Inditex is increasing production.
The company is stockpiling inventory.
In order to avoid any potential supply chain disruptions in the next few months, Inditex has decided to increase its production levels temporarily. This will allow the company to have a larger stock of products available without changing its commitment levels.
It is doing this in order to avoid supply chain difficulties.
The global fashion group has not elaborated on what exactly it foresees as far as supply chain issues go, but the move comes after coronavirus pandemic disruption hit retailers hard. Additionally, the sector is struggling with rapidly rising raw material and energy costs. By increasing production now, Inditex is hoping to be ahead of any potential difficulties that could arise in its supply chain.
The value of Inditex's inventory has increased.
The inventory is now worth €3.67bn.
This is due to the company's accelerated clothes manufacturing in order to stockpile inventory ahead of potential supply chain difficulties. The increase in production has temporarily increased the product availability without any change to commitment levels.
This is a 43% increase from last year.
The Spanish company said the value of its inventory at the end of July was €3.67bn, about 43 per cent higher than at the same time last year. Inditex announced a 24.5 per cent rise in sales to €14.8bn in the six months to the end of July and a 41 per cent increase in net income to €1.8bn.
Inditex's sales have also increased.
Sales have increased by 24.5%.
This is largely due to the company's online sales, which grew by 41% in the six months to the end of July. Inditex's brick-and-mortar sales also rose by 6%, although this was lower than expected due to the pandemic.
Net income has increased by 41%.
This is due to the company's efficient supply chain and its focus on fast fashion. Inditex is able to get new products into stores quickly and respond to trends rapidly, which has helped it weather the pandemic better than some of its competitors.