Zara plots further expansion after strong spring and summer collection sales

Zara owner Inditex says that strong demand for its spring and summer collections have sent its first quarter sales and profits up 7.1 percent and 11.1 percent respectively.

It said that for the three months to the end of April, it had net sales of Eur8.2billion (£6.9billion) and pre-tax profits of £1.4billion. Inditex added that its gross margin rose 13 basis points to 60.6 percent.

It added that the good performance it saw in the first quarter has continued into its second, with store and online sales up 12 percent versus the same period last year. Inditex added that because it sees “strong growth opportunities”, around the world it is to invest £1.5billion over the next two years to expand its logistics capabilities.

One of the initiatives Inditex is about to launch in markets like the UK and USA is “livestream shopping”, which enables customers watching fashion shows on its website and app to easily buy the clothes they see on screen, while they watch.

Although Inditex’s had a successfully trialled livestream shopping in China, Global Data analyst Alice Price said that it might not immediately click with shoppers in the West.

“Despite its popularity in Asia, live shopping remains much less prevalent in Western countries, so only time will tell as to whether it will be successful in gaining traction with shoppers in these regions,” she said.

Aside from Zara, Inditex owns the homewares retailer Zara Home, Massimo Dutti, Oysho, Pull & Bear and others. It has just under 5,700 stores worldwide.