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Inditex 2011 Profit Rises On Strong Expansion

Inditex 2011 Profit Rises On Strong Expansion

Spanish textile company Industria de Diseno Textil or Inditex SA (IDEXF.PK) reported Wednesday a 12 percent increase in profit for the full year 2011 reflecting significant store expansion, particularly internationally.

During the year, Inditex opened 483 stores in 49 markets, bringing the total stores across its 82 markets to 5,527. Inditex's international expansion included 132 openings in China, 30 of which were Zara locations. In Europe, the company opened 233 new stores.

In 2012, the company plans to increase its total number of stores by between 480 and 520 new establishments.

Further, Inditex said its business concept Zara will begin offering its fashions online in China during next winter season, extending its e-commerce business to one of the fastest-growing markets for Inditex concepts. During the year, the Group continued to develop its Internet sales platforms and by September 2011 all of its formats had online stores.

"The Group's strategy for siting stores in prime shopping areas, often in well-known buildings, in 2011 materialised in several openings, including new Zara stores on the most coveted shopping streets in Sydney (Pitt Street) and Melbourne (Burke Street) and in the Taipei 101 building in Taiwan's capital. Bershka landed in Japan with a four-storey establishment in the Shibuya district," the company stated.

For the full-year 2011, the company's net income increased 12 percent to 1.93 billion euros (about $2.55 billion) from 1.73 billion euros in the previous year.

EBITDA, a key earnings measure, increased 10 percent to 3.26 billion euros, as net sales grew 10 percent to 13.79 billion euros

The company noted that sales increased in all geographic areas, including Spain, the rest of Europe, the Americas, Asia and the rest of the world.

Net sales in local currencies rose 11 percent, while like-for-like store sales improved 4 percent.

The board will also propose to the Annual General Meeting of Shareholders a 12.5 increase in the company's dividend to a total of 1.80 euros per share. This dividend will consist of a 0.90 euro per share interim dividend payable on May 2 and a 0.90 euro per share final and extraordinary dividend payable on November 2.

Providing an update on its current trading, the company said its store sales in local currencies, adjusted for the calendar effect of an extra trading day in February due to the leap year, increased 11 percent from February 1 to March 14.

In Madrid, Inditex shares are currently trading at 72.22 euros, up 0.48 euros or 0.66 percent.

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by RTT Staff Writer

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