Zara owner reports slower growth in sales, profit

Madrid (AFP) - Spanish textile giant Inditex, owner of the fashion brand Zara, revealed Wednesday slower profit growth as it pursued a global expansion beyond the fragile economies of Europe.

Inditex said net profit in the nine months to October 30 edged up one percent from the figure for the same period a year earlier to 1.67 billion euros ($2.3 billion), a far cry from the 27-percent leap in profits it reported a year ago.

Sales rose by five percent to 11.93 billion euros in the same period; a year ago they had shot up by 17 percent.

"The results for the interim nine months 2013 show that Inditex continues its global, multiconcept, multi-channel growth," said a statement by the group, which has grown from humble beginnings in the northwestern Spanish region of Galicia to reign over 6,249 stores in 86 countries.

Inditex said it now employs 124,880 people in a fashion empire that includes the brands of Bershka, Massimo Dutti, Oysho, Pull and Bear, Stradivarius and Zara.

The group said its operating costs were "tightly managed" but nevertheless rose by seven percent as it opened up new retail space.

Inditex said expansion plans for its 2013 business year, which ends January 31, were "on track". The group plans to open about 500 large stores, enlarge 100 global flagship stores and introduce a new image to key stores around the world.

The group said it now had 4,545 stores in Europe, 536 in the Americas and 1,168 in Asia and the rest of the world. Inditex said it had rolled out online sales in Russia and now planned to launch e-commerce operations in South Korea and Mexico next year.

In an encouraging sign in the run-up to the key end-of-year sales period, Inditex said sales rose by 10 percent between November 1 and December 8 after excluding the impact of currency variations.