Zara Plans For Expansion

Spanish fashion group Inditex has announced plans for an expansion drive that will see it grow to 4,000 stores worldwide by the end of 2009. Inditex will continue to roll out its flagship brand Zara, but also has high hopes for its other chains. Teenage brand Bershka, which opened its first UK store at the Metro Centre, Newcastle, last year, will throw down the gauntlet to Top Shop with a flagship store on Oxford Street and further London stores this year.

Overall, Inditex plans to grow from its current total of around 2,250 stores to more than 4,000 stores by the end of 2009. That would increase its estate by 75 per cent and would see it overtake US fashion giant Gap, which is taking a more cautious approach to expansion in the face of flagging international sales.

Contracts have been signed for two-thirds of the 360 new stores it hopes to open this year. A major new Zara store has just opened at Lakeside, Essex. Inditex plans more than 100 new Zara stores in Europe, focusing on France, Italy, Germany and the UK.

Inditex chains Massimo Dutti, which sells officewear, and Pull and Bear, which sells basic lines, are earmarked for wider expansion across Europe alongside Zara and Bershka. Others, including lingerie chain Oysho, childrenswear brand Kiddy's Class, girlswear chain Stradivarius, and Zara Home, will restrict expansion closer to home in Spain and Portugal for the time being.

Confirmation of the expansion plans came as Inditex reported a 41 per cent increase in profit to €628m during 2004. Net sales were up 23 per cent to €5,670m with like-for-like sales growth of 9 per cent. Across the year, sales in younger brands grew slightly as a proportion of total sales, up to 32.6 per cent from 30 per cent in 2003. International sales represented 54.5 pe cent of total sales, up from 53.9 per cent, with 82.8 per cent of the total sales generated in Europe. At Zara, international sales represented 65.8 per cent of total sales, up 2.3 per cent.