Weather dampens sales at Zara owner Inditex

Robyn Duffy, senior analyst for consumer markets at RSM UK comments on today’s results from Inditex, the Spanish textile conglomerate and owner of Zara: 'Inditex has experienced a slowdown in sales for the first quarter, when compared to last year. Despite this, the business continues its growth trajectory and saw a strong start to the second quarter. Sales between 1 May and 3 June increased 12% on last year with Spring/Summer collections well received by consumers. 

'A stepped-up capital expenditure programme sees the business investing 900 million euros per year into logistics. Yet, despite this heavy investment, gross profit increased 7.3% for the period indicating that early action when it comes to operational efficiencies can pay off. 

'Central to Inditex's success is its fashion-forward approach, allowing the business to pitch itself at the higher end of the fast-fashion market with higher prices to reflect its position. Customer-centricity remains a key strength with innovation in this area a key focus for the company. This is evidenced by Zara's recent announcement to introduce live shopping broadcasts in the UK, following successful trials in China. Plans are also underway to extend this initiative to other markets and could see Zara be the first retailer to bring a QVC style sales channel across its digital channels to the West. 

'Despite sales growth remaining in single digits for the third quarter running, Inditex continues to outperform competitors, weathering logistical and inflationary pressures that have seen others in it’s category faulter. With the improving economic climate, the business shows no sign of slowing in its growth as we move through the year.'