Inditex stitches up huge earnings win

Spain's Inditex fashion group have announced its net earnings were up a 22 percent in the 12 months to the end of January but the stockmarket was not impressed with shares in the textile behemoth falling 4 percent.

Inditex stitches up huge earnings win
A model wearing a dress by Spanish designer Francis Montesinos at the Inditex-sponsored 2012 Madrid Fashion Week. Photo: Dominique Faget/AFP

The clothing giant headed up by Amancio Ortega, Spain's richest man, chalked up the result in the middle of a crisis that has left Spain with an unemployment level of 26 percent.

Net income for the firm which owns the high street retail chains Zara, Massimo Dutti and Bershka among others was €2.3 billion, said Inditex in a press release.

The stock market responded negatively to the story, with Inditex shares falling 4 percent, El Mundo reported on Wednesday morning.

Markets had been hoping for earnings increases of 30 percent, the paper said.

Spain accounted for 21 percent of its sales, down from 25 percent in the previous 12-month period.

The company also stated it had created 10,802 jobs in the last 12 months so that its workforce totalled 120,314 employees.

The country-by-country breakdown of new jobs created will be available in July, an Inditex press officer told The Local.  

Inditex can now boast of 6,009 stores with shops opening in 64 countries last year.

Zara also launched its online store in China in 2012.

The board of directors at Index plans to divvy up the year's spoils to the tune of €2.20 a year.

Forbes magazine recently reported Inditex chief Amancio Ortega was the third richest man in the world.

Ortega, a railwayman's son from Galicia, has wealth now estimated at  €44 billion ($57 billion). This has rocketed from €28.7 billion a year ago, according to Forbes.

Only the Mexican magnate Carlos Slim and US tech titan Bill Gates rank above him on the magazine's list.

Ortega left school at 13 to work as a salesman in a shirt store in the city of La Coruña. Four years later, he set up his own business, initially handling wholesale transactions.

He opened his first Zara boutique in 1975, in La Coruña. More branches followed, and he expanded into Portugal in 1988, the United States in 1989 and France in 1990. 

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Zara founder Amancio Ortega enters renewable energy sector

Spanish billionaire Amancio Ortega, founder of the biggest fast fashion group in the world, has entered the renewable energy sector with the purchase of a stake in a wind farm run by energy giant Repsol.

Amancio Ortega
Amancio Ortega is the founder of Inditex, which includes flagship store Zara, Zara Home, Massimo Dutti, Bershka, Oysho, Pull&Bear, Stradivarius, Uterqüe and Lefties. Photo: Miguel Riopa

Ortega’s investment holding Pontegadea will pay €245 million euros ($281 million) for a 49 percent stake in the Delta wind farm in the northern province of Zaragoza, Repsol said in a statement Thursday.

Opened in March, the wind farm will produce 992 gigawatt hours (GWh) of 100 percent renewable energy a year, the equivalent to the average annual consumption of 300,000 households, the Spanish firm added.

Pontegadea chief executive Roberto Cibeira said the deal “strengthens the environmental commitment that accompanies all the activities in our portfolio”.

Ortega’s investment holding in 2019 bought a five percent stake in Spanish gas grid operator Enagas, and it owns a five percent stake in Spanish electricity grid operator Red Electrica.

This is Pontegadea’s first operation in the renewables sector.

Demand for renewable energy assets has soared in recent years, with investors spending billions of dollars to gain exposure to the sector as governments promote low-carbon energy and crack down on fossil fuels to fight global warming.

Ortega’s Pontegadea owns a 59.3 percent stake in Zara owner Inditex, as well as investments worth billions of euros in prime office and shopping districts.

These are largely debt-free purchases using dividend payouts from Inditex.

Pontegadea’s global real estate empire includes offices used by Facebook and Amazon in Seattle and large swathes of London’s Oxford Street.

Amancio Ortega is the founder of Inditex, the biggest fashion group in the world, which includes flagship store Zara, Zara Home, Massimo Dutti, Bershka, Oysho, Pull&Bear, Stradivarius, Uterqüe and Lefties.

Now 85, he became a billionaire and Spain’s richest man at 65 when Inditex was listed in 2001. Funds from the flotation were used to set up Pontegadea, which is structured as a private limited company.