Lockdown: Inditex (Zara) and H&M lost 266 million euros in Greece

The losses in Greek sales of the Spanish multinational group Inditex (Zara, Pull & Bear, Stradivarius, Massimo Dutti, Oysho, Bershka, Zara Home, and Uterque) and the Swedish chain H&M during the dystopian 2020 reached 266 million euros.

In total, for the year that ended January 31, 2021, the turnover of the Spanish multinational group Inditex was of the order of 328.7 million euros from 550.8 million euros in 2019, 517 million euros in 2018 and 480 million euros in the year 2017.

In absolute numbers, in 2020, the losses in the turnover of physical stores of the 7 + 1 brands of the Spanish group (the Uterque brand maintains a presence only with an online store in Greece) amounted to 222.1 million euros compared to 2019 (decrease of 40%).

However, the turnover of the Greek subsidiaries of the Spanish group does not reflect the electronic sales, as they are controlled directly by the parent company. It should be noted that before the pandemic and the launch of online sales, the group’s turnover in Greece via the internet was estimated at over 10% of the turnover of physical stores operating in the country.

Respectively, the turnover of the H&M chain, which has a much smaller number of stores in Greece compared to the Inditex group (35 vs. 162), recorded a drop of 24%.

According to the financial statements of the Swedish group, the total sales in Greece in the year ended November 30, 2020 amounted to 1.426 billion Swedish kronor (140.54 million euros) from 1.869 billion euros (184.2 million euros) in 2019, with losses due to the pandemic reaching 44 million euros.

The chain lost another 22 million euros in sales in the first quarter of the current year, which includes the period December 1, 2020 – February 28, 2021, during which time the presence of the COS mark in the domestic market and through a physical store was launched.

In any case, despite the heavy losses, the two multinational groups maintain their leading position in the Greek clothing market without being threatened by Greek clothing chains.

It is characteristic that the 106 largest clothing companies in the country, according to data from the Association of Knitting and Ready-made Garments of Greece (SEPEE), show a turnover of 677.3 million euros (2019 data), while only the Inditex group and H&M had a turnover of € 735 million.

Change of strategy

For the post-covid era, Spanish group Inditex is changing its strategy in the Greek market, based on the restructuring plan followed worldwide.

Thus it proceeded to merge all its subsidiaries in Greece (Massimo Dutti, Bershka, Oysho, Pull & Bear, Stradivarius, Zara Home and Uterque), through their absorption by Zara Hellas.

The new company has the name “ITX HELLAS SOLE SHAREHOLDER SA”

According to the company’s announcement to the General Index of Enterprises, the merger is deemed expedient and advantageous in order to reduce operating costs and achieve synergies to cope with the ever-increasing competition more effectively .

“In particular, the group is in the process of corporate restructuring worldwide with the main goal of simplifying and streamlining its organization, functionality and management, by concentrating all commercial activities into a single legal entity per market,” it said.

In this way, Zara Hellas will more decisively promote the business plan that it had prepared before the pandemic, with the aim of creating large stores that will offer a full range of products and services based on new technologies.

Last year, the Inditex group made investments of 9.8 million euros, mainly for the modernization of its network, which numbers – for all 7 chains – 162 stores, three less than in 2019.

At the end of the year, the group in Greece employed a total of 3,307 employees from 3,956 in 2019, in addition to the central administration staff.