Zara owner Inditex boosts profit as it doubles down on tech
The owner of Spanish retail giant Zara has posted a sharp rise in profit as increased focus on its online platform helped cut costs.
Inditex today reported a 12 per cent rise in net profit to €2.7bn (£2.3bn) in the nine months to the end of October, while revenue was up 7.5 per cent to €19.8bn.
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The company, whose brands also include Massimo Dutti and Bershka, also said it expected like-for-like sales growth of between four and six per cent for the full year.
Inditex – the world’s largest retailer – has proved resilient to challenges facing the wider sector, in part thanks to its tight control of inventory, enabling it to avoid drastic discounting.
The firm has also shut smaller stores as it focuses on large spaces in prime shopping areas, which it combines with online sales via its web page and mobile phone app.
Inditex said its global online sales launches were on track as it rolled out its digital platform in South Africa, Colombia, the Philippines and Ukraine in September and October.
The company also said it has appointed French tech entrepreneur Anne Lange to its board, in a further sign of its doubling down on digital.
“There’s been little in the way of good cheer for retailers in general this year, however it’s not all doom and gloom, and Zara owner Inditex has been one of the few players in this space that has managed to cope with the changes to the retail environment,” said Michael Hewson, chief market analyst at CMC Markets.
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Inditex said it expected full-year capital expenditure of €1.4bn for the full year, driven mainly by its acquisition of prime retail space.
The Spanish firm will announce its annual results in March.