Inditex leaves Spain out, for the moment, of the charge for the return of online purchases
Inditex has presented this Wednesday its results for the first quarter of its fiscal year, which has closed with record figures. Its benefit has shot up 80%, to 760 million euros; and its sales, 36%, to 6,742 million. It is the first financial data of Oscar Garcia Maceiras as CEO of the owner of Zara; and of Martha Ortegaas non-executive president of the company.
Goodbye to the traditional store: self-checkout, reservation of fitting rooms by app and robots to pick up orders
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Beyond the raw data, the appointment with the Inditex market also serves to find out where the company's strategy is heading for the coming months and in a tense global situation after Russia's invasion of Ukraine, which forces Inditex to not operate in both markets. Also, with inflation skyrocketing on a global scale.
In this context, the multinational gives clues as to where its business is going. One of them is that, at the moment, Spain is not among the countries where it charges for the collection of garments that are purchased online and are returned from homes or delivery points.
A strategy that began in South Korea and that already extends to 38 countries -it is in 200 markets-, where it charges 1.95 euros (or the equivalent in its local currency) to collect these garments. On the other hand, it does not charge if they are returned to the store.
Search for “efficiency and sustainability”
“The reason is to seek greater efficiency in income and sustainability. The answer is positive, there is no impact on sales. There are more returns in the store”, assured Marcos López, director of Capital Markets at Inditex, during the conference with the analysts who follow the evolution of the company. “It is a measure that can continue to make the industry more efficient and sustainable.” At the moment, according to the group, Spain is not included in this strategy.
This step is taken at a time when online sales have hit the brakes, after taking off in the first quarter of 2021, when there were more restrictions in physical stores due to the pandemic. "Online sales at a constant exchange rate have been 6% lower due to the strong comparable," he points out in his presentation of results, referring to the 67% growth registered in the first quarter of 2021. "The sale is expected to online exceeds 30% of total sales in 2024”, he adds.
Another future issue is the impact of inflation. In the last presentation of results -even with Pablo Isla as president- the parent company of Massimo Dutti, Bershka or Pull & Bear already announced that the multinational would make selective price increases to protect its margins. An increase that, on average, in Spain would be around 2%. A price rally that has been followed by other companies, such as the low-cost chain Primark.
This Wednesday, García Maceiras has once again indicated that Inditex will carry out price adjustments by format and product and depending on each country, "in certain markets", he has indicated. In any case, he has clarified, they will be in single digits and do not imply a change in their pricing policy.
Regarding the situation in Russia and Ukraine, the Arteixo group indicates that "it has decided to fully provision the estimated expenses for the 2022 financial year" in both countries, which has entailed an "extraordinary charge of 216 million euros" . Only in Russia, the group had more than 500 establishments, which it decided to close at the beginning of March.
