Zara Owner’s Stock Has Shrunk in the Lockdown Wash

Even as shoppers stock up on new clothes to return to the office and bars, fast-fashion stocks have been left on the shelf. This could show nerves about fresh lockdowns, but another explanation is possible: Investors might be starting to pay more attention to the clothing industry’s environmental footprint.

On Wednesday, Zara’s owner Inditex said sales in the quarter through July increased 51% at constant exchange rates compared with the same period last year, and even 7% versus the 2019 quarter. The company is in better shape than before the crisis on other measures as well. Inventory levels are lower than in 2019, net cash is higher at €8 billion euros, equivalent to $9.5 billion. E-commerce is expected to account for 25% of total sales this fiscal year, compared with 14% before the pandemic, and the company cut its total number of stores by 9% over the past 12 months.

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