Zara And Inditex Post Profits
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Spanish clothing group Inditex, operator of chains including Zara, has shown that its fast fashion approach can weather the current downturn in clothing sales across much of Europe. The retailer has reported a 21 per cent increase in first quarter net profit to €124.8m in the three months to April 30.
Total sales rose 19 per cent to €1.41bn, with profits coming in ahead of market forecasts thanks to improved margins. Gross margin increased by 23 per cent to 55.7 per cent. Inditex, which operates more than 2,300 stores in over 50 countries, opened 90 new stores across the quarter. The group will invest up to €800m in further expansion this year, planning to open up to 395 new stores worldwide.
The quarter saw the announcement of the first Inditex stores in Indonesia, as well as a deal to acquire a majority stake in the Zara franchisee in Poland, described as market with "significant growth potential for Zara".
The Inditex board has approved the appointment of Pablo Isla as the company's new chief executive. Isla was previously co-chairman of tobacco group Altadis. Inditex said it is revamping its managment structure "to strengthen and adjust the management structure of the group with a new generation of managers which will face up to the future growth plans".