Blog: Inditex inches ahead
Leonie Barrie | 11 June 2008
Signs that consumers across western Europe are tightening their belts were seen today in a slowdown in sales and profit growth at Spanish retail giant Inditex.
Yes its first quarter profits rose 10% to EUR219m and sales were up 9% to EUR2.218bn, but its previously invincible Zara fashion chain was weighed down by a slowdown in the Spanish retail boom, tighter credit conditions and unseasonably cold weather which hurt sales of summer clothing.
The retailer, which also operates the Bershka, Massimo Dutti and Oysho chains, was partly shielded from troubles in its home market – where it generates more than a third of its sales and has almost half its stores – by new store openings overseas.
And it plans to continue its aggressive rollout this year, with between 560 and 640 new stores in 2008 helping to diversify its exposure risk to fluctuating markets.
Closer to home, a recent report suggests there are also growth opportunities in Spain’s still underdeveloped out-of-town sector, the fledgling multi-channel offer and internet retailing.
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