Zara is the best-known brand in the portfolio of Inditex, now the world's biggest fashion retailer by both revenues and global presence. Despite the recent economic downturn, the group has continued to go from strength to strength, opening several hundred new stores each year. Until 2020, that is, when temporary Covid-enforced store closures caused a sharp decline in performance. Instead the group turned its hand to the manufacture of surgical apparel and PPE. The key strength of Inditex has long been the superb efficiency of its manufacturing and distribution system, able to deliver a succession of new designs into stores at a speed which still leaves competitors stumbling. Inditex overtook European rival H&M by revenues at the beginning of 2006, and finally topped Gap in 2009. By early 2020, the group's portfolio housed 7,469 outlets, of which almost 6,400 are directly owned and managed (and the rest franchised). After peaking at €28.3bn in the year to Jan 2020, revenues slipped in ye 2021 to €20.4bn. However, online sales soared by 77% to €6.6bn. Net profit for ye 2021 fell by more than two-thirds to €1.1bn. Retail sales at the main Zara fashion chain and its homewares sister Zara Home were almost €19.6bn in ye 2020. The Zara brand alone accounts for well over a third of group outlets, and more than 70% of operating profits. It is accompanied by another six concepts in all. The next most valuable is Bershka, offering everyday street fashion for a younger market (revenues of almost €2.4bn in ye 2020). Pull & Bear (€2.0bn) targets a youth market with casual stylish sports wear while Massimo Dutti (€1.9bn), offers more elegant designer clothing for men; Stradivarius (€1.75bn) offers a more sophisticated range of casual wear for a younger women's market. Oyshko and Uterque are significantly smaller in size. Although Inditex has a presence in most major global markets, and 96 countries overall, its business is still focused primarily on Europe, where it generates over 60% of revenues. Spain, in particular, still dominates its geographical presence with 1,580 stores. The next biggest by store numbers is Greater China with 600 outlets, but Russia is close behind at 558 stores. Other key markets include Mexico (438 stores), Italy (384), Portugal (334) and France (284). The US has just 99 still, and the UK only 108. The group also has an extensive ecommerce operation covering more than 200 countries. The group is the creation of Amancio Ortega, still the principal shareholder of Inditex, controlling around 59% of the group's equity. Now in his mid-80s, he is Spain's richest individual with a fortune worth around $75bn. In 2011 he retired as executive chairman of the group, passing on that role to Pablo Isla. Carlos Crespo is CEO.
Capsule checked 11th December 2020
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Who are the competitors of Inditex? The group's principal Spanish competitor in Spain is rival chain Mango, as well as Sfera (owned by El Corte Ingles). International competitors include H&M, The Gap and Arcadia. See Fashion & Accessories Sector index for other companies
Historical profile information for Inditex
Adbrands Daily Update 11th Jun 2020: In response to the impact of Coronavirus, Inditex announced plans to reduce its store estate by between 1,000 and 1,200 outlets, mostly older and smaller stores. That's equivalent to around 16% of its current network. Instead it will pivot towards larger "destination" stores while also boosting its ecommerce capability, on the expectation that online will account for as much as a quarter of all sales within two years, from around 14% currently. It said it expects to maintain its current staff headcount despite the closures by shifting employees from the shop floor to expanded ecommerce departments.
Adbrands Daily Update 14th Mar 2019: Inditex continued to defy the retail slowdown with another soliud performance for the year to Jan 2019. Revenues ticked up by another 3% on a reported basis to €26.15bn, with net income of €3.45bn. In local currencies the increase was 7% while the like-for-like growth excluding new openings was 4%. Online alone contributed €3.2bn. The Zara brand (including its homewares line) continues to dominate performance, contributing more than 70% of group operating profits
Adbrands Weekly Update 14th Jun 2018: Zara parent Inditex reported better results for its latest quarter than most rival fashion retailers, but its previously rampant growth has slowed noticeably. Revenues for the quarter were €5.7bn. Same-store sales were up around 5% in the three months to April, down from 6% in the previous quarter and around 10% a year ago. Yet growth is still growth, and Inditex continues to outperform rivals Gap Inc and H&M in that respect. Better still, the company also widened its gross profit margin, a key indicator of performance, to almost 59%.
Adbrands Weekly Update 15th Mar 2018: Fashion giant Inditex - parent of Zara, Massimo Dutti and other brands - reported another year of higher sales for the period to Jan 2018, but growth has slowed significantly, especially in physical retail. Revenues rose 9% to €25.3bn, while profits were up 7% to €3.4bn. However overall like-for-like growth halved from 10% in 2016 to 5%. The star performer, though, was online where sales jumped by more than 40% to €2.5bn. As a result, Inditex said it would accelerate the overhaul of its retail estate, shuttering smaller outlets in favour of big destination stores in city centres. The total number of Inditex outlets decreased for the first time in the final quarter of the latest year, from 7,504 to 7,475 shops, though total selling space continued to rise.
Adbrands Weekly Update 16th Mar 2017: Spanish fashion group Inditex reported another unbeatable set of results for its most recent year. Reported sales jumped by 12% - including a same-store lift of 10% - to €23.3bn. In 4Q alone sales rose by 16% (more than twice the rate achieved by rival H&M in an equivalent period). It said it experienced growth in all geographic regions and across all eight of its brands. Net profit was also up 10% to €3.2bn, and the group is now sitting on net cash reserves of over €6bn. As a result, it plans to raise its dividend to shareholders. Founder Amancio Ortega, who holds 60% of equity, will receive €1.26bn. In the current year, the group said it will accelerate a strategy of closing smaller outlets and replacing them with larger stores nearby.
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