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Zara founder to receive £1.1bn payout after record sales Zara founder to receive £1.1bn payout after record sales
(about 2 hours later)
Amancio Ortega, the founder and biggest shareholder of Spain’s Inditex, owner of the Zara fashion chain, will receive a bumper payout of €1.26bn (£1.1bn) in dividends after the company revealed record sales.Amancio Ortega, the founder and biggest shareholder of Spain’s Inditex, owner of the Zara fashion chain, will receive a bumper payout of €1.26bn (£1.1bn) in dividends after the company revealed record sales.
Inditex, the world’s largest clothing retailer, said it would pay shareholders a dividend €0.68 per share, up 13.3% year on year, taking the total earned by Ortega to more than €6bn since 2010.Inditex, the world’s largest clothing retailer, said it would pay shareholders a dividend €0.68 per share, up 13.3% year on year, taking the total earned by Ortega to more than €6bn since 2010.
Oretega, 80, owns almost 60% of Inditex through two companies, Pontegadea Inversiones and Partler.Oretega, 80, owns almost 60% of Inditex through two companies, Pontegadea Inversiones and Partler.
He is the world’s fourth richest person and the wealthiest in Europe, according to the Forbes World’s Billionaires rankings, with net worth of $71.5bn (£58bn), after Bill Gates ($86.bn), Warren Buffett ($78.3bn) and Jeff Bezos ($73.4bn).He is the world’s fourth richest person and the wealthiest in Europe, according to the Forbes World’s Billionaires rankings, with net worth of $71.5bn (£58bn), after Bill Gates ($86.bn), Warren Buffett ($78.3bn) and Jeff Bezos ($73.4bn).
Inditex reported a 10% jump in same-store sales in 2016, after it invested €1.4bn in its warehouses, technology, new stores and online expansion. Sales grew across in all markets, including the UK.Inditex reported a 10% jump in same-store sales in 2016, after it invested €1.4bn in its warehouses, technology, new stores and online expansion. Sales grew across in all markets, including the UK.
Net profit also rose 10%, to €3.2bn, while total sales rose to €23.3bn.Net profit also rose 10%, to €3.2bn, while total sales rose to €23.3bn.
Pablo Isla, chairman and chief executive of Inditex, said: “These are a positive set of results against a backdrop of strong prior-year performance. This is a direct result of the commitment, spirit and ambition of all the professionals comprising the group, their dedication to the company, passion for fashion and focus on sustainability.”Pablo Isla, chairman and chief executive of Inditex, said: “These are a positive set of results against a backdrop of strong prior-year performance. This is a direct result of the commitment, spirit and ambition of all the professionals comprising the group, their dedication to the company, passion for fashion and focus on sustainability.”
The company, which also includes the Massimo Dutti and Pull & Bear brands, opened 279 stores last year in 56 markets, taking its total number to almost 7,300. There were 51 new Zara stores, bringing the worldwide total to more than 2,200.The company, which also includes the Massimo Dutti and Pull & Bear brands, opened 279 stores last year in 56 markets, taking its total number to almost 7,300. There were 51 new Zara stores, bringing the worldwide total to more than 2,200.
Inditex employs 162,450 people after creating about 9,600 jobs in 2016, 2,480 of which were in Spain. It has invested heavily in its warehouses in its home country, to allow clothing to be packed and dispatched at a faster rate.Inditex employs 162,450 people after creating about 9,600 jobs in 2016, 2,480 of which were in Spain. It has invested heavily in its warehouses in its home country, to allow clothing to be packed and dispatched at a faster rate.
The company said highlights in 2016 included the roll-out of a Zara range designed to mark the release of the Rolling Stones’ new album, Blue & Lonesome, and the Join Life collection, made with sustainable fabrics.The company said highlights in 2016 included the roll-out of a Zara range designed to mark the release of the Rolling Stones’ new album, Blue & Lonesome, and the Join Life collection, made with sustainable fabrics.
Zara Home launched its first perfume for men and women, as well as its first washing powder, fabric conditioner and ironing range.Zara Home launched its first perfume for men and women, as well as its first washing powder, fabric conditioner and ironing range.
Zara’s fast fashion is speedy route to big profits
Today’s news that Zara has had record sales over the past year will surprise no one in the fashion industry who’s looked inside a store in the past 12 months.
Like Celine or Johanna Ortiz but can’t afford them? Zara had the same looks at just 5% of the designer price. Yet despite spending nothing on advertising, the 10% increase in sales suggests Zara has now transcended the likes of fashion-forward, mid-range shops such as Mango and H&M. It is now a status brand rather than just an affordable high street shop, with fans including Kate Middleton and street style star Olivia Palermo as well as you and me.
Long known for its knack for borrowing from the catwalk and repurposing for the high street in a more wearable way, Zara’s success also relies on trial and error. Shop assistants report back customer reactions, from complaints about lack of stock to style details – like whether a top would look better with a boat neck – to their managers, who then provide feedback to designers. Their extraordinarily high turnover of stock (which is kept to a minimum, helpful for maximising profit) means that customers know they need to buy immediately or items will sell out – the ranges change week to week.
While the mark of a good high street store is to efficiently reflect what’s on the catwalk, Zara tends to mimic the more “youthful” trends. The wacky athleisure looks towards Vetements. The sculptured shirts (there are tens of styles) resemble Rosie Assoulin. While most high street stores produce one “it” item – like M&S’s pink coat from 2013 – Zara produces many, such as last year’s wide legged tracksuit trousers or last month’s green print dress designed in the spirit of Baum und Pferdgarten’s long sold-out version. The new gender-neutral line, just launched, will likely take up the baton for March. But with stock changing each week, blink and you’ll miss this one too.