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Technology and tracking help boost Zara owner’s sales by 7.5%

Edmund Heaphy
Finance and news reporter
A Zara store on London's Oxford Street. Photo: John Keeble/Getty Images

Sales at Zara owner Inditex (ITX.MC) jumped 7.5% in the nine months to the end of October, with the clothing juggernaut boosted by the introduction of tracking technology in stores and strong online sales performance.

The Spanish retailer, which also owns Massimo Dutti and Bershka, said that sales rose to €19.8bn (£16.7bn) in the period.

The company pointed to crucial “strategic investments” in technology, as well as in sustainability, for the gains.

All of the group’s brands now operate online stories, and Inditex launched integrated online sales platforms for Zara, Zara Home, and Massimo Dutti in several new countries during the period.

Net profit increased by 12% compared to the same period last year to €2.72bn (£2.3bn), and the company’s cash pile is now a record €7.7bn, which is a 17% increase on last year.

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The company also said it would maintain growth of between 6% and 8% for its full financial year.

Richard Chamberlain, an analyst at RBC Europe, pointed to Inditex’s introduction of RFID tracking technology, which allows retailers to track stock and inventory in stores, as something that is boosting sales at the company.

Zara is a leader in the deployment of the tracking technology, which has now been deployed in all of its stores. Fast fashion competitors like H&M, which is dealing with a raft of unsold items, have been attempting to catch up in recent months.

Gross margin at Zara increased to 58.2% of sales, something Inditex called “especially remarkable”.

Inditex executive chairman Pablo Isla said on Wednesday that these figures confirm the strategy of the company, pointing to “the excellent performance of the entire Inditex team, whose commitment is enabling the delivery of continued sustained growth in our integrated stores and online model”.

Isla said the growth was “underpinned by a significant investment in technology and focus on leading and embracing the best sustainability practices”.

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