The owner of Zara, Inditex, registered a 24% increase in its net profit in the first nine months of its fiscal year on Wednesday thanks to higher sales that showed strength in a context of weakening global demand for clothing by of consumers.
Sales for the first nine months of the year in stores and online at the world’s largest fashion retailer rose 19% from a year ago, slightly faster than analysts expected, after raising prices by 5% or more since the boreal spring to anticipate inflationary pressures in several markets.
Its February-October net profit of the first year under founder-owner Amancio Ortega’s daughter Marta Ortega at the helm as non-executive chairwoman, reached 3.1 billion euros ($3.3 billion).
Inditex, a company known for its ability to quickly get the latest designs to consumers thanks to its agile sourcing system, has lately been offering more “haute couture” Zara pieces to motivate emotional buying for special events in a context of cost-of-living crisis that threatens non-essential spending, a company source said.
This approach allows Inditex to sell higher-priced pieces and attract buyers from the luxury segment of the market, according to company sources and analysts.
Inditex said that sales between the beginning of November and December 8 increased by 12% compared to a year ago, at a slower pace than in previous months as a result of the weakening of the consumer environment.