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Zara owner says profit edged higher

MADRID, SPAIN: Spanish textile company Inditex, owner of global fashion brand Zara, reported a slight rise in profits in the first half of 2013 on Wednesday, 18 September, saying it had made a solid start to sales in the second half.
Zara said net profit edged up one percent from the same period a year earlier to €951m in the six months to July. Sales rose six percent over the same period to €7.7bn the group said.

But operating expenses also climbed by six percent, reaching €2.9bn, as Inditex expanded its retail spaces including with new store openings.

Inditex operated a total of 6,104 stores by the end July 31 including Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Zara Home. That compared with 5,693 stores a year earlier.

Giving an early insight into the performance for the second half of the year, the group posted a 10% rise in store sales on a local currency basis between 1 August and 14 September.

Inditex's worldwide performance has helped it perform well despite conditions in its home country Spain, which is struggling to emerge from a two-year recession and has an unemployment rate of 26.3%.

In the first half of this year, Spain accounted for 19.3% of Inditex sales while other European countries contributed 44.6%, the Americas 14.4%, and Asia and the rest of the world 21.7%.

The first Zara shop opened in 1975 in La Coruna in north-western Spain, a city that is still home to its headquarters.

Inditex's 77-year-old founder Amancio Ortega, listed by Forbes as the world's third-richest man with $57bn, stepped down as head of the group in 2011, handing over the reins to former managing director Pablo Isla.

Source: AFP via I-net Bridge
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