Spain’s Inditex sees 41% increase in Irish unit’s online sales

Set up in 2007, ITX originally managed all of Inditex’s online sales, including Spain. But after it was hit by tax avoidance claims in 2011, the company has gradually moved its European online operations to Spain, managing them through a unit called Fashion Retail.

However, the Irish unit – a subsidiary of a Dutch company called ZARA Holding II BV – remains active. It had seen its share of Inditex’s business steadily decline to 2014’s figure of €225.5 million, but over the course of 2015, turnover increased to €317.86 million, closer to its 2013 figures, despite not having entered new markets or set up new lines of business.

ITX, which employs just 19 people, reported profits of €54.8 million for 2015

ITX, which employs just 19 people, reported profits of €54.8 million for 2015, up from the €45.8 million of 2014, and paid tax of €7.8 million on Ireland’s generous 12.5% corporate tax.

By adding ITX’s results to those of Fashion Retail, Inditex’s Spain-based unit covering 20 European countries, a picture emerges of Inditex’s online sales in its biggest markets, something the company has tried to avoid, lumping them in with those of its stores. Pablo Isla, who took over as Inditex chairman after founder Amancio Ortega retired in 2011, has repeatedly insisted that the two business lines are complementary and refused to provide details of online sales.

In the world’s 23 biggest markets, global sales of Inditex, led by its flagship Zara chain, for 2015 were €1.157 billion, a 39% increase on 2014. Bearing mind that the company’s total sales for that year were €20.9 billion, online sales must now make up at least 5.5% of its global total, and that is without taking into account online sales from China, Russia, and Mexico.

Fashion Retail reported turnover of €840 million for 2015, up 38.5% on the previous year.

In March, Inditex reported sales worth €20.9 billion for 2015, representing a 15.4% rise from the previous year.

The Spanish textile giant, which as well as Zara, owns Massimo Dutti and six other brands, posted a net profit of €2.88 billion, up 15% from 2014.

All eight brands experienced sales growth last year, particularly Zara Home, which saw a sales increase of 21.5% on the back of new store openings. It was followed by the group’s best-known brand, Zara, whose sales grew 17.5% last year.

The Spanish Tax Agency launched a campaign this year to prevent multinationals such asTwitter, Apple and Google from transferring their profits to tax havens. It has already opened an investigation into Apple in Spain, while a team of inspectors searched the offices of Google in June.

English version by Nick Lyne.