Opinion: Forget about plunging profits, Zara still leads the fashion pack

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When a retailer’s profits nosedive by half, alarm bells would usually sound. But Zara is an unusual retailer.

When Zara, one of the UK high street’s most formidable operators, posted a 57% slump in pre-tax profits across its UK business in the year to January 31, a sharp intake of breath seemed, on the surface, entirely warranted.

But do spiralling profits mean Zara is struggling in the UK?

To answer, this we have to look at the reason behind this profit plunge. 

It’s certainly not down to dwindling sales. Despite a stagnant fashion market in the UK, Zara managed to notch up an impressive 10% rise in revenue to £772.5m over the past year.

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