The stocks of Zara-owner Inditex are likely to plummet if COVID-19 cases continue to surge across Europe and result in a second set of government-imposed lockdowns.
The stock could also come under pressure if its half-year (H1) earnings fail to impress investors on Wednesday 16 September.
In its first three months of trading, most markets of the group imposed restrictions on the operations of stores, which resulted in 51 per cent decline in sales. However, the retail fashion group remains confident of positive outcome in its upcoming results.
All high street fashion retailers like Inditex, Next and Hennes & Mauritz (H&M) have struggled significantly amid the coronavirus pandemic as lockdowns have wiped out sales from physical stores. However, the prices of online-only retailers like Boohoo and ASOS continue to move higher with online fashion is set to triple this year, accounting for around 23 per cent of all European sales in 2020.