FASHION CHAIN Zara made a loss of €236,000 from its nine Irish stores last year, compared to a profit of €1.4 million the previous year.

Sales at Zara’s Irish operations increased by 11 per cent to €51 million in the year to the end of January 2009, a period in which it opened one new store in Ireland (on Dublin’s South King Street).

However, substantially higher costs over the period meant operating profit was sharply reduced.

There was a pretax loss of €163,000 at the company, according to accounts just filed at the Companies Office for Za Clothing, which is part of a group of clothing brands owned by Spanish fashion giant Inditex.

Inditex took dividends totalling €2.5 million from its Irish companies last year, receiving €1.2 million from Za Clothing and €1.3 million from Massimo Dutti, which was one of only two Inditex brands to retain a profit on its Irish operations over the period.

The dividends paid to the Spanish parent in the year to the end of January compares to dividends of €4.6 million paid a year earlier, with the fall in the figure largely reflecting the more difficult conditions for Zara.

Massimo Dutti, which targets men and women aged 25-50, made a profit of just under €1 million from its sole store in Ireland, in the Dundrum shopping centre in Dublin, down from €1.3 million the year before.

However, the store, which operates in a higher price bracket than Zara and is more heavily exposed to the struggling menswear market, saw sales fall almost 6 per cent to €5.4 million.

Pull Bear, which has five stores in Ireland, saw its losses deepen to €1.8 million, compared to €121,000 a year earlier, as sales plunged almost 22 per cent to €6.8 million.

Accounts for Bershka Ireland, which also operates five stores, show it made a loss of €1.6 million, almost twice the loss it made the previous year, despite slightly higher turnover.

The other Inditex brand to retain a profit was Stradivarius, which has two stores in Ireland, on Henry Street in Dublin and in Newbridge.

It made a profit of almost €14,000, compared to losses of almost €68,000 the previous year, as sales increased to more than €3 million.

Overall, the five Inditex subsidiaries, which operate a total of 22 Irish stores, saw their combined sales up 4.6 per cent to €77.1 million, despite the subdued retail environment in the run up to last Christmas.

Inditex, which is the largest clothing retailer in Europe, employed an average of 505 people in its Irish subsidiaries during the period.

The accounts for Za Clothing also show that it is due to repay a loan of €1.5 million to an Inditex subsidiary incorporated in the Netherlands by the end of January 2010.

The directors of the company said they planned to open further stores “as soon as suitable opportunities arise”. However, Zara did not enter into any new lease agreements during the year.

Meanwhile, accounts filed at the Companies Office for ITX e-commerce Ireland, reveal a pretax loss of €692,000 during the year to the end of January 2009. This subsidiary of Inditex, which is incorporated in Ireland, specialises in selling Zara Home products over the internet into the European market.

The company recorded sales of €1.85 million over the period.

Although it has not opened any new stores in Ireland this year, Inditex continues to expand worldwide, adding 166 new stores in the first six months of 2009, bringing its total number of stores to 4,430 in 73 countries, it said in September. Inditex’s net sales rose to €4.86 billion in the first half of 2009.

On this basis, it is bigger than the largest US clothing retailer Gap Inc.