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Inditex, the Spanish fashion giant, which owns brands such as Zara, Massimmo Dutti and Pull & Bear, said it continues to see strong growth opportunities as sales of spring/summer collections surged by 16%.
"Spring/Summer collections continue to be very well received by our customers. Store and online sales in constant currency between 1 May and 4 June 2023 increased 16% versus the same period in 2022," Inditex said.
"We see strong growth opportunities. We expect increased sales productivity in our stores going forward. The growth of gross space in 2023 will be around 3%," the company, which currently operates in 213 markets, said in its interim 2023 results.
Inditex, which also owns Bershka, Stradivarius and Oysho, expects to drive long term growth by improving the fashion proposition by focusing on innovation, design and quality of collections; enhancing customer experience; and increasing its focus on sustainability.
According to the company, it continues to see a satisfactory evolution of online sales and an increasing participation in the group total. At current exchange rates, Inditex expects a -2.5% currency impact on sales in FY2023.
In Q1 2023, Inditex sales grew 13% compared to the same time in 2022, to reach €7.6 billion ($8.2 billion), owing to strong sales in all geographies and in all concepts.
Its gross profit rose by 14% to €4.6 billion and gross margin reached 60.2%.
The first Zara store was opened in 1975 by Amancio Ortega. The billionaire founder’s youngest daughter, Marta Ortega Pérez, is the chairwoman of the fast fashion giant. Amancio Ortega, who stepped down in 2011, still owns a 60% stake in the company.
As approved in March 2023, Inditex’s Board of Directors will propose to the Annual General Meeting a dividend for FY2022 of €1.20.
Part of its current strategy is to maintain higher prices outside the Eurozone. In the US, Mexico and Saudi Arabia some clothes are up to 91% more expensive than in its home market, Reuters reported.
The Spanish retailer closed its 502 stores in Russia earlier this year due to the Russia-Ukraine war and sold its business to the UAE-based Daher Group.
Under the agreement, Daher will operate in Russia under its own brand but if at some future stage, Inditex wishes to return the country, the deal outlines the possibility of doing so through franchises.
(Reporting by Seban Scaria; editing by Daniel Luiz)
(seban.scaria@lseg.com)