April 13, 2020 / 1:22 PM / in 2 months

Fashion giant Inditex working at reduced capacity despite loosened Spanish lockdown

MADRID (Reuters) - Employees at global fashion giant Inditex’s 10 logistics centres in Spain - from where it sends garments to its stores worldwide - returned to work on Monday but only to less than half their normal levels of activity, workers said.

FILE PHOTO: People leave a Zara store, an Inditex brand, in central Barcelona, Spain, December 13, 2016. REUTERS/Albert Gea

Meanwhile just three of Inditex’s 13 Spanish factories were back at work, making medical supplies like scrubs to help fight Spain’s coronavirus crisis, with no garments being made for now for brands like Zara and Bershka, a union representative said.

Spain loosened on Monday the terms of a strict lockdown brought into force to halt the spread of one of the deadliest outbreaks of the virus worldwide, allowing non-essential workers to return to their jobs after a two-week hiatus.

Cash-rich Inditex said on Monday it would not furlough its some 25,000 shop assistants in Spain for the month of April and would continue to pay their full salaries.

The company had previously said it would consider temporarily laying off store staff in Spain if the country’s state of emergency extended beyond April 15.

Staff at the Inditex logistics centres returned to work but at reduced schedules - either working half-days or just two or three shifts a week - to reduce contact between employees, a union representative and a worker said.

Rather than entering the facilities all at once, shift workers had staggered entries and exits and wore masks and gloves while maintaining two-metre distances from colleagues, they said.

Just 15% of normal activity was maintained at one of Inditex’s 13 Spanish sewing factories, one worker said, focused on maintenance of machines rather than production of clothes.

Inditex did not respond to a request for comment.

The Massimo Dutti owner does not disclose the proportion of its fashions made in Spain, but it sources 57% from factories near its Spanish headquarters - mostly in Spain, Portugal, Turkey and Morocco - so it can respond quickly to trends.

Inditex said in its annual results on March 18 that it had temporarily closed 3,785 stores worldwide. That would leave around half of its shops still open.

Its fashion brands are currently offering discounts on their websites with items like a Zara oversize printed dress reduced by 45% to 15.99 euros ($17.46) and a Massimo Dutti cashmere sweater reduced by 30% to 69.95 euros as the company seeks to shift unsold stock.

It is offering free delivery for online orders and has extended return times to 30 days after the reopening of stores.

Inditex said at the time of its annual results that it would book a provision of 287 million euros against the outbreak’s impact on its spring/summer inventory position.

Reporting by Sonya Dowsett; Editing by Mark Potter and Jan Harvey

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