Spain Fashion Retailer Inditex Returns to Profit

Spain Fashion Retailer Inditex Returns to Profit
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Spain Fashion Retailer Inditex Returns to Profit

Spain Fashion Retailer Inditex Returns to Profit

Spanish fashion retailer Inditex -- owner of brands such as Zara, Massimo Dutti and Bershka -- said Wednesday that strong growth in online sales helped it return to profit in the first quarter after coronavirus lockdown measures pushed it into the red a year ago.

Inditex -- which runs its business year from February to January -- said in a statement that it booked net profit of 421 million euros ($510 million) in the three months to April, compared with bottom-line loss of 409 million euros a year earlier.

"The first quarter stands out for its solid operating performance, with growth in operating expenses... significantly below sales growth," the statement said.

Revenues expanded by 50 percent to 4.9 billion euros -- with onlines surging by as much as 67 percent in local currency terms -- and underlying or operating profit jumped by 155 percent to 1.2 billion euros.

"Sales were higher across all geographies and every brand despite the fact that 24 percent of trading hours were unavailable due to lockdowns and restrictions (16 percent of the group's stores remained closed at the end of the quarter) in addition to other capacity restrictions," Inditex said.

"Our differentiation and strategic transformation towards a fully-integrated, digital and sustainable model continues to bear results," said chief executive Pablo Isla.



France Fines Shein 40 Million Euros for Misleading Discounts

FILE PHOTO: A view of a Shein pop-up store at a mall in Singapore April 4, 2024. REUTERS/Edgar Su/File Photo/File Photo
FILE PHOTO: A view of a Shein pop-up store at a mall in Singapore April 4, 2024. REUTERS/Edgar Su/File Photo/File Photo
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France Fines Shein 40 Million Euros for Misleading Discounts

FILE PHOTO: A view of a Shein pop-up store at a mall in Singapore April 4, 2024. REUTERS/Edgar Su/File Photo/File Photo
FILE PHOTO: A view of a Shein pop-up store at a mall in Singapore April 4, 2024. REUTERS/Edgar Su/File Photo/File Photo

France's antitrust agency said on Thursday it had fined China-founded fast-fashion retailer Shein 40 million euros ($47.17 million) for alleged deceptive business practices including misleading discounts, following a nearly year-long probe.

The agency, in charge of consumer protection as well as competition, said Infinite Style E-Commerce Co Ltd, which handles sales for the Shein brand, had misled customers about discounts, and that the company had accepted the fine, Reuters reported.

Under French regulations, the reference price for any discount is the lowest one given by a retailer during the 30 days preceding the offer. Shein infringed that rule by not taking into account previous offers, and sometimes increasing the price before applying a discount, the agency said.

It said its investigation showed the company "deceived consumers about the authenticity of discounts they could benefit from."

The probe, conducted across thousands of products on Shein's French site between October 1, 2022 and August 31, 2023, found 57% of advertised deals were not, in fact, offering a lower price; 19% had less of a discount than advertised; and 11% were in fact price increases.

In a statement, Shein said the antitrust agency had informed Infinite Style Ecommerce Co Ltd (ISEL) of breaches related to reference price and environmental regulations in March last year, and ISEL had taken corrective action within the following two months.

"This means that all identified issues were addressed more than a year ago," Shein said, adding that ISEL was committed to complying with French regulations.