Inditex of Spain, the owner of the luxury fashion brand Zara, posted a profit of Rs 148.76 crore and an income of Rs 1,815 crore for the financial year ended March 31, 2022, according to the latest annual report by Trent Ltd.
In FY21, Inditex Trent Retail India Private Ltd (ITRIPL), JV based in Zara stores in India, reported a loss of Rs 41 crore and revenue decreased by 28.3 percent to Rs 1,126 crore in the affected epidemic year.
The Spanish team Inditex owns 51 percent and Trent has 49 percent in the ITRIPL. “During the year under review, Zara’s company recorded a revenue of Rs 1,815 crore,” said Tata’s shopping group Trent.
Zara is currently operating in 21 stores in 11 cities. We have not seen an increase in the number of shops in the last two years.
“Zara’s growing retail opening continues to be measured by focusing on the presence only in high-end retail stores,” he said.
Inditex Trent, its joint venture with Tata which owns 21 Zara stores in India, revenue has grown to Rs1815 crore in the past, according to Trent’s annual report.
Last year, it lost a total of Rs 41 crore in total sales of Rs 1,126 crore. “Zara’s growing retail opening continues to be measured by focusing on the presence only in high-end retail stores,” the annual report said.
Zara competes with the popularity of other foreign brands such as H&M, and UNIQLO in India. The Spanish group Inditex has another similar relationship with Trent, which operates in Massimo Dutti stores in India. It also reported revenue growth of 43.9 percent during FY22.
“Massimo Dutti’s business operates in 3 stores and records revenue of up to Rs 59 crore on FY22,” he said. Massimo Dutti India Pvt Ltd reported a profit of Rs 1.48 crore on FY22.
The business of both organizations is actually limited to the distribution of Zara and Massimo Dutti products in India.
Both businesses are required to obtain only sales from Inditex Group. “Also, product selection and related specifications are at a later stage.
In addition, businesses rely on the Inditex group to obtain permits to use these products in India depending on the terms and specifications,” Trent said.
Facing increasing competition from global rivals
Zara also faced increasing competition from global competitors in the increasingly tight clothing market. The Spanish brand recently opened two stores five years ago.
With a profit of up to Rs 2,044 crore during the FY21 that ended in December, German sportswear manufacturer Puma is the largest brand in the country along with increasing awareness of fitness and the growing demand for ‘athletic’ clothing in the country.
Zara has been a successful run since arriving in the country a decade ago. At a combined level, Trent also operates Trent Hypermarket, a joint venture between Dad and British retailer Tesco, to run 61 Star hyper and supermarkets.
A seller competing with Reliance Fresh and D’Mart, posted a total sale of Rs 1,338 crore, an increase of 11%, although the loss was extended to Rs 135 crore.
Zara owner Inditex is set to benefit from higher prices
Owner of fashion giant Zara Inditex (ITX.MC) is expected to report higher earnings in the first quarter next week, benefiting from higher prices than competitors without hurting its sales, analysts said.
As the cost of living problems skyrocketed across the region, European retailers are facing the deceptive practice of balancing the rising cost of supply chain with consumers and ensuring that their products remain affordable.
Zara has increased its initial prices by 10% or more from last year on a monthly basis since January, according to a UBS study.
In April, its initial prices rose by 18.5%, data showed. The study monitors prices on Zara websites across all 12 major markets.
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