×
208
Fashion Jobs
PUMA
Manager- Ecommerce Operations
Permanent · Bengaluru
PUMA
Warehouse Manager-D2C
Permanent · Bengaluru
PUMA
Digital Marketing Manager
Permanent · Bengaluru
EXPLODE SERVICES
Quality Assurance Manager Home Furnishing Garments For Noida
Permanent · Noida
EXPLODE SERVICES
Manager ie Garment Exports
Permanent · Noida
THE BANYAN HR CONSULTS
Merchandising Manager For a Seamless Garments Textile co at Coimbatore
Permanent · Coimbatore
OPERA CLOTHING PRIVATE LIMITED
Production Manager For Garment Manufacturing Factory
Permanent · Vapi
GOKALDAS EXPORTS LTD
sr. Manager - Technical - Garments Industry Background
Permanent · Bengaluru
NIKE
Lead Technical Product Manager, ed&a – Apla
Permanent · Bengaluru
NIKE
Senior Security Incident Responder – Cis
Permanent · Bengaluru
FAABIIANA
Executive For Online Product & Order Management
Permanent · NEW DELHI
FAABIIANA
Customer Sales Executive (Female)
Permanent · NEW DELHI
NIKE
Senior Technical Product Manager, Inventory & Order – Apla
Permanent · Bengaluru
NIKE
Senior Technical Product Manager, Finance – Apla
Permanent · Bengaluru
NIKE
Senior Technical Product Manager, Core Erp – Apla
Permanent · Bengaluru
OMREELS BIOSCOPE PVT LTD
Senior Executive Ecommerce
Permanent · MUMBAI
NIKE
Senior Technical Program Manager, Marketing Tech – Dtpo
Permanent · Bengaluru
NIKE
Service Delivery Manager, Operations Center – Tech Ops
Permanent · Bengaluru
NIKE
Director, Security Solutions & Delivery – Cis
Permanent · Bengaluru
NIKE
HR Manager - Nike India Technology Centre
Permanent · Bengaluru
NIKE
Financial Controller - India
Permanent · Bengaluru
NIKE
Software Engineering Manager, Finance & Procurement Technology – cf&c
Permanent · Bengaluru
By
Reuters
Published
Dec 10, 2015
Reading time
3 minutes
Share
Download
Download the article
Print
Click here to print
Text size
aA+ aA-

Zara-owner Inditex upbeat on China as mid-market brands lure shoppers

By
Reuters
Published
Dec 10, 2015

Spain's Inditex, owner of the Zara chain and the world's biggest fashion retailer, is optimistic about long-term growth in China despite the slowing economy, as demand for its affordable fashion stays robust.

Inditex, whose Zara brand has lured shoppers this season with a minimalist straight-cut look, teaming muted colours with ankle boots and trousers, makes about 7 percent of its sales in China, analysts estimate.


Inditex


Sales at the world's biggest fashion retailer in the four weeks from Nov. 1 to Dec 3 rose 15 percent, as did sales in constant currencies in the nine-month period, a tad slower than in previous quarters.

"We can say that Inditex is trading just as strongly in the fourth quarter to date as it did in the third," Societe Generale analyst Anne Critchlow said, adding that the numbers should support the share price.

Many market watchers have flagged the rich valuation of its shares, trading at around 34 times 2016 projected earnings, according to Reuters data, versus 24 times 2016 earnings for rival Hennes & Mauritz. Inditex shares have rallied 37 percent so far this year.

Zara, Inditex's leading label, wowed shoppers this season with a minimalist straight-cut look, teaming muted colours with ankle boots and trousers of all shapes and lengths.

Inditex, a global fashion group headquartered in Spain and operating under nine brands, said growth of store space had been in line with its plans, and like-for-like sales growth had been "solid", without elaborating further.

However, gross margin, a closely-watched measure of profitability, slipped to 58.8 percent from 59.4 percent last quarter, likely affected by a strong U.S. dollar which increases its supplier costs in Asia.

But this affects Inditex less than its peers because it tends to source closer to home, helping it to lend itself more quickly to changes in tastes and deliver them speedily.

Core earnings (EBITDA) rose 18 percent to 3.33 billion euros, in line with a Reuters poll.

The company will hold a conference call at 0800 GMT.Western luxury brands like Burberry and Hugo Boss are suffering from cooling Chinese demand, but mid-market names like Adidas and Zara are faring better.

"We have no doubt that in China the fashion appetite is large, our brands are better and better known and ... we are still feeling very optimistic (over a five-year view)," Chief Executive Pablo Isla told analysts on Thursday.

The group made a sprightly start to the Christmas season as its on-trend offerings allowed it to adapt better than rivals.

Sales from Nov. 1 to Dec. 3 rose 15 percent in local currencies, suggesting a slight slowdown in same-store sales from the previous three months. But analysts said it was still a strong performance given rivals like Top Shop have had a slow start to Christmas trading due to mild weather.

"We can say that Inditex is trading just as strongly in the fourth quarter to date as it did in the third," Societe Generale analyst Anne Critchlow said.

In the nine months to end October, net profit rose by a fifth to 2.02 billion euros (£1.4 billion) on sales up 16 percent to 14.7 billion.

Isla said newer brands like Zara Home, Bershka and Stradivarius had performed particularly well.

Gross margin, a closely-watched measure of profitability, slipped slightly to 58.8 percent, as the strong dollar pushed up prices of garments sourced in Asia, though this affects Inditex less than its peers.

Inditex sources more goods in or near Europe, helping it adapt more quickly to fashion tastes and speedily deliver new ranges.

Inditex shares, up 37 percent this year, were down 1.5 percent by 1037 GMT, versus a 0.7 percent fall in the European retail sector .SXRP.

Many market watchers have flagged the rich valuation of the stock, trading at around 34 times 2016 projected earnings, according to Reuters data, versus 24 times for rival Hennes & Mauritz.

$1 = 0.9092 euros


 

© Thomson Reuters 2022 All rights reserved.