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PARIS — Inditex reported Wednesday that nine-month net profits and sales grew at a slower pace than in 2012, but it was steaming ahead with store openings and renovations, and planned to roll out its online platform in Mexico and South Korea in 2014.
This story first appeared in the December 12, 2013 issue of WWD. Subscribe Today.
The parent of fast-fashion brands including Zara and Massimo Dutti said net profit rose 1 percent to 1.67 billion euros, or $2.2 billion, during the period from Feb. 1 to Oct. 31. Net sales totaled 11.93 billion euros, or $15.76 billion, up 5 percent versus the same period a year ago.
This compares with a 27 percent rise in net profit and a 17 percent jump in sales in the first nine months of 2012. Dollar figures have been converted at average exchange rates for the period concerned.
Branding the performance “satisfactory,” Inditex chief executive officer Pablo Isla noted that the strong euro impacted earnings, pointing out that sales in local currencies were up 8 percent.
Momentum was good heading into the fourth quarter, with store sales in constant currency terms rising 10 percent between Nov. 1 and Dec. 8.
Isla noted that recent indicators confirmed a recovery in the key domestic market, and he expected Inditex to post positive sales growth in Spain in the second half of 2013.
“This year, 2013, is a year of strong activity from the point of view of expansion inside the group,” he said during a conference call with analysts. “We continue seeing strong growth opportunities in the different geographies.”
The group, based in Arteixo, Spain, said it opened 240 larger new stores in 54 markets during the period, bringing the total across 86 markets to 6,249 by Oct. 31.
For the financial year as a whole, Inditex plans around 500 openings, to enlarge 100 flagships worldwide and absorb 175 smaller units into neighboring stores. Store-space growth should total 8 percent to 10 percent in 2013 and 2014, Isla said.
“Our space growth and online launches are on track,” the executive said.
“We are enlarging our flagships around the world and rolling out the latest image into new and key existing stores. The average size of new units is also increasing. These initiatives provide higher product visibility, stronger visual merchandising and an enhanced in-store experience,” Isla added.
In recent months, Inditex has refurbished Zara stores in locations including New York, London, Amsterdam, Milan and Shanghai. It has opened new Zara units in Paris; Berlin; Lugano, Switzerland; Jinhua, China, and Canberra, Australia, among others.
In the third quarter, it launched online sales in the Russian Federation for the Zara, Bershka, Massimo Dutti, Stradivarius and Oysho banners. Inditex has introduced online sales in 24 markets over a period of 36 months.