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Zara Parent Inditex Posts 15% Profit Growth on Strong Sales

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Inditex Zara

Inditex, the parent company of Zara, Pull&Bear and Massimo Dutti has been on a path to dominating fast fashion in the last several years and 2015 was no different—profits at the Spanish company were up 15 percent and the tough retail market seemed to have no bearing on sales.

For fiscal 2015, Inditex said net sales increased 15.4% to 20.9 billion euro ($23 billion), and growth was positive in all regions and across all formats. Profits, which jumped 15 percent, totaled 2.88 billion euro ($3.17 billion).

Company chairman Pablo Isla said, “These figures demonstrate the group’s potential, boosted by the quality and the commitment of all of its employees.”

And those employees grew by nearly 12 percent last year. Inditex generated 15,800 new jobs in 2015 and Isla said investments in head offices, logistics platforms and technology (capital expenditures for the year totaled $1.7 billion) allowed for that job growth.

The industry has continuously looked to Inditex—Zara in particular—as a model for quick-turn fashion, endeavoring to understand just how the company does what it does.

Despite a supply chain process that appears to be winning, Inditex invested more than 700 million euro ($771.4 million) in operating platforms and process modernization over the last five years, not to mention the more than 1 billion euro ($1.1 billion) it committed to bringing in cutting-edge technology to support store and logistics services.

Last year, Inditex created a new logistics platform in Cabanillas, Spain to serve its Pull&Bear and Zara Home brands, and added two “next-generation” hanging garment storage and retrieval systems at the Zara and Massimo Dutti platforms in Spain. And fashion at its Bershka brand will get even faster now that the company has installed a fully-automated garment retrieval system that will deliver more time-effective dispatches.

“In parallel,” the company said in a statement, “There is an ongoing effort to continually fine-tune and upgrade the group’s 10 existing logistics platforms in Spain.”

RFID rollouts also continued in 2015, with the technology up and running in 1,542 Zara stores in 64 markets and Inditex said by the end of this year, the radio frequency identification technology will be in more than 2,000 stores.

Inditex upped its presence around the world, adding 330 new stores in 56 markets. Seventy-seven of those additions were Zara stores, bringing the brand’s total to 2,162, the most recent of which was a global flagship in New York’s Soho neighborhood that opened last week. Inditex will add five new markets for its physical stores this year, including New Zealand, Vietnam, Nicaragua, Paraguay and Aruba.

The company’s online markets expanded, too, bringing Inditex’s e-presence to 29 markets. Zara went online in Taiwan last year, Australia and Japan got Zara Home e-commerce, and Chinese consumers can now shop Pull&Bear, Massimo Dutti, Stradivarius and Oysho online. Online sales will be available in all of the European Union by April once the platforms goes live in Slovenia, Malta and the Baltic States.

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