Galician-based Inditex has overtaken Sweden’s H&M as the most profitable fashion retailer in the world, according to its latest financial results released Wednesday.
Inditex said its net profit in the financial year to January rose 12 percent to 1.93 billion euros as sales climbed 10 percent to 13.973 billion. In its latest financial year, H&M booked net income of 1.775 billion, a fall of 15 percent.
Inditex, founded by Spanish rags-to-riches billionaire, Amancio Ortega, had already surpassed its Swedish rival in terms of sales and market capitalization.
The group had 5,527 shops at the end of January after investing 864 million euros to open 483 new outlets over the year. Investments included the acquisition of emblematic outlets for its leading Zara brand on Fifth Avenue in New York and Corso Vittorio Emanuele in Milan.
It plans to open between 480 and 520 outlets this year, including 150 in China where it is aiming to have 425 sales points in 50 cities. It also intends to start e-commerce sales in China. Inditex’s sales in Asia last year climbed 30 percent.
Inditex is also planning to bring its Massimo Dutti brand to the United States and Canada, its Stradivarius brand to Mexico and its Zara Home brand to Brazil.
After continuous expansion overseas, Spain now only accounts for about a quarter of Inditex’s sales. However, the good news on the home front was that sales rose again after slight falls in the past three years.
Inditex also reported that sales in local currencies in the first six weeks of this year were up 11 percent from the same period a year earlier.
Chief Executive Officer and Chairman Pablo Isla said the group plans to maintain sales space growth of between 8 to 10 percent over the next three years.
Isla was the highest paid executive in Spain last year. According to Inditex’s corporate governance report, the man who took over the reins of the company from Amancio Ortega received 4.3 million euros in cash and shares worth 13.7 million.
Inditex is proposing to pay a total cash dividend on last year’s earnings of 1.80 per share, up 12.5 percent from a year earlier. As the company’s leading shareholder with a 59-percent stake, Ortega will receive 665.3 million euros.