Zara Owner Ramps Up Shipments to Asia as Shoppers Return

Zara Owner Ramps Up Apparel Exports to Asia as Shoppers Return

Thomas Gualtieri

08 Apr 2020, 07:19 PM IST

(Bloomberg) --

Inditex SA’s main import and export airport hub in Spain is ramping-up as business in Asia picks up, following restrictions due to to the coronavirus earlier in the year.

Traffic at Zaragoza airport, where more than 75% of space is assigned to Inditex, has started to pick up, according to Marcos Diaz, airport director. Although the airport, which is controlled by AENA SA, saw a small decrease in activity earlier in the year, Asian markets “have been recovering strongly in recent weeks and South America hasn’t yet been hit like Europe,” he said.

The pick-up in traffic in Zaragoza offers a window into the notably tight-lipped company’s operations, notably in the eastern Asian market. Inditex said March 18 that about half its stores worldwide were closed due to the pandemic. Later in the month, it said that it may temporarily lay off some 25,000 shop workers if a state of emergency that started in Spain March 14 extends beyond April 11.

Inditex, the world’s largest retailer, uses the Zaragoza airport, one of Spain’s three largest cargo airports, as a base to import textile products and export apparel. Under Inditex’s unique distribution model, the vast majority of its apparel manufactured outside Spain has to be sent to the country and then exported to stores around the world.

A press officer for Inditex declined to comment.

Inditex declined 1.84% to 24.04 euros per share at 12:10 a.m. in Madrid, in line with Spain’s benchmark Ibex-35. The shares are down 24% in 2020.

Inditex’s activity at Zaragoza also shows that the company has been able to continue certain operations in Spain in spite of a government order to place non-essential economic activity on standstill. With the slow-down in Spain and other countries, Inditex has re-assigned the majority of its space in the airport as a base of imports of medical goods.

The Zaragoza airport is one of Spain’s three largest cargo airports, and had the second highest cargo traffic in February, before the coronavirus crisis hit the country in full, according to official data.