Inditex expands global store network on back of rising first-quarter profit

With the world’s main commercial streets already clogged with clothing shops, big fashion retailers are increasingly obsessed with opening flagship stores that will make them stand out from the crowd.

Inditex, the parent company of Zara and other popular fashion brands, is no exception. Every year, the Galician-based group devotes more space in its corporate earnings report to its new store openings.  And this year, it is boasting eye-catching new premises in Madrid, Chicago, New York, Mexico, Sao Paulo and elsewhere.

In a report released on Tuesday, the textile giant said that it opened 63 stores in 27 countries in the first fiscal quarter (February 1 to April 30), bringing its worldwide network to 6,746 stores in 88 markets.

Zara will launch its online sales platform in Hong Kong, Taiwan and Macao in time for the autumn/winter season

Zara, the group’s best-known brand, represented the most store openings, followed by Massimo Dutti and Stradivarius. The home goods brand Zara Home is also being bolstered with 19 new stores.

While Spain still represents Inditex’s biggest market, it is also the country where the company has shut down the most establishments. In late April it had 1,813, nine fewer than in December.

Meanwhile, growth remains strong in Russia (472 stores) and China (509), which is now Inditex’s second-largest market.

The company also announced that “Zara will launch its online sales platform in Hong Kong, Taiwan and Macao in time for the Autumn/Winter season.”

Rising sales and profit

Meanwhile, Inditex’s net sales grew nearly 17 percent during the same three-month period, reaching €4.37 billion, while net profit rose by 28 percent to €521 million.

This represents one of the highest quarterly growth rates ever posted by Inditex. So far, 2012 was the group’s best year.

Inditex founder Amancio Ortega, a media-shy businessman from the northwestern Spanish region of Galicia, reached a new financial milestone when his fortune moved past the €60 billion mark for the first time in March of this year.