Zara owner to trim investment as sales jump

Zara, owned by Inditex, is looking to expand online
INDITEX, the Spanish owner of the Zara fashion chain, expects to trim investment in 2015 after a recovery in its biggest European markets, alongside a store and online expansion, boosted profit by five per cent.

The clothing giant, which also owns Massimo Dutti, Bershka and Pull & Bear, said it expected capital expenditure to fall to about €1.35bn (£977m) this year, from €1.40bn last year.

Chairman and chief executive Pablo Isla said he expected spending to remain below the rate of space growth in 2015 and 2016.

Inditex has been one of Europe’s more robust retailers during the economic downturn because of its fast fashion business model, meaning it can quickly adapt styles to meet changing demand.

It has made major investments in logistics and online platforms since it launched e-commerce in 2010. At the same time, it has slowed openings, closing smaller shops in favour of flagship sites.

It has extended its headquarters to give more room for online teams at Zara and fast-growing Zara Home, as well as more space for pilot stores to test every aspect of its new looks, from window displays to the store layout. It will start Zara online in Taiwan, Hong Kong and Macau in 2015 and said it would open 420-480 new shops in 2015, absorbing 80-100 smaller units into other stores.

Its 2014 net profit rose five per cent to €2.5bn and like-for-like sales rose five per cent, while overall sales rose eight per cent to €18.12bn, in line with forecasts.

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