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Zara parent fast-tracks online expansion

Clothing retailer Inditex has announced the launch of online platforms in nine new markets and says it will open in 10 more this autumn to meet its 2020 vision.

Zara launched an online store in Brazil during the first quarter, and has recently inaugurated its platforms in Morocco, Egypt, Lebanon, Israel, Serbia, Indonesia, the United Arab Emirates and Saudi Arabia.

This autumn, Inditex said it will launch Zara online platforms in South Africa, Qatar, Kuwait, Bahrain, Oman, Jordan, Colombia, Philippines and Ukraine.

Last year, Inditex chairman and outgoing CEO Pablo Isla announced all products from the company’s brands will be made available online by 2020, including markets where it does not have any stores. 

Inditex posted a 5 per cent increase in net sales in the first quarter from February 1 to April 30, which, according to the company, has reached a new record of €5.93 billion ($9.48 billion), driven by the ongoing digital transformation of its integrated store and online sales platform.

Store and online sales increased by 9.5 per cent in local currencies from May 1 to June 7 and from February 1 to June 7, sales increased 6.5 per cent in local currencies.

During the first quarter, the company has opened new physical stores in 23 different markets and is also in the process of expanding, refurbishing and absorbing stores as part of the process of differentiating its sales footprint.

“Among the stores worth highlighting are the Zara store that opened in Hudson Yards in New York, in the US, one of the world’s highest-profile retail developments, the new store on Rue Jean de Rouiffe in Cannes, France, and the store in the Time World Mall in Daejeon, South Korea,” Inditex stated.

Massimo Dutti also opened a new store in Ibiza fitted with ‘scan-and-shop’ technology and click and collect. The store also features the brand’s new ‘style advisor’ and ‘express alteratrions’ services with same-day collection or delivery in three hours.

The brand also opened a new store in the Manama shopping centre in Bahrain and flagship stores in Seoul, South Korea and Vladivostok, Russia, in the Kalina Mall, which also welcomed Bershka, Stradivarius, Oysho, Pull&Bear and Zara Home stores during the quarter. Oysho made its debut in Latvia and Singapore and opened a huge flagship store, spanning over 2200sqm, in Mallorca, on the emblematic Paseo del Born, while Stradivarius opened its doors on France’s Cote d’Azur, specifically in Cagnes-Sur-Mer, and Zara Home opened its maiden store in Bulgaria.

According to Inditex, all of these new stores are fitted with the latest customer-oriented technology and all of the breakthroughs on the eco-efficiency front, bringing the store count meeting the group’s green criteria to 90 per cent of the total, in line with its commitment to making the platform fully sustainable by 2020.

Isla had said earlier all of the group’s brands will be adopting an integrated stock management system by 2020 in all the countries where there is a physical store presence.

Other than Zara, the world’s largest clothing retailer also sells the brands, Massimo Dutti, Pull & Bear, Bershka, Stradivarius, Oysho and Uterque across its network of almost 7,500 physical shops. It also operates online in 49 markets.

Underpinned by sales growth in all geographies and at every brand, the group’s solid operating performance lifted net profit to €734 million, a growth of 10 per cent year-on-year.

Excluding the effect of IFRS on leases from February 1, EBITDA grew 9 per cent, EBIT 7 per cent and net profit 7 per cent.

“The recent figures demonstrate solidity of the company’s model, whose profitability and cash flow generation continues to grow owing to the group’s commitment to customer-driven quality fashion,” Isla said, emphasising the “strong momentum in the digital transformation of the integrated store and online sales platform and in sustainability as a key pillar of the company’s strategy.”

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