China'S Epidemic Situation Has Been Controlled. Zara Parent Company Inditex Has Become A Key Market.

Last month, Zara (SA LA)'s parent company, Spain's fast fashion giant Inditex, said in its 2019 earnings report, because the Spanish government has stepped up its control efforts, Inditex has closed all its brand stores in Spain, and plans to transform some of its fabric production lines into professional medical fabric production lines.

With the further intensification of the Spanish epidemic, the Spanish government introduced a more stringent regulatory rule not long ago: from March 30th to April 9th, the non essential workers in Spain must stay at home and quarantined. This requirement means that the production lines of Inditex's 13 garment processing plants in Spain must stop producing fashions and switch to medical supplies according to government needs, such as medical work clothes, respirators and so on.

Although it is not clear how much of Inditex's clothing is from Spain, Inditex has revealed that in order to achieve quick replenishment of global stores, Inditex has "57% of clothing purchased from garment factories in Spain, Portugal, Turkey and Morocco".

Apart from garment manufacturing, Inditex has almost stopped working in 10 logistics distribution centers in Spain. In the past, Inditex's Spanish logistics center delivered two stores to stores every week to ensure that the stores were new in time. Since all Spanish stores in Inditex have been closed, the distribution of all stores has been suspended.

Fortunately, the Spanish government believes that the electricity supplier business is still "indispensable" in the current environment. Inditex's Spanish logistics center has not stopped completely, and still can undertake online orders, but the working hours are greatly reduced. According to a trade union representative, the logistics centers are now running 1 shifts a week, 4 hours per class. Workers will give priority to handling truck unloading work from garment suppliers in Turkey and Morocco to avoid detention. Today, the number of freight cars going to Inditex Spain logistics centre has been greatly reduced.

According to a trade union, Inditex's logistics and distribution platform in Zaragoza, Spain, requires workers to "rotate two times a week, 4 hours a week". A worker who did not want to be named said that the workload level of the Zaragoza logistics platform was only 15% of the usual level, because the stores were closed, causing the warehouse to be filled with goods.

On the other hand, as the epidemic is under control in China, Inditex is shipping these goods to China through freighters to meet online and offline orders in the Chinese market. Zaragoza logistics platform workers say that when Inditex cargo planes fly back from China to Spain, they often return with urgent medical supplies. Spanish government staff highly praised Inditex's move.

Last week, Inditex's founder and billionaire Amancio Ortega said that her personal foundation had purchased medical supplies worth 63 million euros or 480 million yuan, including respirators, masks and test boxes to help Spain fight the epidemic.