Jacobo G.’s Post

Inditex, the Spanish owner of Zara, showcased strong performance in FY23 amid a tough global market   🔎 Results from FY23 • Net sales surged 10% to €35.9 billion • Online sales jumped 16% to €9.1 billion • Net income rose 30% to a robust €5.4 billion   The company successfully integrates physical and digital retail, enhancing customer experiences with advanced in-store technology and efficient online services.   Despite a slight reduction in store count, Inditex expanded its commercial space and plans to invest €1.8 billion in technology and logistics in 2024.   The brand continues to target upscale markets, differentiating itself from fast-fashion competitors and preparing to launch new livestream shopping events in the US and UK. Want more retail insights and visualisations like this? 🔗 Click here: https://lnkd.in/d-z25aM #RetailInsight #Sankey #RetailEconomics #FY23 #FY23Results #Zara #Retail #RetailResults #Fashion #Inditex #Retail #FinancialYear2023

Did you know that ZARA, the fashion giant, is actually a Spanish brand? It's part of a company called Inditex, founded by Amancio Ortega in 1963. Look at this data: 127.000 billion euros, this is the value that Inditex has in the stock market right now, 5 times more than in 2008. Every time Inditex opens a store around the world (it had reached 7,500 and now has 5,800 bigger ones), it manages to sell €7,200 per square meter. And it obtains more than 900 euros in net profit (after taxes) from that square meter. Now multiply that data by the 4.5 million square meters of stores it has distributed around the world. Spanish companies know a thing or two about #retail, #fashion, #marketing #operations, #technology and #growth

What’s behind Inditex's continued success? Here are 3 key reasons in my opinion... ❇ Shift to a More Premium Image for #Zara To safeguard its flagship brand, which contributed 72% of Inditex's total revenue in 2023, Zara has been gradually shifting towards a more premium positioning to avoid compete with ultra-fast fashion players like SHEIN, Temu, and Primark. Zara is refining its image through minimalist store designs, limited-edition collections, and the use of higher-quality materials. This strategy not only elevates the brand’s fashion appeal but also helps maintain affordability while distinguishing Zara in a crowded market. Zara’s growing digital presence further solidifies its premium positioning. It is the third most-followed brand on Instagram with 62 million followers, trailing only Nike and Victoria’s Secret, and second on TikTok with 11 million followers, just behind Louis Vuitton. This strong social media presence amplifies its global appeal and allows it to connect with a fashion-forward audience. 🔥 Inditex Open Platform (IOP) #Inditex has invested billions in developing the Inditex Open Platform (IOP), a cornerstone of its operational efficiency and customer experience. IOP is an integrated digital platform that connects inventory, logistics, and sales across both online and physical stores in real-time, streamlining operations across all Inditex brands. This platform allows Inditex to optimize stock management, reduce delivery times, and offer services like store-to-door shipping and seamless returns. By integrating advanced data analytics, IOP enhances decision-making, efficiency, and overall customer satisfaction, contributing significantly to Inditex’s continued success. 🏁 Nearshoring Sourcing Strategy Inditex’s nearshoring strategy has been instrumental in its ability to respond quickly to market trends. The company sources over 50% of its production from regions close to its headquarters in Spain, such as Portugal, Morocco, and Turkey. This proximity to key markets allows Inditex to produce goods more quickly and replenish stock based on real-time demand, reducing lead times and increasing flexibility. By nearshoring, Inditex can react swiftly to changing consumer preferences and avoid the long lead times associated with far-shore sourcing in regions like Asia. This strategy, combined with its agile supply chain, helps Inditex maintain a competitive edge in the fast-paced fashion industry. #brandimage #valueproposition #retailtech #supplychain

Zara owner Inditex has reported a 7.2% year-on-year increase in revenue to €18.1bn (£15.3bn) for the period 1 February to 31 July 2024, as a result of strong spring/summer 24 sales. "Our fully integrated model continues to generate opportunities for profitable growth across all concepts, regions and channels." Click below to read more. #zara #inditex #sales #retailnews #fashionnews

Retail Scoop #3 This week's Retail Scoop is about Inditex one of the world's largest fashion retailers, with a portfolio of 7 brands and over 5,500 stores globally. As of the latest fiscal year, the company reported revenues exceeding €35 billion. Zara, the flagship brand, contributed €26.05 billion, accounting for 72.5% of the company's total revenue. Inditex's success is not merely in its revenue figures but also in its ability to maintain operational efficiency across its extensive global network. It has consistently demonstrated exceptional operational efficiency year on year. In the year ending 2023, Inditex achieved a remarkable Return on Capital Employed (ROCE) of 39%, while H&M, its closest rival, achieved a ROCE of 12%. But what does this mean, and why is it important? ROCE measures a company's ability to generate profits from the capital invested in its business. In simple terms, it shows how efficiently a company uses its resources to generate earnings. Another important performance indicator is stock turnover. Inditex is widely regarded as the gold standard in retail operations. With a stock turnover of 4.93 in the last financial year, the Inditex group sells and replaces its inventory approximately 5 times a year, minimizing waste and excess inventory. For comparison, H&M had a stock turnover of 3.08 in the last fiscal year. And for History Buffs: Inditex traces its roots back to 1963 when Amancio Ortega founded the company known as Confecciones Goa in Spain. The pivotal moment came in 1975 with the launch of the Zara brand, which revolutionized the industry by offering trendy clothing at affordable prices with rapid turnover of inventory. Over the years, Inditex expanded its portfolio with the addition of Massimo Dutti, Oysho, Bershka, Stradivarius, Pull&Bear, Uterqüe, and Zara Home. ZARA SA PULL&BEAR Bershka Please follow for more retail scoops. #fashion #retail #analysis

H1 2024 results. Following my previous post, you can see two main success factors. 1) Sales Contribution. There is low exposure to Asia, Consolidation In Europe (gaining market share), and growth in the Americas (key future market) 2) Gross Margin has been constantly growing in the last two years. Soon, it will be at 62% Results: This will increase EBITDA and gross profit, which will soon give the shares a Target price of $60. The downsize? The rest of European retailers are not delivering such strong financial results, and polarisation will continue. The gap will be bigger than its shares might erode. Inditex is a fashion-driven product company, but all its commercial strategies deliver financial performance. These dynamics and business models can be applied to any segment, #HightStreet, #Premium #Luxury. Inditex Zara H&M Group H&M MANGO Primark #fashion #retail #ecommerce #marketplace

Our CEO, Richard Lim was on CNBC discussing Inditex’s strong H1 results. Inditex (Zara, PULL&BEAR, Massimo Dutti, Bershka, Stradivarius, Oysho): Their first half sales rose by 7.2%, to reach €18.1 billion (constant currency +10.2%) showing great performance across both physical stores and online channels. Gross profit increased 7.5% to €10.5 billion. Inditex is going strong at the moment. They have had new store openings with an improved omnichannel proposition driving growth and profitability. It operates in 214 markets, including Europe, the Americas, and Asia (even Kazakhstan). In the last FY, sales topped €35 billion. Growth in operating expenses (H1 +6.8%) remained below the pace of sales growth allowing them to expand profitability even with new store expansions and inflationary pressures. Inditex has a healthy net cash position, growing by 3.5% to €10.9 billion, providing a solid foundation for future developments. Stats & Facts 💠 Inditex operates in 214 markets across 5,667 stores 💠 The business plans to allocate €900 million (24/25) to increase logistics capacities. 💠 In July Inditex announced an equity investment in GALY, a US startup that has developed innovative technology for growing cotton in a lab from cotton stem cells. 💠 In August 2024, Inditex launched their second CIRC X Zara collection, designed by Zara Studio and made from textile waste. 💠 The Zara Pre-Owned platform, currently available in 16 European markets, will reach the US by the end of October 2024. 💠 Brands include Zara, Zara Home, Pull&Bear, Massimo Dutti, Bershka, Stradivarious and Oysho. Sign up below for more insight ⬇️ https://lnkd.in/d-z25aM #Inditex #Zara #RetailEconomics

Sales at ZARA SA parent Inditex jumped by 10.4% to €35.9 billion in FY2023 and the Spanish fashion giant has announced it intends to invest around €1.8 billion in 2024 to fuel further growth. The group said 2023 had been "very robust" across both stores and online and its collections had been "very well received". Sales in all geographical regions were up and when recorded in constant currency, sales overall were up 14.1%. Store sales were up 7.9% during the period while online sales were up 16% to €9.1 billion. The vast planned Capex for the coming year will be ploughed into technology to support its online sales in particular and into logistics. A two-year "extraordinary investment programme" will be focused on the expansion of the business and Inditex has allocated €900 million per year to increase logistics capacities in each of the 2024 and 2025 financial years.

Coincidence? Inditex earlier announced plans to develop its brand Lefties to counter SHEIN's dominance in the ultra-fast fashion segment... 💡And now, Fast Retailing plans to expand its Gen Z focus #GU brand in the United States and Europe (one store already opened in New York-soho). The concept offers clothing for women, men, children and babies with a clear focus on price (tees/tops around €7-10, pants for less than €20 for adults and many products for less than €10 for children..) 🎯From a strategic point of view and to achieve its objective of more than 60 billion euros in annual turnover, #FastRetailing must find an alternative to Uniqlo, despite its success and impressive turnover growth the past years (14.5 billion euros last year) this won’t be enough. GU currently makes €1.8 billion primarily in Japan, so it clearly seems like the upside is here in terms of growth potential internationally 📈As a reminder, #Inditex brands portfolio..is pretty unique with 3 brands over €2B besides Zara! Net sales by brand for 2022: Zara (including Zara Home): €23.76 billion Pull&Bear: €2.15 billion Massimo Dutti: €1.6 billion Bershka: €2.4 billion Stradivarius: €2.05 billion Oysho: €623 million #fastfashion #marketshare

Inditex, the fashion group behind Zara and other major brands, continues to thrive. -> Despite a slower sales growth of 7% to €8.2 billion in Q1, net profit still rose 11% to €1.3 billion. -> This solid performance comes as customers respond positively to their new collections, driving a 12% sales increase from May to early June. Inditex is broadening its presence, opening stores in 28 new markets, including its first Zara in Uzbekistan, and reopening in Ukraine. Online, Massimo Dutti debuted on JD. com in China, with live shopping coming to Europe and the U.S. Investing in the Future To support its growth, Inditex will invest €900 million annually over the next two years to enhance logistics. Operating in 214 markets, the company is well-positioned for further expansion in the fragmented fashion retail sector. #Inditex #Fashion #GlobalGrowth**