With a strong investment in Spain as its main logistical platform, Inditex is ready to keep on its international expansion, which is paying off so far: at the end of the first half of the year, Inditex net sales totalled 7.2 billion euros, 17 percent more
than the same period from last year. Like-for-like sales have increased by 7 percent.“The
substantial investing effort made in infrastructures in Spain, on which the global expansion for the eight commercial concepts is based. This effort maximizes value in terms of human talent and technology, and promotes growth together with more than 5,500 Spanish suppliers”, summarized Pablo Isla, CEO of Inditex at the General Meeting of Shareholders. It is worthy of mention that one of the main pillars of Inditex’s 2012 strategy is to go back to its origins and strongly invest in Spain.This policy of investment in Spain has been realized through three principal projects: the extension of Inditex’s headquarters in Arteixo, increasing in 70,000 square metres Zara and Zara Home’s commercial premises, the building of Massimo Dutti’s new logistics centre in Tordera, introducing state-of-the-art innovations and, finally, the acquisition of 300 000 m2 in Guadalajara aimed at hosting a new international logistics centre. This policy will amount altogether to a total investment of 450 million euros in Spain and an estimated direct job creation of 1400 new positions.
Through this investment projects, more than 200,000 square metres will be added to the commercial and logistics surface aimed at supporting international growth from Spain. Besides, the group has created 9,267 new more jobs in comparison to the same period from last year, ending 2012 first half with 112,468 employees.
"The drivers are certainly there - the rapid rollout of online sales and fast fashion - but even so it's a spectacular performance," added for Reuters Anne Critchlow, analyst at Societe Generale. "Online is allowing Inditex to access customers that wouldn't be near one of its concept stores," she concluded.
As it is understood by the group, the particularly relevant investments in Spain will be the ground for its international growth. Last additions to its international network were made online, as Zara has launched online sales on September, 5th in China, adding this market to its e-commerce activity, which is carried out in 18 European countries, as well as in Japan and the US. Zara Home and Massimo Dutti will start their online sales in the United States in October.
And the strategy seems to be wright, as in the first half of the year the group’s net profit has increased by 32 percent, totalling 944 million euros and compared to average estimate of 13 analysts compiled by Bloomberg of 893.5 million euros.
Europe, excluding Spain, generated 44 percent of sales and Spain brought in 22 percent of sales. Americas contributed 14 percent and Asia & RoW generated 20 percent of sales, up from last year's 17 percent.
Commenting the news for Bloomberg, Anna Rabeya Khan, a Frankfurt- based analyst at Commerzbank AG, said by phone that “Inditex will definitely be able to keep its sales growth rate for the next three years.” “I’m bullish,” she firmly reiterated.
