Spain’s style retail big Inditex, proprietor of in style model Zara, stated Wednesday that its drive to increase internationally helped push up income final yr.
Inditex, one of many world’s largest style retailers, stated in a press release that its backside-line revenue rose by 10 % to three.sixteen billion euros ($three.four billion) final yr.
The corporate — whose manufacturers embrace Zara, Massimo Dutti, Pull&Bear, Bershka and Oysho — subsequently beat its foremost rival, Sweden’s H&M, which booked internet revenue of round two billion euros in 2016.
However the Spanish group’s revenue progress was slower than in 2015 when its backside line had risen by 15 % as weaker currencies in China, Russia and Mexico lowered the worth of gross sales in these markets when translated into euros.
“These are a constructive set of outcomes towards a backdrop of robust prior-yr efficiency,” stated Inditex chairman Pablo Isla.
Revenues expanded by 12 % to 23.three billion euros, “underpinned by progress in all the geographic areas the place the group is current,” Inditex stated.
Europe accounted for round 60 % of its gross sales, Asia represented 24 % and the Americas 15 %.
By comparability, H&M’s gross sales topped the 24-billion-euro mark in 2016.
Inditex stated gross sales progress had continued apace within the new monetary yr, with retailer gross sales rising thirteen per cent between February 1 and March 12 on fixed-foreign money phrases.
The corporate stated that it opened 279 new shops in its enterprise yr, which runs from February to January, bringing the whole variety of shops worldwide to just about 7,300 in ninety three nations.
It entered 5 new markets ?- New Zealand, Vietnam, Paraguay, Nicaragua and Aruba ?- and continued to launch new on-line gross sales platforms in markets all over the world.
Extra new shops
After beginning on-line gross sales in Singapore and Malaysia this month, Inditex plans so as to add such providers in Thailand and Vietnam within the subsequent few weeks, and in India through the second half of the yr.
The corporate doesn’t present gross sales figures for its on-line gross sales — which it started comparatively late, in 2010 — however Isla stated Web gross sales had a decrease profitability than the remainder of its exercise.
Inditex stated it expects an analogous fee of latest retailer openings in 2017 as in previous years and would proceed its technique of opening flagship shops in prime purchasing districts and absorbing its personal small retailers into close by huge shops.
The corporate stated it’ll open a 5,000 sq.-metre flagship Zara retailer in Mumbai, which might be its largest retailer in India. Inditex has 21 shops in that market.
It additionally plans to open newly refurbished shops in iconic places in Paris and London subsequent yr.
Based mostly in Arteixo, a small city in northwest of Spain, Inditex makes over half of its garments in factories near its primary markets — in Spain, Portugal, North Africa, Turkey and Japanese Europe.
This enterprise mannequin permits it to get garments to shops a lot quicker than its rivals, who prioritise low manufacturing prices and outsource manufacturing to China, and may react extra shortly to shifting shopper tastes to keep away from extra stock.
Garments made for Zara, as an example, can go from the design stage to retailer racks in a mere two weeks. By comparability the method takes H&M six months.
Store assistants report again buyer reactions, to their managers, who then present suggestions to designers.
Inditex created almost 9,600 new jobs in 2016, boosting its worldwide headcount to shut to 162,500.
It additionally stated it will improve the dividend payout by thirteen % to zero.sixty eight euros per share for 2016.
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