Profits back in fashion for Zara owner

THE owner of the Zara fashion chain yesterday reported a five per cent rise in profits, fuelled by hundreds of store openings last year.

Inditex’s net profit hit £1.17bn in the year to 31 January.

The company opened 343 new stores last year which helped to drive sales.

The Spanish firm – which sees 70 per cent of its sales in other countries – is aiming to open 425 new shops this year.

Its first Indian outlets have been earmarked for May openings.

The company has a total of 4,607 stores with 91 of those in the UK.

There are plans to launch an online store, coinciding with the autumn and winter season.

Chief executive Pablo Isla said: “Our priority is to focus growth in Europe and Asia. We see significant opportunities in Eastern Europe [and] the Russian Federation, and there is a great potential to expand profitably in Europe for many years, as our market share is below one per cent in most countries.” He added that internet sales were also very important.

Meanwhile, analysts responded positively.

“The big thing about these results is that suddenly you’ve got like-for-like sales popping back into positive territory,” said Anne Critchlow, of Societe Generale.

Shares rose by around three per cent after the trading update.

Critchlow estimated like-for-like sales growth of six per cent in the fourth quarter and up to five per cent growth in the first six weeks of the new financial year.

Inditex does not break out like-for-like sales.

The company, whose other brands include youth label Bershka and homewares store Zara Home, is opening more than a store a day with more than 40 per cent of new store space in 2010 earmarked for Asia.

The company said it wants a presence in 80 countries as the new markets were targeted.