- Sales at Zara reflect an excellent 2022 and better expectations for 2023.
- The profits of the company founded by Amancio Ortega also grew last year.
- The cause: the post-pandemic rebound in consumer fashion spending.
Inditex, the holding company that owns the Zara stores, confirmed what was expected: sales in 2022 were excellent, making the company forget about the covid pandemic.
In addition, in the first weeks of its fiscal year 2023, the turnover also remains at the highest levels.
Indeed, according to the Inditex financial report that was published this Wednesday, March 15, profit soared 27 percent in the 2022 fiscal year that ended Jan. 31 as sales surpassed pre-pandemic levels.
2022 was the first full year with Marta Ortega, daughter of Amancio, as executive director of Inditex. The founder is now president of the company and is more dedicated to the real estate business in Spain, the United States and the United Kingdom.
Zara and the secret of her success
According to Inditex’s financial report, sales in the physical stores and online channels of the largest fashion representative grew by 18 percent compared to 2021 and 15 percent compared to 2019, the year before the pandemic.
In the 12 months of 2022, Inditex sold 32,610 million euros (about 35,000 million dollars).
As we explained before, the pace of sales continued to be frantic in the first weeks of the current year. As the company said, Between February 1 and March 13, sales rose 13.5 percent compared to the same weeks in 2022.
Without taking into account Russia, where Inditex closed its points of sale since the conflict with Ukraine began, sales in the same period increased by 17.5 percent in constant currency.
On the other hand, Inditex announced an increase in the volume of investment (some 1,600 million euros this year), a value higher than expected by analysts.
Among other outlays, Zara plans to invest heavily in technology. One of them has to do with removing alarms from stores and replacing them with new security technology.
In addition, it plans to bet on increasing the productivity of its stores: it will not seek to have more points of sale, but rather that each one sell more.
Breaking down by brand, Zara led with 38.6 percent growth in earnings in 2022 relative to 2021.
The other brands earned less: Oysho resigned profits by 12 percent and Massimo Dutti, 10 percent less.
In 2022, Zara will raise prices an average of 5 percent, according to analysts at DeutscheBank, UBS and Royal-Bank of Canada.
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