Belle wether

11 December 2014 By Fiona Maharg-Bravo

The Zara parent is enjoying a strong start to the winter season. Some retailers blame poor sales on poor weather. The Inditex business model means it can respond quickly to shoppers’ needs and tastes. Its shares are pricey. But that’s because there’s clear growth potential.

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Inditex said says sales in local currency terms increased 14 percent from Nov. 1 to Dec. 8 this year, shrugging off mild weather that has hurt some other European retailers.

Inditex reported a 7 percent growth in sales to 12.7 billion euros in the nine months to Oct. 31, 2014. Excluding the effects of currencies, sales were up 10.5 percent.

Net income grew 1 percent to 1.7 billion euros in the same period. Gross margin was 58.9 percent, 100 basis points lower than the same period a year ago. Inditex said it expected margins to stay broadly stable for the full year.

In the first nine months of 2014, the company opened a net 230 new stores in 50 countries and launched online platforms in South Korea and Mexico in the last quarter, taking their online presence to 27 markets.

At 1136 GMT, Zara shares were up 2.5 percent to 22.9 euros a share.

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