Zara-owner shares fall as profit growth slows

Inditex fell the most in 2019, after the Spanish owner of the Zara clothes chain reported the weakest earnings growth in five years. It’s not immune to the retail malaise that has burdened rival, Hennes & Mauritz (H&M), and many others. Even a more generous dividend policy failed to stem the decline, as the shares fell as much as 6%, cutting the gain this year to 12%.

Even though Inditex’s quick-reaction business model gives it an edge over rivals, in adapting to changes in consumer demand or economic trends, the Zara owner still came under pressure from increased competition. Its sales were hit during Christmas, when H&M dropped prices for sweaters to clear inventory.