Zara owner sees sales rise

Zara clothing outlet. Photo credit: Tim Ireland/PA Wire
Zara clothing outlet. Photo credit: Tim Ireland/PA Wire
0
Have your say

Inditex, the owner of Zara, has seen sales rise 11 per cent in the first nine months of the year as the company remains firmly in fashion with shoppers.

The Spanish retailer notched up revenues of £13.7bn during the period, resulting in a 9 per cent rise in net profits to £1.8bn.

This was despite warmer than usual weather across Europe in autumn.

As its fashion peers struggle to adapt to changing consumer tastes, with Abercrombie & Fitch and Gap posting dismal fourth-quarter sales last month, Inditex’s fast-fashion business and online prowess have kept it ahead.

Inditex is known for speedily reacting to changing trends and weather by keeping its manufacturing bases close to its distribution centre in the Northern Spanish region of Galicia. Items are designed, made and shipped to stores often in less than a month, which boosts its profitability.

Items such velvet dresses, military blazers and mini skirts helped push sales up 14.5 per cent in local currencies in the nine months to October 31.

Tom Gadsby, analyst at Liberum, said: “Encouragingly, trading at the start of the fourth quarter has improved further, while new space and online launches are progressing as planned.

“Few other major clothing retailers can match the mid teens percentage sales growth that Inditex has achieved in difficult global markets this year while the company’s clear focus on achieving full price sales underpins high, and stable margins.”

Analysts also expect it’s next biggest rival H&M to have been hit by the warmer weather in autumn as it failed to swap out its collections of cold-weather items to attract shoppers.

Inditex, the world’s biggest clothing retailer and also the owner of Massimo Dutti and Bershka, opened its first store in Vietnam’s Ho Chi Minh City in September and made its debut in Auckland, New Zealand, in October.

The group now operates 7,240 stores in 93 markets.