Fashion chain Zara's finances have come under the spotlight, as the company revealed it had underpaid Australian store workers $2.6 million.
Zara's accounts, filed with the corporate regulator on Monday, hinted at "significant uncertainty", cost-cutting and the potential borrowing of millions from its Spanish parent company to offset the effect of the coronavirus pandemic on sales.
The company's revenue rose 4.8 per cent to $326 million for the 12 months to January 31, 2020, before the pandemic dealt a body blow to retail across Australia.
READ MORE: Zara empire invests almost $5b on post-pandemic future despite steep losses
Zara has engaged a third party to investigate staff underpayments, relating to the retail award, and set aside a $2.6 million "remediation provision" in its accounts.
Since launching into Australia and opening 19 stores nationwide, Zara has borrowed $44 million from its Spanish parent company, Inditex, according to filed accounts.
Zara said it was devising strategies to counter the "significant effect" of COVID-19 on its business.
"The company is analysing several measures to minimise its impacts through cost management initiatives," Zara's local directors said.
READ MORE: Pandemonium at Aldi stores as ski gear sale returns
Zara said it had "sufficient liquidity, as well as the ability" if it became necessary to obtain funding from Inditex, the world's biggest clothing retailer.
"Although there is significant uncertainty surrounding future events, the company's directors are constantly monitoring the evolution of the situation in order to successfully address any possible impacts, both financial and non-financial, that may arise," they said.
"Management have prepared forecasts based on various scenarios due to the impact of COVID-19 on the business, and on the basis of these scenarios the directors consider that the entity will continue as a going concern for at least 12 months."
Zara joins a host of other high-profile companies to have underpaid staff, including Woolworths, Qantas, Super Retail Group, the ABC, Commonwealth Bank, Bunnings, Rockpool Dining Group, Michael Hill Jewellers and Sunglass Hut.
READ MORE: Sneakers fetch thousands but fraudsters spoil booming industry
from 9News https://ift.tt/3g1p8Dz
via IFTTT
0 Comments