Inditex has increased sales and profits across its UK portfolio despite what it described as a “sharp” decline in consumer spending and continuing economic uncertainties.
However, in the current financial year Inditex - which also runs Bershka, Zara Home, Massimo Dutti and Pull and Bear stores in the UK - will only open a handful of shops here because of caution about trading conditions.
At the group’s largest chain Zara, which has 65 UK stores, sales rose 13% to £310.6m in the year to January 31. It also managed to return to profit of £618,692 after a loss of £20m the year before, largely because of investment in expansion.
Bershka reduced its pre-tax loss to £1.5m compared with £2.9m the previous year. Its sales climbed 35% for the year and like-for-like sales exceeded management expectations. No new stores were opened in the reporting period but it has since opened a new look shop on London’s Oxford Street close to Oxford Circus.
Sales at Zara Home climbed 22% and turnover at womenswear chain Massimo Dutti was up 23% on the previous year. There are no plans at present to open more Massimo Dutti stores after last year’s like-for-likes were “below management expectations”.
Planet Retail analyst Carlos Hernandez said Inditex will eventually extend its UK presence but this year its focus is firmly on other markets.
“The push Inditex is going ahead with is more towards Eastern Europe and Asia,” he said. “All western European markets are consolidated and very competitive.”
He said Inditex had largely focused on Zara in the UK but it is now been working on positioning its other fascias. “Last year Inditex opened new Oxford Street flagships for Massimo Dutti and its young fashion offer Pull and Bear,” he said. “This year it is planning to bring womenswear offer Stradivarius to the UK market.
Hernandez said that there is a lot of scope for Zara in the UK, because there are only 90 stores here. “If you look at a similar sized market like Italy, Inditex has about 300 stores,” he said. Inditex said it does not comment on the performance of individual markets.
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