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Inditex Set For Expansion

By FashionUnited

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Zara owner Indetex, is expected to announce a board restructure this month to improve control of the fashion retailer's ambitious expansion plans. The news emerged as Inditex opened a flagship store for Bershka, its teen-fashion chain, in Central London. It is the sixth Inditex outlet to open in the UK and Ireland in a week, highlighting the rapid expansion of the Spanish group.

Analysts are concerned that Inditex's top-light structure has failed to place sufficient controls on its growth strategy, which has seen the group open more than 200 stores a year from Mexico to Japan during the past four years.

Inditex has been working with McKinsey & Co on a five- year strategy. The management consultancy is thought to be advising on a new board structure after the resignation of Juan Carlos Rodríguez Cebrián, managing director, last month. His departure followed news that José María Castellano, who has been chief executive of the Spanish group since 1997, would step down to become deputy chairman.

A spokesman for the company said that Inditex had good control over its store-opening programme at the country level, but added: "This is about having the right corporate governance and the development of the business going forward. We have got to have the infrastructure in place if we are going to double the size of the business."

Analysts expect an announcement on the new structure to be made when the Madrid-listed retailer reveals its annual results on March 31. Bershka, which has 305 stores worldwide, is currently the fastest-growing part of the Inditex group apart from the core Zara chain. Zara, which competes with the likes of New Look, H&M and Top Shop, has four stores in Ireland and two in England. Up to three more Bershka stores are expected to open this year in the London area. Inditex is also seeking up to three more sites for Massimo Dutti, its more mature, up-market, label and ten more for Zara this year.

Inditex