Zara owner Inditex, the world's largest clothing retailer, posted a forecast-beating 14 per cent rise in first-half net profit today as aggressive overseas expansion compensated for tough times in mature markets.
The retail empire, started by Spain's richest man Amancio Ortega, made €717 million, compared to a Reuters forecast of €672 million. Sales grew 12 per cent to €6.2 billion.
Inditex said its local currency store sales rose 9 per cent between August 1st and September 17th.
With eight brands across 78 countries, Inditex has reduced its exposure in Spain to 26 per cent of total sales, down from 28 per cent a year earlier, targeting fast-growing Asia and eastern Europe in particular.
Spain's retail sales fell 3.9 per cent in July, for the 13th month in a row, further evidence that shoppers are still tightening their belts in a country with the highest unemployment in Europe at more than 20 per cent.
Inditex has performed better than many of its rivals at home and abroad during the recent slowdown. Globally, retailers are seeing margins squeezed by higher raw material costs, rising Asian wages and price wars in mature markets.
Hong Kong-listed fashion retailer Esprit, which makes 79 per cent of its sales in Europe, is pulling out of some developed markets including Spain and North America after posting a 98 per cent drop in full-year profit earlier this month.
Swedish fashion group Hennes & Mauritz
All Inditex brands, including upmarket Massimo Dutti and underwear label Oysho, are now online after new launches this month although not all labels are available in all countries where Inditex operates.
Reuters