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Inditex net profit up 10 per cent

Inditex registered a net profit jump of 10 per cent last year. And the momentum has continued this year, with 13 per cent growth in store and online sales in constant currency terms over the past six weeks. Sales at Inditex stores rose eight per cent in the first six weeks of this fiscal year.

Inditex is the world’s largest fashion retailer by sales and seeks to have full integration of the brick-and-mortar stores and online businesses. Among the brands run by Inditex are Pull & Bear, Bershka, and Zara. For all of 2016, Inditex reported a rise in sales at all of its eight brands. Zara alone was responsible for 66 per cent of total sales.

Inditex plans to open between 450 and 500 new stores in 2017 while absorbing 150 to 200 smaller ones. In 2016, it opened a net 279 stores, bringing its total to nearly 7,300. This new strategy leaves plenty of space for the online platform to expand without cannibalizing the brick-and-mortar shops. By closing smaller stores and focusing on flagship stores, customers who aren’t close to these stores could be prodded into shopping online.

Inditex is trying to integrate the two services. For instance, customers can pick up and return online store-bought purchases. They can also order online with the help of a store clerk.