Pre-tax profits at Zara’s UK business surged 31% to £49.1m after its focus on sales growth and tightening operating expenses paid off.
Total sales increased 8.1% to £494.8m in the year to January 31, 2015. Gross margin increased to 55% from 54.7%.
Zara is owned by Spanish giant Inditex, which also operates fashion chains Pull & Bear, Massimo Dutti and Bershka. It almost tripled its dividend for the full year, paying out £61m compared to £22m the year before.
In a statement filed at Companies House, Zara said its directors’ key aim for its UK business during the financial year was to “strengthen the company’s profitability by focusing on sales growth, while keeping operating expenses under tight control, in order to increase operating margins as a result”. The previous year Zara’s UK pre-tax profits fell 34.5% to £33.9m.
During the financial year, the retailer opened a standalone menswear store in Birmingham in November. Zara, which also sells homeware alongside its clothes, said it plans to invest in new locations as “opportunities” arise.
It has since opened its fifth store on Oxford Street, a 48,000 sq ft glass and concrete flagship at the eastern half of the busy London street. Zara now operates a total of 67 stores in the UK.
Last month Inditex reported a 28% jump in net profits to €521m (£377.2m) for its three months ending April 30. Total revenues grew 17% to €4.4bn (£3.2bn).
Zara declined to comment.
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