ZARA OWNER SEES SALES SURGE DUE TO GROWING ONLINE BUSINESS
Inditex Group, which owns such brands as Zara, Pull & Bear, Massimo Dutti, Bershka, and more, has reported a successful year end, with sales rising significantly due to growing online sales.
The company’s net sales rose by 9 percent in fiscal year 2017 to €25.34 billion, underpinned by growth in all of the geographic regions where the group does business. In local currencies, sales growth was 10 percent in 2017. Like-for-like sales rose by 5 percent, with all geographies and all brands delivering growth by this measure.
The revenue from online sales increased by 41 percent, to account for 10 percent of the group total and 12 percent of the total in countries in which it has an online presence.
The chairman and CEO of Inditex, Pablo Isla, described it as a year of “solid growth”, and highlighted, “the unique strength of our integrated stores and online model and its significant growth potential.” He went on to add that “the prescient investments made in technology and logistics in recent years, coupled with space optimization, mean the company is well placed for continued growth across all its markets.”
In fiscal year 2017, the company’s capital expenditure amounted to €1.8 billion and was focused on significantly boosting the development of its integrated and sustainable model of stores and online.
Reflecting this focus, the group has integrated each brand’s online businesses into the entities which operate its physical businesses in each market.
During the year Inditex expanded its online reach by launching Zara online platform in India, Malaysia, Singapore, Thailand and Vietnam in 2017, with the brand’s online store due to go live in Australia and New Zealand today, March 14. Bershka, meanwhile, launched its e-commerce platform in the U.S., Japan, and South Korea, where Oysho also inaugurated its online store.
The company continued to build its online platform in 2017 and early 2018. The group’s websites received 2.42 billion visits in 2017 and at the peak serviced as many as 249,000 orders per hour. The social media profiles of the Group’s eight brands have amassed 121 million followers.
In fiscal year 2017, the group opened 524 new stores in 58 markets. In line with the streamlining strategy announced five years ago, net openings were 183 stores once smaller stores replaced or absorbed by larger stores are taken into account.
In parallel, it carried out major expansion work at another 144 stores and thoroughly refurbished a further 122. In the last six years, 80 percent of the group’s floor space has undergone a makeover with 2,994 new openings, 2,148 refurbishments and extensions and the absorption of 1,046 smaller and older units. As a result, the group ended fiscal year 2017 with 7,475 stores and one new market: Belarus.
During the reporting period it also added new online services, such as same-day delivery in the central areas of Madrid, London, Paris, Istanbul, Shanghai and Taipei, and from today in Sydney; and its next-day delivery service in Spain, France, United Kingdom, China, Poland and South Korea, and also in six Australian cities from today, with the intention to gradually introduce this service in other markets.
Additionally, the company has appointed Carlos Crespo to the new position of chief operating officer (COO), in charge of the coordination of IT, Logistics and Transport, Works, Procurement, and Sustainability departments.
He will report directly to the chairman and CEO, and will focus primarily on the digital transformation of the company and reinforcing the group’s integrated store and online business model. Crespo was formerly the Group’s Internal Audit Director. Paula Mouzo, previously Internal Audit deputy director, has been appointed as new Internal Audit director to replace Crespo.