Brisk autumn start for world’s largest clothing retailer

Inditex, the world’s biggest clothing retailer, reported a brisk start to the autumn season yesterday after first-half profit rose by a quarter, sending its shares more than 3% higher.

The Spanish group, owner of the Zara brand, said sales in local currencies in the six weeks to September 10 jumped 16%, far outpacing the 1% growth rival Hennes & Mauritz saw in August, which it blamed on unseasonably warm weather in much of Europe.

Because Inditex sources its garments closer to where it sells them than most rivals, it is able to respond more quickly to changing demands, and even changing weather.

Sourcing a higher proportion of clothes in Europe also shields Inditex from the impact of a stronger US dollar, the currency used by most Asian suppliers.

“We are satisfied with the very strong start to the season in terms of both geographies and concepts... and based on the flexibility of our business model,” CEO Pablo Isla said.

In the February to July period, sales climbed 17% to €9.42bn, a like-for-like rise of 7%, as cheap oil and credit in Europe and Spanish jobs growth translated into more money in shoppers’ pockets.

Net profit rose 26% to €1.17bn. Growth was particularly strong for the core Zara brand, whose revenues rose 18% in the first half.