The Galician giant grows at home. In a quarter that has once again been a record, sales in Europe are the ones that have gained the most pesos and, together with Spain, it represents the worst of its sales, almost two thirds, reaching 62.2%. Of course, Spain alone has 14.4% of the business in the first half of the year, while in the rest of Europe it is the bulk of the company, with 47.8%.
In addition to being the largest market, it is the one that has grown the most in relative terms. Last year, Inditex’s business was at 47.5% in Europe, so it has added three tenths more in just six months. For its part, Spain has remained flat, with 14.4% of sales. In total, sales on the continent as a whole represent 62.2%, compared to the 61.9% they represented in fiscal year 2022.
If compared to the photo from a year ago, Europe has increased its weight by 1.5 percentage points, while Spain has gained weight by 0.2 percentage points. In fact, some of the company’s most notable projects are located on European soil: the expansion of Bershka’s flagship in Galleria Vittorio Emanuele, in Milan; The move of Stradivarius to Paseo de Gracia, in Barcelona, where it has opened its largest store in the world, and the opening in Rotterdam of Zara’s largest store in the world, which takes the title from Madrid.
In terms of number of stores, Europe (without Spain) is the region with the most company establishments. At the end of the 2022 financial year, Inditex had 2,634 stores, while in Spain there were 1,225 stores, which represents 66.4% of its network of 5,815 stores around the world. The first of this entire network of establishments in Europe was opened in Porto in 1988. Two years later, the Galician giant, which was taking its first steps abroad, opened a Zara store in Place l’Opéra in Paris. As of today, France and Portugal have 268 stores and 293 stores, respectively.
Another of the large European markets for the company is Italy. Inditex has 335 stores in the transalpine country, positioning itself as the European market beyond Spain with the largest number of establishments. To land in Italy, the Galician giant allied itself with Percassi through a joint venture that opened its first store in Milan and lasted for five years, until the group took over its entire business in the country. A similar strategy followed Inditex in Germany, the other large European economy.
To land in the German market, Inditex created a ‘joint venture’ with Otto Group in 1999, of which each partner controlled 50%. The Galician company gradually took over the entire business until, in 2010, it bought the remaining 22% from its partner and took over 100% of the capital of its German subsidiary. Currently, Inditex has 115 stores in Germany. It has a larger fleet of stores in Poland, where its establishments reach 222. In the United Kingdom, the company has 105 stores.
The weight of sales in Asia and the rest of the world has also grown in the last six months. Last year, sales on the Asian continent accounted for 18.1% of Inditex’s business, while in the last six months it accounted for 18.4%. Where the company’s sales have lost weight in the global calculation has been in America, since they accounted for 19.4% of the business during the first six months of the year, six tenths less than in 2022. Despite the reduction, Inditex has highlighted in the results that America continues to be its second largest market, a position that the country has held since the group’s departure from Russia after the outbreak of war in Ukraine in February 2022. In the Russian market, Inditex had up to 5 02 stores and accounted for 8.5% of its ebit at the time of its activity stoppage.
Inditex seeks to make a strong presence in the United States
In the United States, the company has a plan to make thirty openings and expansions in the US market in the next three years. In America as a whole, the company had 750 stores at the end of last year, 12.9% of the total, while in the rest of the world there were 1,197 company stores, the remaining 20.6%. Much of its weight in America is due to its capillarity in the Mexican market, where it has 383 stores.
The slimming of the group’s American business in percentage of the total comes while it hopes to make openings in cities such as New York, Los Angeles, Miami, Chicago, Boston, Dallas, Austin and Las Vegas) in the period 2023-2025, in addition to thirteen renovations . or expansions of existing stores in the country. Having its largest international market in the United States has helped the company to partially offset the currency effect, boosted by the strength of the dollar, which makes Inditex’s purchases more expensive, mainly in Asia.
Despite being weighed down by currencies, the company has already had ten consecutive quarters of double-digit growth, after increasing its sales by 14% between May and July. The group had a turnover of 9,240 million euros in the second quarter, a maximum for the period and the second historical record, only surpassed by the fourth quarter of 2022. In the first half of 2022 as a whole, Inditex has recorded a turnover of 16,851 million euros. with a growth of 13.5%. Net profit catapulted 40.1%, to 2,513 million euros.
