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Zara-owner Inditex translates fast-fashion into big profits

The Spanish company Inditex, which owns Zara among other chain stores, has just unveiled an impressive set of figures: a 22 percent jump in profits.

Shoppers around the world may have tightened their belts, but the world’s biggest clothing retailer is doing the opposite -- it is expanding fast. The Spanish company Inditex, which owns Zara among other chain stores, has just unveiled an impressive set of figures: a 22 percent jump in profits.  

Large does not necessarily mean unwieldy, and Inditext is the proof. The world’s biggest clothing retailer is also one of the  nimblest; it invented fast fashion. By manufacturing more than 50 percent of its products itself the Inditex chains can respond quickly to changing tastes.

“There’s something new in the stores almost every couple of weeks which gives shoppers a reason to go back to those stores every couple of weeks," says Rahul Sharma, a retail analyst with Neev Capital. "This makes it a very exciting place to shop; brings people in.”

In spite of the recession in Europe and economic malaise elsewhere, the model seems to be working everywhere from China to Russia to the U.S. Inditex now has 6,000 stores in 86 countries -- a rare success story for Spain. The company’s founder, Amancio Ortega , has just leapfrogged Warren Buffet as the world’s third richest man. 

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.
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