Digital Transformation Works, Zara's Parent Company's Net Income Rose 12% In The First Nine Months

Date:Dec 13, 2019

Recently, INDITEX group, the Spanish retail giant of Zara's parent company, released its mid-2019 financial report as of October 31. INDITEX group's net income in the previous nine months increased by 12%, from 2.4 billion euros in 2018 to 2.7 billion euros; sales increased by 7.5% to 19.8 billion euros; gross margin was 58.2%. Pablo Isla, executive chairman of INDITEX group, pointed out that the growth of performance was mainly due to the product innovation of its brands, as well as the high-quality service and experience provided by online and offline stores with the support of digital technology.

Although the group's cash position increased by 17% due to strong performance and healthy working capital development in the first three quarters, the working capital position remained negative due to the business model. But now the upward trend is a good omen for the group. In the first nine months of 2019, INDITEX group added 41 stores. As of the end of the reporting period, INDITEX group has 7486 stores in 96 countries around the world. Its brands Zara, pull & bear, Massimo dutti, Bershka, Stradivarius, oysho, Zara home and uterq ü e all realize global online operations. Now INDITEX's online and offline integration strategy is still in steady progress.

In 2019, the fast fashion industry was generally in cold weather. Forever 21 was forced to sell, gap lost in China, Topshop's parent company suffered a huge loss, and laxabel's profit fell sharply The decline of many brands can hardly hide the cooling of the industry. In this situation, INDITEX group, which is also a fast fashion enterprise, has opened a digital transformation strategy, and has been affirmed in the third quarter's financial report.

In the era of rapid information dissemination, whether fast fashion can still attract the attention of the consumer market, more efforts should be made in products and channels. This time, INDITEX has obviously got this feature of the market. Whether it can sail on this road in the future depends on whether consumers pay for it.