Inditex, the fashion retail group which owns Zara, Bershka and Pull & Bear has today reported a continued strong performance with like – for like sales rising 15 per cent to €3.4 billion (£2.7 billion) for its first quarter period of February 1st to 30th April 2012.
Between February 1st and April 30th 2012, EBIDTA was up by €764 million compared to €601 million in the first quarter of 2011.
Expansion of the fashion retail group during the period has boosted its performance with 91 new stores opening across its portfolio, including a flagship on Fifth Avenue in New York which saw stores total 5,618 on April 30th 2012.
Boosting the Spanish retail market is a primary concern for the group and construction work recently commenced on the group’s headquarters in Galicia, which will house Zara and Zara Home in a €100 million investment set to create around 400 jobs.
Simon Chinn, Lead Consultant at retail analyst group Conlumino, comments that the retail giant is way ahead of its competition in the market by developing more sites across the continent.
He commented: “Inditex’s resounding success has come from the development of a diversified portfolio both in terms of the geographical spread of its operations and the number of concepts it trades from internationally.
“This has helped limit its exposure to the dire situation in its domestic market and other austerity-struck eurozone countries.
Despite the precarious state of consumer spend in Spain, which last month saw retail sales fall by almost 10%, Inditex has managed to offset a weaker performance at home, with strong sales growth from Asia, where demand for its fashionable Zara clothes continues to grow. “
Zara is to extend its multichannel reach by launching its online site in China this autumn, while the opening of its first store in Ecuador last month has increased its presence in the emerging markets.
In December last year, the group saw a nine per cent increase in profit for the three month period ending October 31st 2011 to €5.78 billion (£4.86 billion), showing a continuation in sales growth.
Chinn concludes: “Looking ahead, prospects for Inditex remain strong and we believe it will continue to weather the storm of the ongoing financial and debt crises.
“In the last quarter it opened its first stores in Ecuador, bringing the total number of countries it operates in to 85.
“Going forward it will continue to open new stores mostly in emerging markets. Furthermore it is set to launch its online store in mainland China in September, which will further strengthen its position in the region which is becoming its core revenue driver, ahead of Europe.”