The Spanish clothing retail chain Inditex, owner of the Zara brand, reported on Wednesday that its net profit for the nine-month period ending in September surged by 27 percent as it successfully navigated weakened consumer spending in cash-strapped Europe thanks to its expansion into the Asian market.
During the observed period, the net profit of the world’s largest clothing retailer amounted to 1.65 billion euros. Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 25 percent to 2.78 billion euros.
Revenues increased by 17 percent to 11.36 billion euros, driven by newly opened stores in high-growth markets such as China. This allowed the company to reduce its dependence on the domestic Spanish market, where consumption is pressured by the second recession in three years.
In total, the Spanish company opened 360 new stores in the first nine months of this year, bringing the total to 5,887.
Inditex is not burdened by debt and has navigated the credit market crisis and subsequent decline in economic activity more successfully than most competitors, thanks to cheap local suppliers in countries like Portugal and Morocco, which have enabled easier adjustments to rising labor costs in Asia.
The production model allows it to turn designer sketches into clothing items on store shelves within two weeks. Therefore, it responds better to cheaper trends and adapts more easily to changes in material prices.
In a statement, it noted that it opened 360 stores during this period, bringing its total global count to 5,887.
Inditex was founded in 1975 by Amancio Ortega and today owns eight brands, including Massimo Dutti, Bershka, Pull&Bear, and Oysho.
In morning trading on the Madrid Stock Exchange, Inditex shares lost 1 percent, now valued at 102.5 dollars.
