International fashion retailer Zara is assessing a number of measures to sustain itself in the Australian market including cutting costs and potentially borrowing millions from its Spanish parent company Inditex.
Fast fashion giant Zara has outlined a number of cost cutting measures to keep itself going in the Australian market.Zara’s local accounts, filed with the corporate regulator on Monday night, show the company’s revenue grew a marginal 4.8 per cent to $326 million for the 12 months to January 31, 2020, before the effects of the COVID-19 pandemic.
“The company is analysing several measures to minimise its impacts through cost management initiatives and the company has sufficient liquidity, as well as the ability, if it were to become necessary, to obtain funding through the mechanisms established by the Inditex Group to which it belongs,” Zara’s local directors said.
At the end of the 2020 fiscal year, the company reported it had borrowed $44 million from its Spanish parent company since launching in the Australian market.The retailer’s accounts were completed on a going concern basis, with Zara currently reporting an asset deficiency of $9 million, as new accounting standards required the business to list $27 million in rental lease liabilities on its books for the first time.
It should be a criminal offense, a fine is too easy for a company like this.
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