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The global fashion business journal

Dec 12, 20199:14am

Inditex: hard Brexit won’t have a ‘significant’ impact

Delays in merchandise traffic, tariff raises, currency exchange and possible restrictions in free trade are the risks pointed by the Spanish giant.

Sep 27, 2019 — 4:44pm
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Inditex: hard Brexit won’t have a ‘significant’ impact

 

 

For Inditex, Brexit is not a main concern. The company believes that the impact of a possible exit of United Kingdom from the European Union without a deal will not be “significant”. The company stated in a report of quarterly results in the Comisión Nacional del Mercado de Valores (Cnmv).

 

Potential delays in the transit of the merchandise, economic impacts derived from the imposition of tariffs, currency fluctuation and possible restrictions on the free movement of employees, “as well as those derived from contractual or management risks of key third parties” , are the potential problems that Brexit could bring to the company.

 

 

 

 

Inditex, that has 108 stores in the United Kingdom, says that despite the importance of a hard Brexit “the analysis shows that the residual risk for the group, once mitigation actions have been implemented, would not be significant”.

 

The company states that an exit without deal will entails changes in the regulatory environment in which the group operates in the United Kingdom, as well as in the commercial relationship between the United Kingdom and the European Union, as the British market would be governed by the rules of the World Trade Organization (WTO). This change would mean that cross-border trade would be subject to customs controls and tariffs, the company notes.

 

The group also explains that geopolitical, demographic and socio-economic changes, triggers of country risk, in the supply or distribution countries, or the retraction of consumption in certain markets, as well as the marked changes in climatic cycles that can affect patterns of demand, are, among others, “factors that could influence the optimal achievement of its business goals”.

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