Inditex, the owner of Zara and many other high-street clothing brands, said on Wednesday that its worldwide sales had dropped 24 per cent during the first half of March. It added that it was suspending payment of its 2019 dividend to shareholders and has made a 287-million-euro provision in its accounts to offset the decline.
The problem comes from the temporary closure of stores, which the group said had reached 3,785 in 39 countries, despite all except 11 being now open in China. Online sales were "normal" in all markets.
Inditex, which includes brands such as Massimo Dutti, Bershka and Stradivarius as well as Zara, is based in Galicia. It has 165,000 staff globally and for the moment says it does not plan on making anyone redundant, probably relying on ERTE layoffs instead.
Stock market crash
The trading update from Inditex was not surprising for the Spanish stock exchange, which has fallen dramatically in recent days, along with other international share markets.
In the last month, the IBEX 35 leading-shares index has dropped some 40 per cent.
On Thursday, the index was up slightly at two percent on the previous day after the European Central Bank announded a 750-billion-euro public and private asset-buying programme. It closed at 6395 points, down from 8683 on a week earlier.