LONDON — Inditex and Asos.com showed Wednesday that there’s still a healthy appetite for fast fashion on high street, with both companies posting double-digit gains. French Connection, meanwhile, has put new strategies in place to resuscitate declining sales and profits.
This story first appeared in the September 20, 2012 issue of WWD. Subscribe Today.
Inditex, parent of brands such as Zara and Massimo Dutti, said net profit climbed 32 percent to 944 million euros, or $1.24 billion, in the first half ended July 31.
Sales rose 17 percent to 7.24 billion euros, or $9.48 billion, driven by store openings. Like-for-like sales increased by 7 percent. During the first six months, the group opened 166 stores and now has a total of 5,693 units in 85 markets.
Figures have been calculated at average exchange rates for the six months.
The momentum is continuing into the third quarter: The Spanish company said that store sales in constant-currency terms rose by 17 percent between Aug. 1 and Sept. 17.
Asos.com said in a trading statement that in the fourth quarter ended Aug. 31, total group revenues advanced 31 percent to 145.2 million pounds, or $235.2 million, with the international business growing 42 percent and the U.K. up 15 percent.
In the full year, group revenues rose a total of 37 percent to 552.9 million pounds, or $895.7 million.
Chief executive officer Nick Robertson said that 65 percent of sales in the fourth quarter came from outside the U.K., compared with 60 percent last year.
French Connection Group underperformed compared with its peers: In the first half ended July 31, revenue fell 6.6 percent to 96 million pounds, or $155.5 million. The company posted a net loss of 6.3 million pounds, or $3.9 million, with the European and U.K. business dragging down the numbers.
“We feel like the light is very bright at the end of the tunnel,” said Stephen Marks, the company’s chairman and ceo. “We’re working very hard at getting back into a profitable situation within the next two years.”
Marks said the wholesale business was performing well in the U.S., where it sells at stores such as Macy’s, Bloomingdale’s and Nordstrom.
The company, which has been struggling in the U.K., has set out a series of initiatives aimed at jump-starting the business, including closing unprofitable stores, tweaking its ranges and pricing and improving reaction speed to the best-selling lines and to changing trends.
A spokeswoman said French Connection is expecting some benefits from these initiatives to start coming through in the next six to nine months.