The owner of the famous brand plans larger stores and an aggressive online expansion.So what do you do when you’ve knocked it out of the park to post record breaking sales? If you’re Zara, the flagship brand of Inditex Group, you set your sights on growing even larger. As Marketwatch shares, that translates into bigger stores and an aggressive online expansion.
The red-hot retailer has just opened up a 54,000-square-foot flagship store in La Coruna, Spain, and that store will serve as a model for other flagships that are in the works around the world. That comes off of the strength of the retailer breaking internal sales records at $24.76 billion, while net profit rose 10 percent, and same-store sales also rose by an impressive 10 percent.
Inditex Chairman and Chief Executive Pablo Isla touted the results and the company’s plans in a press conference this week, noting that the business is working towards "full integration of the brick-and-mortar stores and online businesses, with store openings that are increasingly more relevant."
The Zara brand is noted for being a master in the world of fast fashion. That’s partial because it owns its factories and controls the majority of its supply chain.
"Key investments continue to be made with the medium- and long-term horizon in mind, framed by the ambition of making the company ever more sustainable from the financial, social and environmental perspective,” Isla added.
Analysts have been showering Zara with praise, as it’s pretty clear the brand is resonating with today’s consumers. “Inditex has a lot of room to grow with plans for more flagships and online expansion. It's a bright spot in retail today, if not the brightest,” wrote Laura Heller of Forbes.
"Inditex is the best-in-class omni-channel retailer, complementing its flagship stores with a highly convenient e-commerce proposition," according to analysts from Berenberg.
"Inditex is sitting on a very large cash pile and this looks set to increase over the years to come," says Societe Generale analyst Anne Critchlow.
In today’s challenging retail environment, Zara’s provides a fascinating case study on how a brand can catch fire while also making all the right moves behind the scenes. We’ve seen plenty of retailers capture lightning in a bottle for a short period, but we’ll have to wait and see if Zara’s secret sauce is one that will last through multiple sales cycles.
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17 MARCH 2017, Spain