The owner of the Zara fashion chain today vowed to accelerate its store opening programme after beating expectations for first-half profits.
Spanish group Inditex wants to open up to 450 stores in total this year as it goes head-to-head with rivals such as Hennes & Mauritz – up from the 395 it was predicting as recently as June.
The target includes the 160 stores that began trading between February and July, and which contributed to a 20% rise in sales across the group to €2.82bn (£1.9bn).
The fastest sales growth has taken place in Europe outside of its Spanish heartland, including the UK where it has 46 stores.
Zara generates two-thirds of sales for the group and accounts for 36 of the company’s outlets in the UK, with a presence in towns and cities such as Sheffield, Canterbury, Cardiff, Reading and Bromley.
In addition, Inditex has a Zara Home store for interior furnishings in London, seven stores trading as Massimo Dutti and opened two outlets of its Bershka teen fashion chain in the UK.
Net income for the six months was 29% higher at €246.2m (£166.2m), reflecting tight stock control and more of its ranges being sold at full price.
Although the 15% expansion in trading space at its shops around the world were the key driver behind the rise in sales, Inditex said shoppers were also spending more at its older sites.
Like-for-like sales were 4.5% higher during the first half and Inditex said its initial collections for autumn and winter had “been well received by customers.”
Inditex said like-for-like sales were growing across all its brands but the rate was fastest at Bershka and Stradivarius which target younger shoppers.
Retail analysts at broker Dresdner Kleinwort Wasserstein said the company had posted strong results that were ahead of their forecasts for net income of €213m (£143.8m).
References: EGi News 21/09/05
