Zara owner Inditex posted a slowdown in sales growth just weeks before Christmas in another gloomy episode for retail.
It comes as recent sales data has sounded alarm bells that the UK High Street is struggling to entice consumers to part with cash.
The world’s largest fashion retailer said its sales in stores and online grew 11 per cent over the nine months to October 31, hitting £22billion.
The Spanish company managed to strike an upbeat note and dubbed these sales as ‘very satisfactory’.
But this was a much slower pace than the 19 per cent seen in the same period the year before.
Retail gloom: Zara owner Inditex said its sales in stores and online grew 11% over the nine months to October 31, hitting £22bn
And while sales were also up by 6.6 per cent to £7.6billion in the three month period to October 31, this was lower than comparable growth over the past two years.
But it wasn’t all doom and gloom as Inditex posted £3.53billionn in profits, which was an increase of 32.5 per cent compared with a year earlier.
And sales between November 1 and December 11 – a period which includes the Black Friday discount bonanza – increased by 14 per cent from the same period in 2022.
Amid the cost of living crisis, Zara has faced hot competition from fast fashion online retailer Shein, which offers dresses for as little as £5.
With fast-growing budget retailer Shein taking share at the cheaper end of the market, Zara has sought more discerning shoppers.
It comes as figures last week revealed that shoppers cut back on non-essential purchases in November to offset high food bills.
Despite brands running Black Friday deals throughout the month, November sales of homeware and other non-food products dropped 1.6 per cent, according to the British Retail Consortium.
Inditex, which also owns Pull & Bear, Bershka and Stradivarius, is closing some of its shops to invest in larger, prettier stores.
Pinning its hopes on these changes, Inditex said it expects its 2023 profit margin to rise 75 basis points.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: ‘Despite the current cost-of-living crisis, Inditex posted another solid set of numbers.’
Founded in 1975 by Spain’s richest man, Amancio Ortega, his daughter Marta Ortega Perez officially took over as chairman in April 2022.
Ortega has tried to distance Inditex from the label of a ‘fast-fashion’ firm.
But, as critics have pointed out, the term – which has been used to slam retailers for poor environmental and worker practices – comes from a 1989 interview in The New York Times with a Zara boss.
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