Zara owner reports record sales to give the fast fashion giant a profit boost despite tough times on the High Street
- Inditex, owner of a number of fashion brands, announced a 3% rise in net income
- Net sales hit €12.03 billion, a record for the world’s largest clothing retailer
- Group like-for-like sales were higher across all regions including Europe
The owner of the high street fast fashion firm Zara has reported soaring profits and record sales.
Despite currency pressures and difficult conditions for retailers, Spanish group Inditex announced a 3 per cent rise in net income to €1.4 billion (£1.2 billion) for the six months to July 1 giving the company its best ever half-year results.
Shares in Inditex, which also owns Massimo Dutti and Pull&Bear among a number of other brands, have risen by more than 2 per cent since the progress report was unveiled.
Zara is owned by the Spanish group, Inditex, who also own other big named high street fashion brands such as Massimo Dutti, Pull&Bear and Bershka.
Net sales also smashed the previous record of €12 billion (£10.7 billion) for the first time to hit €12.03 billion (£10.7 billion).
Inditex, the world’s largest clothing retailer, said group like-for-like sales rose by 4 per cent and were higher across all regions including Europe and the UK. However, this is a reduction on the 6 per cent growth seen last year.
It said its autumn/winter initial collections have been ‘well received’, estimating that like-for-like sales growth has improved in the second half so far to between 4 and 6 per cent.
This is despite many customers being driven away from the high street due to the tough economy with people having less spare money to spend on non-essential items.
Pablo Isla, chairman and chief executive of Inditex, said: ‘The strong first-half results are the result of a solid sales and operating performance, arising from the unique strength of the group’s integrated and sustainable business model.’
The stronger euro had been expected to take its toll but the group’s profits still increased with its gross profit margin increasing slightly to 56.7 per cent from 56.4 per cent.
The group reported record profits despite the tough economy driving many customers away from the high street.
Many of Inditex’s products are made in the eurozone but it makes more than half of its sales outside the currency bloc.
The strong euro has certainly made an impact, as shown in its total sales figures with local currencies up by an impressive 8 per cent.
The high street empire, who employs over 170,000 people, opened stores in 44 markets in its first half, taking its total number of outlets to 7,422 across 96 markets.
It also recently declared that all of its brands will be available online worldwide by 2020.
It currently has online sales in 49 of its 96 markets.