The owner of the Zara chain signalled it was not immune to cash-strapped European markets, where cut price competition combined with a cold spring and foreign currency moves to drive down profit margins after a particularly strong 2012.
Inditex, which owns eight brands including upmarket Massimo Dutti and teen label Bershka, said net profit rose one per cent to €951m (£795.7m) in the six months ended July.
The gross margin slipped to 58.6 per cent of sales versus 59.6 per cent the year before, likely hit by price reductions in austerity-hit southern Europe, higher raw material prices and currency effects, including a weaker yen. Inditex, with 6,104 stores in 86 markets, has more than 90 shops in Japan. Inditex’s home country of Spain still accounts for 19.3 per cent of the group’s sales, albeit down from 21.5 per cent a year ago. However, the group said yesterday sales in Asia, Australia and Africa had overtaken Spain to account for 21.7 per cent of the total, up from 20.2 per cent a year earlier.