Inditex’s compelling product ranges cushion sales amidst growing macroeconomic uncertainty, says GlobalData – Retail Times
Following today’s release of Inditex’s figures for H1, FY2022/23; Darcey Jupp, Apparel Analyst at GlobalData, a leading data and analytics company, offers her view: “Inditex has once again proven itself to be an inimitable force in the global apparel market, with its group net sales up €2.9bn to €14.8bn in H1 FY2022/23 and 15.8% up versus pre-pandemic despite various macroeconomic challenges. The group’s clear focus on enhancing product ranges and customer experience is paying off, as it experienced a significant increase in store traffic during H1. Sales between 1 August and 11 September continued to be strong, up 11% in constant currency, with the comparative year 9% above pre-pandemic levels. However, with Europe accounting for around 60% of its sales, and energy prices in the region remaining at unprecedented levels, Inditex should brace for a downturn in demand in Q4 with a bleak winter ahead.
“Among Inditex’s brands, Zara continues to be the runaway success. Its net sales were up 28.7% year-on-year in H1 FY2022/23 – an impressive 22.8% versus pre-pandemic comparatives. Its diverse product range resonates with a wider audience compared to rivals like H&M and ASOS, allowing Zara to target a broader demographic. Zara also continues to experiment with more collaborations, which have allowed it to explore new sectors which it has previously had little exposure to, such as its ‘Zara Outdoor’ collection of cycling and hiking gear launched in May 2022, created in partnership with Spanish sports specialist Tenaya.
While it did not provide figures for online performance, Inditex has reported that the channel returned to growth in Q2 after a 6% decline in Q1 against high lockdown comparatives. The charge on postal returns for Zara in the UK does not seem to have been expanded yet, which is wise considering 82.6% of existing Zara shoppers in GlobalData’s UK monthly survey in June said the fee would make them reconsider shopping for Zara online.
“During the first half of the year, Inditex has furthered its push to become a more sustainable company, and it believes it is currently on track to meet its targets set for 2022, 2023 and 2025. Recently, it partnered with CIRC, a start-up that is creating new technology to better recycle cotton and polyester and convert them into more sustainable textiles such as viscose and lyocell. Incorporating more of these materials in its ranges will help attract the growing number of consumers looking to purchase more sustainable apparel, but it must ensure that usage is widespread and not through a standalone eco collection to have significant effect. Introducing clothing recycling points in its stores would help Inditex benefit from this partnership further, as it could offer incentives like vouchers to encourage repeat spend, like rival H&M has already incorporated across its brands.”
Following today’s release of Inditex’s figures for H1, FY2022/23; Darcey Jupp, Apparel Analyst at GlobalData, a leading data and analytics company, offers her view: “Inditex has once again proven itself to be an inimitable force in the global apparel market, with its group net sales up €2.9bn to €14.8bn in H1 FY2022/23 and 15.8% up…
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