Zara owner boosts profits, expanding worldwide

MADRID - Spanish firm Inditex, the world's biggest clothes retailer, reported a 12-percent surge in net profit in 2011 on the back of worldwide expansion, notably in Asia, it said on Wednesday.

Pablo Isla, Inditex president / Photo: Inditex

Net profit for the year stood at 1.932 billion euros ($2.56 billion), the company said, after it opened first stores in five countries including Australia, spreading its high-street presence to five continents.

The figure was slightly higher than market expectations, with analysts polled by Dow Jones forecasting 1.92 billion euros.

Net sales for Inditex's trading year, which it counts from February 2011 to January 2012, rose by 10 percent to 13.793 billion euros, it said. Its adjusted figure for earnings before interest, tax, depreciation and amortisation (EBITDA) also rose 10 percent to 3.258 billion euros.

Out of 483 new stores opened in 2011, 132 were in China alone. The firm now counts 5,527 stores in 82 countries under marks such as Zara, Pull and Bear, Bershka and Massimo Dutti.

During the year the firm opened its first stores -- all under the Zara brand -- in Australia, Taiwan, Azerbaijan, South Africa and Peru. It also expanded in Japan, South Korea and India.

"Following its debut in the Australian market, Inditex further cemented its role as a global fashion retailer with stores on five continents," the company said in its earnings statement.

Inditex now employs more than 109,000 people worldwide.

It said it planned to keep up the pace in 2012, opening between 480 and 520 new stores worldwide, plus an online Zara shop later this year in China, which it has identified as a key target for expansion.

"Zara will begin offering its fashions online in China during next winter season, extending its e-commerce business to one of the fastest-growing markets for Inditex concepts," it said.

Inditex's worldwide performance has helped it perform well despite worsening economic conditions in its native Spain.

Following the earnings announcement, the price of shares in the firm rose by 0.60 percent at the start of trading on the Madrid stock exchange on Wednesday.