Zara owner reports rare fall in profit

June 11, 2014 - 10:05:56 am

MADRID: Spanish global clothing giant Inditex, owner of fast-fashion brand Zara, announced Wednesday a rare fall in quarterly profits even as it pushed ahead with an aggressive international expansion.

Inditex, created 40 years ago in the northwestern Galicia region by railwayman's son Amancio Ortega, said net profit fell 7.3 percent from the same period a year earlier to 406 million euros ($550 million) in the three months to April 30.

It was the group's first reported profit decline since 2009.

Sales rose a modest 4.3 percent to 3.75 billion euros, Inditex said in a statement.

The group said its revenue figure was affected by adverse currency exchanges, adding that in local currencies sales were up 11 percent.

Even in tough economic times, the group has pursued a worldwide expansion policy first installed by Ortega, Spain's richest man and still Inditex's biggest shareholder. Ortega retired as chairman and chief executive in 2011, handing over to Pablo Isla.

"All of Inditex's brands continue to expand internationally," said Inditex, which besides Zara owns major retail brands including Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterque.

Inditex said it opened a net 53 stores in the quarter, growing its global store network to 6,393 stores in 88 markets.

The group said it would hold an annual general meeting on July 15 where it will propose paying shareholders a 2013 dividend of 2.42 euros for each share, of which half was paid last month and the balance would be paid November 3. (AFP)