ARTEIXO, Spain — It’s known as the king of fast fashion but Inditex is maintaining its fiercely disciplined approach to expansion as the retailer plots its future course in a fast-maturing market that is reaching saturation point.

The group’s strategy, as it navigates a period of uncertainty rocked by volatile global currencies and market shifts, remains centered around the optimization of stores — with a focus on flagships in prime high street locations — and leveraging digital. Its ultimate objective: a holistic, seamless integration of the two.

Inditex, which owes its success to the agility and sophistication of its proximity-based supply chain, and formula of short, frequent, fashion-forward drops, has been “paving the way for the future” since 2012, said Pablo Isla, chairman and chief executive officer of the Spanish retail giant, at the presentation of the group’s full-year results here Wednesday. Analysts deemed the performance mixed, with a noticeable slowdown in sales in the three months ended Jan. 31, but cash-flow dynamics were improving. Inditex shares fell by over 5 percent at the opening of the Madrid Stock Exchange, but had settled by the afternoon.

Inditex’s gross margin was down around 140 basis points in the fourth quarter, steeper than the forecast 120 basis point drop, noted Richard Chamberlain of RBC Capital Markets.

“We think this is mainly due to currency mix, a delay in the start of the spring collection to the first quarter and lower full-price sales than expected in the second half of the fourth quarter,” he said.

Full-year profit at the group rose 7 percent to 3.37 billion euros on the back of sales gains and growth across all geographies and all formats, with a portfolio that includes Zara, Bershka, Pull & Bear and Massimo Dutti.

Group sales rose 9 percent to 25.34 billion euros in the fiscal year ended Jan. 31, while earnings before interest, tax, depreciation and amortization were up 4 percent year-over-year to 5.3 billion euros.

In a context of “huge volatility” in currencies and the exceptionally cold weather, the year’s results proved “satisfactory” Isla said. “Inditex is ready to face the future successfully and to grow in the new environment.”

He declined to comment on the recent fluctuations in the group’s share price, including the drop to a three-year low in February after analysts readjusted their price targets due to the effects of a strong euro.

He flagged the fine-tuning of the group’s inventory system with the implementation of radio frequency identification technology across formats, starting with Zara, and the full integration of its store inventory with those in its online warehouses, as part of the “technological transformation” of the business.

Carlos Crespo, formerly the group’s internal audit director, was named chief operating officer, in charge of the coordination of IT, logistics and transport, works, procurement and sustainability departments. He will report directly to Isla, and will focus primarily on the digital transformation of the company and reinforcing the group’s integrated store and online business model.

Paula Mouzo, previously internal audit deputy director, will succeed Crespo as internal audit director.

The group has also “optimized” over 80 percent of the “sales surfaces” in the world, Isla said, replacing and absorbing smaller stores in the process.

Unlike many competitors who have fallen victim to overexpansion, the group’s flagship brand Zara, despite its venerable age (the first store opened in 1975), remains unencumbered by a troublesome store portfolio.

“Zara has avoided the overexpansion temptation that has hit both H&M and Forever 21. In the U.S., its fleet is much smaller, and its stores are much smaller than [those of the competitors], which are now trying to retrench, even though it still has strong flagships, like the one on Fifth Avenue….It’s not in every mall, and we see that as an advantage,” said Craig Johnson, president of forecasting firm Customer Growth Partners.

When it comes to the U.S., Zara, which is perceived as being edgier and more fashion-forward than brands like Uniqlo or Forever 21, has a smaller audience, hence its clustering around key cities, he said.

Isla for the first time broke out online sales, which generated around 10 percent of the group’s total revenues in 2017 — “already a significant contribution,” registering a 41 percent leap.

A number of initiatives are underway at Zara in order to encourage the flow between the two worlds, from an augmented reality app due to launch in April to new automated click-and-collect pick-up points in stores.

Isla said the chain’s online-focused pop-up store currently being tested in London’s Westfield — based on click-and-collect services — will be replicated in one of Zara’s Tokyo sites as it undergoes renovation later this year. The company opened the Westfield pop-up while its flagship there is being renovated and Isla said the revamped unit will have a major online focus.

But the chain still has some major catching up to do with its more agile competitors like Amazon, said Florence Allday, beauty and fashion associate at Euromonitor International.

“In order for them to continue to grow in the way they have in previous years, they need to invest [in] and innovate on their digital platforms, they need to place more emphasis on their online presence in general. They [don’t do conventional advertising], and obviously they do marketing, but you don’t see as much social media activity, interaction with Instagram, influencers, that kind of thing. If they want to continue growing, they have to appeal to the customers who are already online,” she said.

As part of its push, the group the day before the results invited a group of journalists to its inner sanctum here — a hypermodern, gargantuan building with IT specialists whizzing about on Segways — to present the complex, real-time management of Zara’s online operations.

A Big Brother series of screens lined the walls serving as windows into the chain’s offices and warehouses around the world, including one screen showing workers in a stockroom in Shanghai testing out Amazon Robotics-style robots, where the object is brought to the employee, and not vice versa.

Members of the team explained how they interact daily with colleagues to obtain feedback on details like the weather and local holidays in order to better tailor the sites to the respective local market. A giant analytical tableau showed the number of shoppers online in real-time across the various markets, including data detailing what they’re looking at, or failed searches, crucial information that is used to adjust the site’s offer and communication strategy.

The web sites of Inditex’s portfolio of brands received 2.42 billion visits in 2017 and at the peak serviced as many as 249,000 orders an hour.

Already present online in 43 markets, Zara in 2017 launched online platforms in India, Malaysia, Singapore, Thailand and Vietnam, with Australia and New Zealand added on March 14.

In the same year, the group opened a net 183 stores in 58 markets, replacing or absorbing 183 smaller stores in the process, bringing the total to 7,475 stores.

The chain, which produces around 60 percent of its garments in Spain, Portugal and Morocco, uses a centralized logistics platform to supply both the bricks-and-mortar and online stores, with two fresh deliveries a week. (To get an idea of volumes, Inditex’s portfolio of brands produced around 1.3 billion garments in 2016, and Zara, as the group’s flagship brand, represents around two-thirds of the business.)

Ten distribution hubs in Spain feed its stores, and there are 19 online warehouses internationally, including three in the U.S.

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