SPAIN: Profits rise 27% at Zara owner Inditex
- 9-month net income surges 27% to EUR1.66bn (US$2.2bn)
- Net sales climbed 17% to EUR11.36bn
- Added 360 new stores, taking group total to 5,887
The company, which also owns the Massimo Dutti, Bershka and Pull & Bear formats, saw net income surge to EUR1.66bn (US$2.2bn) in the period from 1 February to 31 October, up from EUR1.3bn a year earlier.
During this time, it added 360 new stores in 54 markets - taking the total number of stores operated by the group worldwide to 5,887.
The addition of these new stores helped lift net sales by 17% to EUR11.36bn. In constant currency terms, net sales increased by 15%.
The retailer said its strong performance has continued into the early fourth quarter, with store sales in constant currency terms rising by 15% between 1 August and 9 December.
"Inditex's strategy of diversifying its sales worldwide continues to pay dividends, reducing its exposure to the difficult European market," notes Matt Piner, lead consultant at retail analyst Conlumino.
"The group's flexibility, with its various brands and willingness to adapt its approach and products to local markets, has helped it quickly gain traction in new countries."
He adds that the group's "breadth of local suppliers across Europe and Africa has insulated it from rising production costs in Asia.
"Moreover, tight control of its supply chain also provides Inditex with the ability to deliver products from conception to stores within a fortnight, allowing it to rapidly react to changing trends and styles."
Piner concludes: "With the global outlook remaining extremely tough for 2013, Inditex will struggle to maintain its stellar growth rates, particularly on a like-for-like basis."
But he believes the group will "undoubtedly continue to outperform its peers," thanks to its online growth and the planned addition of up to 520 stores this year.
Finding a cheap and responsive outsourcing option closer to home is increasingly a key option for US and European brands....
Inditex was founded in 1963 by Amancio Ortega Gaona. The group opened its first Zara shop in 1975 in A Coruna, Spain. Inditex was established as the head of the corporate group in 1985. The group witn...
Mexico is Inditex’s third largest sales territory on a global basis, behind only Spain and Portugal. All of the company’s brands (Zara, Bershka, Oysho, Massimo Dutti, Pull & Bear, Uterqüe, Stradivariu...
More than 170 companies have now signed the Accord on Fire and Building Safety in Bangladesh following the collapse of the Rana Plaza factory building in Dhaka, which killed more than 1,100 people las...
- Improved supplier capabilities benefit Next
- China and Vietnam lead US apparel imports in July
- THE FLANARANT: Understand win-win or lose out
- Next H1: What the analysts say
- US apparel retailers' August 2014 sales roundup
- Hanesbrands axes Costa Rican jobs in Vietnam move
- Brandix selects first "game-changing" innovations
- Bagir to invest in Ethiopia as H1 loss deepens
- Apparel fuels global manufacturing downturn
- US cotton production set to decline
- Wool in the 21st Century: new prospects for a familiar fibre
- Apparel Market in China to 2018 - Market Size, Trends, and Forecasts
- Global market review of denim and jeanswear – forecasts to 2020
- Global Database of the Top 1000 Apparel Producers - Company Names, Financial Performance, Key Executives, and Contact Details
- Global Database of the Top 1000 Cut and Sew Apparel Producers - Company Names, Financial Performance, Key Executives, and Contact Details