The multibillionaire has banked £1.1bn from Inditex after the retail chain reported another bumper year of sales and profits in 2016. It seems like it would be pretty good to have stock in Zara right about now.
At age 80, Amancio Ortega, is considered the richest man in Europe and the biggest share-holder of Inditex, a Galician company started by the billionaire four decades ago. Ortega opened the first Zara store in A Coruña, 1975. Originally a delivery boy for a local clothing manufacturer, he would later go on to build the most successful and largest global retailer company. Owning 60% of of Inditex, Ortega has opened at least 51 new Zara stores, which brings over 2200 stores world wide. Based in the city, La Coruña, Inditex current employs 162 459 people and has since created 9600 careers last year. According to Inditex, Ortega will receive the payout as dividend payments after Zara revealed its successful financial results and pay shareholders a dividend of €0.68 per share, up 13.3% year on year.
Chair and chief executive of Inditex, Pablo Isla regards the reassuring sales “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.”
Inditex has reported a 10% jump in same store sales in 2016. This was only after it invested €1.4bn in its warehouses, new stores and online stores. Net profits also rose 10%, to €1.4bn and total sales increased to €23.3bn. Since then, sales grew across all markets including the UK.
There is little surprise with Zara’s recent success. With 10% increase of sales, Zara has transcended fashion forward mid range shops and gained popularity over stores like H&M and Mango. With its effortless knack for appropriating high end designer styles on the catwalk and mimicking youthful trends, Zara has become a status brand. For fashionistas, Zara is no longer just a high end street supplier for clothes, gaining fans such as The Duchess of Cambridge and Olivia Palermo. As a fashion brand, Zara relies on trial and error and manages to cater all trends. Stores can hold items similar to Johanna Ortiz but sell for 5% of the designer price. They spend next to nothing on advertising. To top it all off, Zara is considered to have the most efficient retail service, including online customer enquiries and communication with head designers.
Inditex has noted several other highlights for Zara last year. This included the rollout of range marking the release of the Rolling Stones’ new album, the company’s participation in Life collection, the launch of its first perfume for men and women and its announcement to use sustainable fabrics in their new collections. The Zara group has also circulated plans to hand employees more than €35m by the end of 2017.
Inditex also declared with confidence, Zara’s new gender-neutral collection will produce just as successful sale results this March. Zara changes stock each week. Better hurry up shoppers or you’ll miss this exciting range too!
