Inditex profits show fashion rivals the way

The owner of Zara has reported a rise of more than 10 per cent in its pre-tax profits after wet weather failed to dent its customers’ appetite for fashion.
While rain across Europe dampened sales in June, late summer sun provided a boost for Inditex, the world’s largest listed retailer. It reported sales of £18.1 billion during the six months to the end of July, an increase of 7.2 per cent from the first half of 2023. Its pre-tax profits rose to £3.6 billion, a jump of 10.6 per cent.
Inditex said that its autumn-winter collections had been “very well received” by shoppers, with sales ahead by 11 per cent between August 1 and September 8, compared with the same period last year.
The group’s strong sales come at a time when many other retailers are struggling in the face of rising costs and a slowdown in consumer spending. Inditex has also successfully dealt with growing competition from online fast-fashion brands such as Shein and Temu. H&M, the Swedish retailer, said that its sales in June were likely to have fallen by 6 per cent in local currency terms compared with the same month last year.
Inditex reported strong growth in Europe, particularly in Spain, its domestic market. Its performance was weaker in the United States, a key area for the group as it plans to expand in the country.
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Sales for Zara, its biggest brand, rose by 5.4 per cent to £13.03 billion during the six-month period. Bershka reported revenues of £1.38 billion, an increase of 16.7 per cent compared with the first half of 2023.
Inditex was founded in 1963 by Amancio Ortega, 88, now one of the world’s richest men, as a family business. Based in Galicia, northwest Spain, it has more than 5,600 stores and is the parent company of Massimo Dutti, Oysho and Pull&Bear, as well as Bershka and Zara.
The retailer is set to launch Zara Streaming, a platform for live shopping broadcasts, in markets including Spain, Germany and Britain. It comes after the rollout of the initiative in China last November. Inditex also will launch Zara’s pre-owned platform in America by the end of October. The donation and reselling site is available in 16 countries at present. As part of the Spanish fashion group’s plan to increase its logistics capabilities, it is investing €1.8 billion from 2024-25.
Óscar García Maceiras, 48, the chief executive of Inditex, said the group’s model “continues to generate opportunities for profitable growth across all concepts, regions and channels”.
Nicolas Champ, an analyst at Barclays, said the confirmed forecast from Inditex highlighted that the retailer wax moving back to “normal” trading, after softer sales earlier in the summer. “Even though sales geographic breakdown suggests a weaker demand in Asia in the first half, this is more than offset by resilient performance in Europe,” he said.
Shares in Inditex, which have risen by 34 per cent over the past year, added another €2.22, or 4.8 per cent, to €48.50 in afternoon trading in Madrid.