• Home
  • News
  • Fashion
  • Zara continues to drive Inditex profit

Zara continues to drive Inditex profit

By FashionUnited

loading...

Scroll down to read more

Spanish fashion group Inditex has reported a rise in second half profits of 14.6 percent, thanks to “outstanding� sales at its Zara chain. Sales for the three months ended 31 July rose 19.7 percent to €1.76 billion, with net income at €144.7 million, up from €123.6 million last year. Meanwhile, sales for the first half surged 23 percent to €3.47 billion, while net income rose 19 percent to €296 million.

“Zara showed outstanding growth,� said deputy chairman and chief executive Pablo Isla. “The quarter was quite strong.� He also said that sales had been solid in August and early September and revealed that the company would continue to expand aggressively. Major areas for growth opportunity for Zara, which accounts for 66 percent of total group sales, include Asia , Russia and Italy . Isla said the chain would have 40 outlets in Italy before the end of the year. Zara opened its first store there in 2002. Meanwhile, Asia is a market rich with opportunities for Inditex. The company wants to open stores there twice as fast as in the rest of the world, said Isla. Zara opened its first stores in Shanghai earlier this year and according to Isla, sales there have exceeded expectations. “Sales to white collar locals and overseas transplants have been above our initial expectations,� he said, adding that Zara's first Beijing store would open before the end of the fiscal year. The company plans to expand its total retail space this year by 15 to 20 percent and will invest as much as €950 million in new store openings. Zara is expected to open approximately 150 stores this year, having opened 129 stores last year. During the first half, the group's eight store formats – Zara, Berschka, Massimo Dutti, Pull & Bear, Stradivarius, Kiddy's Class, Oysho and Zara Home – together opened 208 stores. Berschka will open up to 75 new stores, while Massimo Dutti will open 40 more stores. Although growth was seen in most markets, Isla said Germany was still a challenge for the group. A spokesman declined to comment on why this might be, stating that the group does not comment on individual markets.

Inditex