Business

Inditex profits jump 18% as Zara sales soar

Zara Image copyright Getty Images

Strong global demand for fast fashion helped drive first quarter profits 18% higher for Inditex, the owner of chains including Zara and Pull & Bear.

The Spanish firm reported a profit of 654m euros for the three months to 30 April, meaning staff shared a 42m euro bonus pot.

Sales rose by 14% to 5.5bn euros.

Zara started offering online sales in Malaysia, Thailand, Singapore and Vietnam in the quarter and plans to follow suit in India later this year.

Online growth has helped Inditex to consistently outperform rivals such as H&M in recent years as its fast-fashion model allows it to quickly replicate the latest runway trends into stores in weeks.

While the company also owns brands such as Massimo Dutti and Bershka, Zara accounts for two thirds of group sales.

Inditex opened 30 stores in the quarter and now has 7,385 outlets in 93 countries.

Societe Generale analyst Anne Critchlow said positive currency effects meant she expected profits and margins to rise this year at Inditex.

Meanwhile, US department store chain Neiman Marcus said it had ended talks about a partial or full sale of the retailer, which has a $4.8bn debt mountain.

Its sales have been hit by stiff competition from the likes of Zara and H&M as well as Amazon.

Neiman Marcus reported its fourth consecutive quarterly loss on Tuesday of $24.9m, compared with a $3.8m profit for the three months to April last year, as like-for-like sales slipped nearly 5%.

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