Zara owner Inditex has reported sales surpassing pre-Covid levels but warned of looming challenges after severing ties with Russia.
The world’s largest fashion retailer said Russia was a major market, after it shut its 503 shops and suspended online sales in the country amid its war in Ukraine.
Russia and Ukraine accounted for five per cent of the Spanish behemoth’s sales growth in February-March.
“In the current circumstances Inditex cannot guarantee the continuity of the operations and commercial conditions in the Russian Federation and temporarily suspends its activity”, Inditex said earlier this month.
The Pull& Bear and Berksha owner said its store and online sales had jumped up one third between 1 February and 13 March, when compared to the same period a year earlier. Sales were also up 21 per cent on pre-pandemiclevels in 2019.
The fashion titan’s net profit more than doubled in the year ended31 January, to €3.2bn (£2.68bn), as retailers recovered from the impact of pandemic disruption.
Shares were up 0.5 per cent in early trade on Wednesday morning.
Marta Ortega, the daughter of Inditex’s founder, is set to become the group’s chairwoman next month.
Ortega is to replace Pablo Isla on 1 April, who has been chairman of Inditex since 2011, while Oscar Garcia Maceiras took on the job of CEO earlier this year.
“We think that the changes are bad news for Inditex,” Spanish investment firm Alantra said after the announcement. “We would have expected a more orderly and smoother transition period, with Isla supervising in a non-executive role.”
“I have always said that I would dedicate my life to building upon my parents’ legacy, looking to the future but learning from the past and serving the company, our shareholders and our customers,” Ortega said in a statement.