INDITEX GROUP REPORTS HIGHER PROFITS, SALES
Byline: Dan Burrows
NEW YORK — Led by its Zara division, Spain’s Inditex Group shrugged off the global economic slowdown to post higher sales and profits in fiscal 2001.
For the year ended Jan. 31, the company reported net income swelled 31.3 percent to $296.4 million, or 48 cents a share. That compares with net earnings of $225.7 million, or 36 cents, in fiscal 2000.
Sales for the Arteixo, Spain-based holding company gained 24.3 percent to $2.83 billion from $2.28 billion in 2000. Consolidated same-store sales climbed 9 percent.
Inditex designs and sells clothes under six nameplates: Zara, Massimo Dutti, Pull & Bear, Bershka, Stradivarius and Oysho, with Zara being the revenue and profit leader.
Accordingly, operating income at Zara rallied 34.5 percent to $384 million from $285.4 million in 2000. The Zara division, which accounted for 76.2 percent of Inditex’s total sales in 2001, posted a 21.2 percent sales gain to $2.16 billion from 1.78 billion a year ago. Dollar figures have been converted from the euro at current exchange.
Inditex operates 1,284 stores around the world, of which 507 are Zara units contributing 60.8 percent of the company’s total sales outside Spain.
For Inditex as a whole, European countries other than Spain accounted for 30.8 percent of the firm’s total consolidated sales, with the Americas contributing 15.9 percent and countries elsewhere chipping in 7.3 percent. The company’s home turf of Spain accounts for the remaining 46 percent.
Over the course of 2001, the company added 204 new stores, 58 of which were Zara units. Moreover, Inditex continued to expand its worldwide reach, launching stores in six new markets, including Luxembourg, Ireland, Iceland, the Czech Republic, Jordan and Puerto Rico.
Founded in 1975 by Amancio Ortega Gaona, Zara became the basis for the Inditex holding company, which went public in May 2001.
Looking forward to 2002, the company will launch between 200 and 250 new stores, with the first Zara store opening in Milan in the next few weeks. Capital expenditures are expected to be in the range of $435 million to $480 million.