Inditex, owner of Zara and the world's biggest fashion retailer, reports a 5 percent rise in 2014 profits. As Hayley Platt reports, its CEO says it's looking at three new markets and a bigger online presence.
ATTN CLIENTS - PLS USE THIS UPDATE WITH CEO COMMENTS AND A CORRECTION. A Coruña in the north-western corner of Spain, a tourist hotspot and home to Zara's first store. Just a short distance away in Arteixo, its parent company Inditex's HQ. A family owned business, founded in 1975, it's now the world's biggest fashion retailer. Overall sales role 8 percent to over 18 billion euros, meeting expectations. And full year profits for 2014 increased by 5 percent, largely thanks to an economic recovery in its biggest European markets. CEO Pablo Isla expects strong growth this year too. (SOUNDBITE) (Spanish) INDITEX CEO AND CHAIRMAN, PABLO ISLA, SAYING: "In the online world we are going to enter three new markets, Hong Kong, Taiwan and Macau, so we will be present in 30 markets at the end of the financial year." He also sees Russia as a key market, despite the economic slump due to the Ukraine crisis. (SOUNDBITE) (Spanish) INDITEX CEO AND CHAIRMAN, PABLO ISLA, SAYING: "Russia is a market where we think we are going to have significant development in the medium to long term. On the other hand, I can say that our business is going very well, both from an operational point of view and also on the sales side." Inditex has faired better than some during the economic downturn. Analysts put it largely down to its 'fast fashion', delivering designs from factory to store within 2 weeks. Anita Balchandani is from OC&C Strategy Consultants. SOUNDBITE: Anita Balchandani, Partner, OC&C Strategy Consultants, saying (English): "The ability to produce cost effectively in small runs which means they're never left with unsold inventory that they then need to mark down quite extensively which seems to be the bane of many fashion retailers and I think that unique formula of operating model which has been at the core of Inditex still hasn't gone out of fashion and is still quite hard for people to replicate." Inditex has made major investments in logistics and online platforms to help it compete with rivals like Sweden's H&M, Britain's Asos and Germany's Zalando. It's extended its HQ by 10 percent to accommodate a growing number of staff. And they're now set to receive a share of up to 2 percent of the profit - a similar scheme operates at H&M.