Zara owner Inditex blames flat profits on strong euro
Wednesday 11 December 2013
Zara owner Inditex’s rapid growth is slowing as the Spanish giant, and world’s biggest fashion retailer, saw profits stay flat.
However, the company has so far enjoyed a strong run-up to Christmas, with sales up 10 per cent between November 1 and December 8 compared with the same period a year ago.
The firm distanced itself from competitors in 2012 thanks to its unique vertical integration, with bosses claiming they could get new lines from design table to shop floor in just two weeks.
But in the nine months to the end of October, profits before tax and one-off costs were flat at €2.7 billion, with sales up 5 per cent to €11.93 billion on a like-for-like basis.
Profits were flat because of the strength of the euro, according to the company, although its core European markets have struggled compared with emerging markets that have grown.
The company also revealed that it has created 8757 new jobs in the past year, including 800 in Spain where unemployment remains stubbornly high.
High-end Italian clothing business Moncler said its planned float will be priced at the top end of the expected valuation, meaning it is set to raise between €585 million and €681 million for current private equity owners Eurazeo SA and Carlyle Group.
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