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Inditex Posts 1-Qtr Profit Gain of 33%

Inditex said store openings and better stock control combined to drive first-quarter net income ahead 33 percent.

PARIS – Inditex, the Spanish retailer that runs the Zara chain, today said store openings and better stock control combined to drive first-quarter net income ahead 33 percent.

In the three months through April 30, profit improved to 200 million euros, or $265 million, from 150 million euros, or $189 million, as sales gained 19 percent to 2.04 billion euros, or $2.71 billion, from 1.72 billion euros, or $2.2 billion, a year earlier. Dollar figures are at the average exchange rate.

Pablo Isla, Inditex’s deputy chairman and chief executive officer, told a conference call that trading in the first six weeks of the second quarter had been “in line with management expectations.”

He said all geographic zones contributed to growth and that the firm had not felt any impact from the slowing of the Spanish economy. “[There’s a] strong consumer environment in Spain,” he said.

Though Inditex, which is Europe’s largest retailer in terms of sales, did not provide same-store sales figures, Isla said like-for-like figures were “growing according to expectation.”

Isla repeated that the firm expected to spend 850 million to 950 million euros, or $1.1 billion to $1.3 billion, to open stores this year, as it bulks up in the highly competitive European fast-fashion market, where Inditex goes head-to-head with Sweden’s Hennes & Mauritz and Spain’s Mango.In the first quarter Inditex opened 114 stores, including 35 Zara units. Zara generated more than 65 percent of Inditex’s total sales last year.

Isla said that Zara would grow its product range by introducing maternity wear across its more than 1,000 stores. Zara met great success with a maternity pilot range offered in its Spanish stores earlier this year, Isla said.

Isla said a new “image and layout” for Zara’s men’s wear also was being introduced across the chain to make the men’s area more approachable and easier to navigate.

Isla trumpeted a handful of initiatives at the group’s other brands, including the introduction of a new website for the Pull and Bear line, the planned launch in August of the Massimo Dutti line in China, and the launch of a virtual Second Life store for the teen chain Bershka.

Meanwhile, he said a new store image was being introduced for the Stradivarius chain and that the Oysho chain would introduce a range for newborns and young children.

Isla said the fast-growing Zara Home concept opened a massive logistic platform near Barcelona. He said the chain would inaugurate its first Paris store, near the Madeleine, on Friday.