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Inditex yearly profits up two per cent

Inditex has had a two per cent rise in full-year profit. Inditex, the owner of Zara, is the world’s biggest clothing retailer. Unlike many in the troubled apparel sector, Inditex, based in Spain, has been able to avoid heavy discounting thanks to its tightly controlled inventory and its ability to get looks on sale in a few weeks allowing it to respond to fast-changing trends.

Online sales grew 27 per cent in 2018. Inditex estimated total like-for-like sales growth of between four to six per cent for the financial year. Sales in shops and online at constant exchange rates rose seven per cent in the first weeks of the new financial year. Total dividend for the financial year would be an increase of 17 per cent.

The company launched Zara online in 106 new markets in November and benefited from favorable comparisons to unseasonably cold weather last year. The company operates with a special kind of business model. Every division commits initially to a small quantity for fashion merchandise and then replenishes it in response to customer demands and preferences. This merchandising strategy enables stores to feature new and different products very quickly.