Inditex sees weakest profitability in a decade and slowdown in sales
Geneva — Inditex, the world’s largest clothing retailer, reported a slowdown in sales and its weakest profitability in a decade, showing that the owner of the Zara chain isn’t immune to the troubles afflicting rivals such as H&M. The company’s gross margin narrowed to 56.3% in the year to end-January amid adverse currency effects, and as like-for-like revenue rose at the slowest pace in three years, Spain-based Inditex said on Wednesday in a statement. The stock fell as much as 3.1% in early trading in Madrid. Inditex’s profitability is vulnerable to erosion from a strong European currency as the bulk of its costs are in euros and most of its revenue comes from countries outside the single currency area. The retailer has also been spending more on remodeling stores and expanding its online business to head off competition from Amazon.com. Poor weather conditions in Europe also weighed on demand. "The colder weather compared to last year across Europe had a negative impact," said Ann...
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