Velvet dress sales put Zara owner firmly in fashion

Zara store, Sylvia Park in Auckland, New Zealand Image copyright Getty Images
Image caption Zara has opened 227 stores this year including one in Auckland, New Zealand

Velvet dresses, military blazers and mini-skirts helped Inditex, the owner of chains including Zara and Massimo Dutti, post a strong rise in sales for the nine months to October.

The world's largest clothing retailer posted an 11% rise in net sales to €16.4bn compared with the same period last year.

Net profit was 9% higher at €2.2bn (£1.8bn).

Sales have also risen since November despite unseasonably warm weather.

The increase comes as rival fashion groups struggled with tough trading conditions in many markets.

Inditex, which also owns Bershka and Pull & Bear, said sales had risen both in store and online.

Zara accounts for two thirds of its sales.

The retailer also opened 227 new outlets and created 9,000 jobs - a fifth of which were in Spain, where unemployment remains about 20%.

It follows disappointing fourth-quarter results from chains including Abercrombie & Fitch and Gap, which are struggling to adapt to changing consumer tastes and habits.

Inditex, in contrast, has continued to grow by quickly reacting to changing trends and weather, said analysts. Its items are designed, made and shipped to stores often in less than a month, which boosts its profitability.

Image copyright Zara
Image caption Sales of velvet dresses helped push up revenue at Inditex

"Few other major clothing retailers can match the mid-teens [percentage] sales growth that Inditex has achieved in difficult global markets this year," analysts at Liberum said.

"The company's clear focus on achieving full-price sales underpins high and stable margins."

Macquarie analysts say Inditex has only a 2% share of a "highly fragmented" global market and they expect it to continue rising in emerging markets and the United States.

Inditex shares fell 2.6% to €32.11 in Madrid, but are flat for the year.

Meanwhile, shares in online fashion retailer Boohoo jumped 8% after it said it had bought rival fashion website Pretty Little Thing.

The firm will pay £3.3m for a 66% stake, with the remaining 34% being retained by management.

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