Zara stays strong in Australia despite profits slowdown

By

Sandra Halliday

Published
May 24, 2017

While some chains struggle in the Australian market, Inditex’s Zara is committed to the country and is seeing its operations growing although profit has fallen, according to local press reports.

On Wednesday, the same day that rival Topshop’s local franchisee announced a voluntary administration filing, The Age reported that the Spanish chain by contrast has enjoyed another year of double-digit growth in the country.

It saw A$256.36m in sales in the year to January 31 2017, boosted by the opening of three new stores in the Sydney suburb of Parramatta, the Gold Coast and Brisbane. That figure was up 15.5% year-on-year, although this was slower than the 24% rise seen in the previous year. And its profit was slower too with the company making A$10.3m compared to $15.26m in the prior year.

Like Topshop, Zara arrived in Australia in 2011 and had 18 stores by the end of January this year. It had 1,700 employees, several hundred more than it had working for it in Australia a year earlier.

The local operation is 90% owned by Inditex and 10% by Peter Lew through his International Brand Management unit. Lew is the son of retail entrepreneur Solomon Lew.