ZARA owner Inditex reported a 22 per cent rise in annual profits yesterday, as expansion in eastern Europe and China offset struggles in its core markets.
However, the world’s largest clothing retailer disappointed investors as it said year-on-year growth in the final three months of 2012 had been the slowest in five quarters.
Spain-based Inditex, which owns Zara’s 65 stores in the UK as well as retailers such as Pull & Bear and Massimo Dutti, expanded rapidly in 2012, opening stores at a rate of more than one per day.
The 482 shops opened in 2012 mean that Inditex now owns more than 6,000 stores worldwide in countries from Macedonia to Ecuador, and it now plans to open another 440 in 2013. The company posted pre-tax profits of €2.36bn (£2.05bn) on a 16 per cent rise in sales to €15.9bn. However, shares fell in Madrid as fourth-quarter profits grew by just 12 per cent.
The growth came despite a fall in sales in Spain, which is by far Inditex’s biggest market with over 1,000 stores.
The firm does not break down its sales by country, although executive chairman Pablo Isla said revenues declined five per cent in Spain last year.
Europe excluding Spain accounted for 45 per cent of sales, with the Americas worth 14 per cent.
Zara’s success has been put down to it quickly moving catwalk trends onto the high street and its fashionable designs at accessible prices. The company’s shares have trebled since 2009.
Inditex, which is now looking to open a fifth Oxford Street outlet this year, said growth in 2013 had continued at the same rate as at the end of last year, with sales growing by 12 per cent.
The company’s shares closed three per cent down.