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Strong Sales at Inditex Lift Bottom Line 20%

NEW YORK — Inditex Group kept its winning streak alive in 2002, posting growth in sales, operating income and net income in excess of 20 percent.<br><br>The La Coruna, Spain-based operator of Zara and six other fashion nameplates even managed to...

NEW YORK — Inditex Group kept its winning streak alive in 2002, posting growth in sales, operating income and net income in excess of 20 percent.

The La Coruna, Spain-based operator of Zara and six other fashion nameplates even managed to improve its comparable-store sales growth rate last year, coming in at 11 percent versus 9 percent in 2001. Comps increased across all geographic regions.

Net income for the year ended Jan. 31 shot up 28.7 percent, to $464.6 million from $361 million in 2001, as earnings before interest and taxes rose 27.4 percent, to $699.2 million from $548.8 million. Dollar figures have been converted from the euro at current exchange rates.

Sales for the year moved up 22.3 percent, to $4.21 billion from $3.45 billion in 2001. The company noted that, excluding currency fluctuation, sales would have risen 28 percent. Europe represented 80.1 percent of sales, up from 76.8 percent in the prior year, while its home market of Spain maintained its share of sales at 46 percent.

In a statement released Thursday, the company declined to tie its fortunes to international tensions such as the war in Iraq. “No significant event has occurred during the seven weeks following fiscal year 2002 that could influence the general running of the company,” the firm asserted. “The spring-summer 2003 collection has been well received by our customers of our different concepts.”

Net income represented 11 percent of sales last year, versus 10.5 percent in 2001. Gross margin declined slightly, to 51.5 percent of sales from 51.9 percent, but EBIT margin ascended to 16.6 percent of sales from 15.9 percent in the prior year.

The firm opened 274 stores last year, bringing its total to 1,558. Between 260 and 315 new stores are expected to be launched in 2003. Capital expenditures will fall between $531 million and $584 million, the majority of which will be earmarked for new stores and renovations of existing units.

Inditex didn’t break down sales by division in its yearend statement but in its 2001 annual report, it indicated that Zara accounted for 76.2 percent of sales; Massimo Dutti, 7.4 percent, and Pull and Bear, 6.9 percent.

By division, units open at yearend tallied 531 for Zara; 296 for Pull and Bear; 250 for Massimo Dutti; 197 for Bershka; 153 for Stradivarius; 72 for innerwear specialist Oysho, and 59 for Kiddy’s Class.