Inditex presented what are probably the most bittersweet results in its history. After seeing record revenues of 28.28 billion euros last year, the group is preparing to fight the impact of the coronavirus pandemic. A 278 million euro provision has been booked as a result of the outbreak.
“We are experiencing a temporary but very significant change,” said Pablo Isla during a conference call for investors.
“We want to express our solidarity with all those affected. Our priority is the safety and health of our communities and employees,” he continued, expressing his “heartfelt gratitude for the total dedication of our employees during this period.”
Speaking about 2019, the executive chairman said it was a year of “strong operating performance.” But he added that “early 2020 has been highly impacted by the coronavirus pandemic”, although it is still “too early” to assess the future impact of the disruption on the operations of Arteixo-based business.
“We have full confidence in the strength and flexibility of the business model. We continue to drive our long-term strategy, integrating store and online,” Isla continued. And he insisted: “We have a lot of confidence in the integrated model.”
In view of the current uncertain situation due to the Covid-19 pandemic, the company said it is not the right moment to propose a dividend payout. Consequently, the net income generated will be allocated to reserves, and a final proposal on dividends will take place at a board meeting later this year.
“We are in an unexpected situation, with many stores closing in numerous markets. We continue to offer our customers the option of buying online and we are focused on further developing our online business at this time,” said Isla.
Additionally, the company has announced that, in light of the nation-wide lockdown imposed by the Spanish government on Saturday, Pablo Isla committed to protecting jobs as a key priority for the business. Inditex will analyse all resources announced by the government to support small and large businesses during the lockdown.
At the same time, the group said its logistics, supply and commercial infraestructures have been offered to support the Spanish government’s work to curb the spread of the virus. This will apply to shipments of health equipment and textile materials from China, with “at least one” shipment taking place per week. So far, Inditex has donated 10,000 face masks and by the end of the week, the company plans to distribute another batch of 300,000 masks.
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