Asia, main growth engine for Inditex in the first half

Paradoxically, Asia, the market that most headaches is causing to the heavyweights of international fashion, has become the main engine of growth for Inditex.

During the first six months of fiscal 2015, the largest fashion retailer in the world, enjoyed steady growth in Asia, where a 3.5 percent sales increase was noted, taking Asia´s weight of the group´s total sales to 25.2 percent. A year ago, it contributed a 21.7 percent.

Pablo Isla, president of the group, has clearly reaffirmed Inditex´commitment to the Asian giant: "We expect a significant number of openings in China this year and in coming years. Our business in China is still very strong, with very positive growth of sales in the country. And we continue to see great opportunities for expansion," he said in a conference call with analysts.

China, the market with the highest number of new openings in the first half

In fact, China was the market in which Inditex has opened more stores in the first half of its current fiscal year, reaching 514 stores, a figure exceeded only in Spain.

Meanwhile, America generated 14.7 percent of sales (+ 1.3 percent), while Europe (excluding Spain) lost weight to start contributing 42.7 percent, compared to 45.6 percent in the first half of 2014.

The case of Spain is complicated because although its contribution to the group as a whole has dropped to 17.4 percent, its individual growth has remained strong, advancing over 6 percent, as highlighted by the chief executive of the group.

First-half sales grow 16 percent

So for the first six months of the year, the group chaired by Paul Isla achieved sales of 9.421 million euros, representing an increase of 16.5 percent over the same period last year. The increase in sales was accompanied by an increase in profitability, as earnings rose 26 percent to 1,166 million euros, highlighted 'Expansión'.

In addition, the firm based in Arteixo stated in a presentation to analysts that a 16.5 percent jump in profit can be attributed to the favourable exchange rate impact from the depreciation of the euro. Comparable store growth, that is, excluding new, was 7 percent in the first half.

First semester´s results have sat well with Inditex shares that, after a sharp market opening, closed the session with an advance of 5.91 percent. "These figures have been clearly driven by the recovery in consumption in Spain and the high value of the dollar / euro, which has increased its turnover outside the Eurozone," noted Bankinter analysts in a note to clients.