Zara owner Inditex profits up on strong sales
Spain's fashion retail giant Inditex said Wednesday its net profit rose 6.0 percent in the first nine months of its fiscal year on the back of stronger sales and its international expansion.
The company, the owner of the popular brand Zara and one of the world's largest fashion retailers, posted net profit of 2.34 billion euros ($2.7 billion) in the February to October period, up from 2.2 billion euros in the same period a year earlier.
The results were in line with analysts' expectations, but they represented a slowdown from the 9.0 percent increase in net profit posted during the previous nine-month period.
Net sales overall climbed 10 percent to 17.96 billion euros as Inditex expanded in all markets, mostly in Asia, and introduced same-day delivery of online purchases in six cities.
During the first nine months, Inditex opened 212 stores in 52 markets, including new flagship stores in Madrid, Mumbai, Shanghai and Hanoi.
Based in Arteixo, a small town in the northwest of Spain, Inditex makes over half of its clothes in factories close to its main markets --- in Spain, Portugal, North Africa, Turkey and Eastern Europe.
This business model allows it to get clothes to stores much faster than its rivals, who prioritise low production costs and outsource manufacturing to China, and it can react more quickly to shifting consumer tastes to avoid excess inventory.
The company -- whose brands include Zara, Massimo Dutti, Pull&Bear, Bershka and Oysho -- owns 7,504 shops in 94 countries.