The world's biggest clothing retailer, Zara-owner Inditex, has reported a 10 percent jump in annual net profit as strong growth in emerging markets and increased online presence outweighed negative currency effects. Ciara Lee reports.
It zips the latest trends from the runway to stores in a matter of days - and sales at Inditex are showing no sign of slowing down either. The world's biggest clothing retailer and owner of Zara reported a 10 percent jump in annual profit. Strong growth in emerging markets and an increased online presence has outweighed negative currency effects with profit growing to over 3 billion euros. (SOUNDBITE) (English) WORLD FIRST, CHIEF ECONOMIST, JEREMY COOK, SAYING: "The fashion is cheap, the fashion is dependable, the quality is good. I've had this jumper for three or four years and you know, it's still hanging in there. So in the grand scheme of things, shoppers know that in a climate where prices are likely to be rising, wages are likely to be stagnant, and if they want to spend money on a little bit of quality, they are likely to get it from this company." The company opened stores in 56 countries during the year, including first openings in New Zealand, Vietnam and Paraguay. It also launched online sales in Turkey with plans for India later this year. Inditex reports in euros but makes more than half of its sales in other currencies. Falls in the value of currencies like the Mexican peso and the Russian rouble against the euro can affect earnings and profit margins. Sales at constant exchange rates rose 13 percent in the first six weeks of the new financial year. But that implies a slowdown in like-for-like sales from recent years after a period of exceptional growth. Also feeling currency pressure - rival retailer H&M. It reported a 1 percent drop in local-currency sales for February, substantially lagging analyst expectations of a 6 percent rise.