Zara owner Inditex announces profit rise amid ongoing global expansion

Helen Cahill
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Zara Sydney Store Opening
The group has been accused of using its global structure to avoid tax (Source: Getty)

Inditex, the owner of various fashion brands including Zara and Bershka, has announced a nine per cent rise in its nine-month profit.

Net profit reached €2.2bn (£1.85bn), and gross margin was 57.9 per cent. The Spanish retailer's earnings before interest, tax, depreciation and amortisation (Ebitda) increased 8.4 per cent, hitting €3.6bn.

Read more: Zara owner posts profit rise of 11 per cent

Store and online sales were up 14.5 per cent in local currencies in the nine months to 31 October, and the company said like-for-like sales growth was "strong".

Inditex is the biggest clothing retailer in the world, and operates in 93 countries with more than 7,200 stores. Its growth over the last year has created 9,245 jobs.

The retailer's chairman and chief executive, Pablo Isla, said: "The company's growth is driving noteworthy job and value creation in our various markets, most particularly in Spain, boosted by simultaneous growth at the group's headquarters.

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"This momentum is the result of sustained investment - logistic facilities and stores - as well as the ongoing development of its integrated online-offline store model."

In September, it opened its first Zara outlet in Vietnam in Ho Chi Minh City, and in October, it moved into the market in New Zealand with a shop in Auckland.

The group has also been opening Zara stores in New York, Nicaragua, China, Canada, Thailand and Saudi Arabia.

Its international presence has been causing controversy, however, as it has been accused of avoiding tax. The Greens in the European Parliament have claimed that the company has saved €585m in tax by using tax avoidance techniques in the Netherlands, Ireland and Switzerland.

ActionAid's head of advocacy, Charlie Matthews, said: “The flaws in the global tax system have once again been laid bare. Big companies seem able to shift money around the world to avoid paying their fair share of tax.

“The UK government and the EU must champion a fairer global tax system which tackles tax avoidance and helps developing countries to find a sustainable route out of poverty. The Prime Minister could take immediate action by compelling UK companies to publicly reveal the tax they pay in every country where they do business, including in tax havens."

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