Zara ower Inditex has stolen a march on arch-rival H&M after sales and profits soared to record highs.
Inditex surged ahead in the battle between the world’s two biggest fashion retailers as sales hit £6billion in the three months to July. This was 7 per cent above the same period of 2019.
By contrast, sales of £4.7billion at H&M in the three months to the end of August were down 11 per cent on the pre-Covid equivalent two years earlier.
The right look: Inditex surged ahead in the battle with arch-rival H&M as sales hit £6bn in the three months to July. This was 7 per cent above the same period of 2019
Profits at Spanish group Inditex, which also owns Massimo Dutti and Bershka, rose to £726million as online sales soared and shops stayed open in key markets.
Analysts said it was helped by a long-running strategy to map its inventory, so that it knows where clothes and homeware products are located in its various stores.
This speeds up the time it spends completing online orders because it can send goods from stores rather than just warehouses.
But Swedish behemoth H&M languished as troubles in Asia offset a return in trading to pre-pandemic levels in Europe and the Americas.
The group, which also owns Cos and Monki, said 100 stores were temporarily closed at the end of August. It said: ‘Lockdowns and restrictions have continued to hamper development, particularly in Asia.
‘As restrictions have been eased, sales in store have picked up in many markets while online sales have continued to increase.’
Store reopenings have boosted retailers since tough restrictions were lifted across the West – but online sales are still growing.
Inditex estimated digital sales will make up 25 per cent of revenue this year, while H&M said online trading was up 40 per cent in the most recent quarter.
Harry Barnick, analyst at Third Bridge, said Inditex was an ‘early winner in the post-Covid retail world’.
Anne Critchlow, analyst at Societe Generale bank, said: ‘Sales are ahead of where they were in real terms two years ago and I don’t think many retailers have reached that position at this point.’
She said that Inditex had ‘fewer, bigger stores that are likely to sell through stock more efficiently’.
