Inditex Case Study

“ INDITEX GROUP – ARE ITS “FAST FASHION” RESULTS SPEEDING UP AGAIN AFTER RECENT SLOW DOWNS ? ” This pimponderous con-counterpoise has been written restrictedly for use on the sequence Strategic Financial Skillful-treatment FINA 1035 at Greenwich University Matter School and its companion institutions. It is to be used restrictedly for this sharp-end. No segregate may be copied , emailed or redone for any other sharp-end other than establiscatter counterpoisehead. Abundant of the postulates and esthetic interposed in the pimponderous con-counterpoise is smitten from the annual recitals and sumitys of the Inditex Group, its unreserved statements and from its website . nditex. com. All other commencements are shown in the pimponderous con-over. Author : Scott Duncan Lecturer Greenwich University Matter School July 2010 INDITEX GROUP – ARE ITS “FAST FASHION” RESULTS SPEEDING UP AGAIN AFTER RECENT SLOW DOWNS ? Intr oduction Inditex Knot - the possessor of the Zara shape obligation and the universe’s enlightenedst drapery and raiment knot in provisions of sales - reputed assuring results for its foremost mercy of 2010. The Financial Times reputed in June 2010 1) : “Inditex lent its consequence to hopes of a reanimation in European claim as the continent’s biggest shape obligation delivered intercept-beating foremost-mercy net avail and aged it would be moving its secure-shape intend onthread advancedr this year. Europe’s biggest drapery obligation reputed a 14 per cent result in net sales to €2. 66bn ($3. 2bn) in the three months to the end of April 2010, as net pay rose 63 per cent to €301m in countersepascold to, in segregateicular, claim for its active-shouldered jackets and draped harem trousers. Sales rose 13 per cent from the foundation of February to June. The uptick yields followingcited Hennes & Mauritz in April elevated-minded hopes of reanimation in the European dispose-of sector when it to-boot whack net advantage expectations in its foremost-mercy results and reputed memorials of amendment in the bargain at the initiate of the remedy mercy. Inditex has been upwhack on prospects for the confer-upon year, delay Pablo Isla, pre-eminent magistrate, predicting that selfsame-provide sales enlargement should mold explicit frequently followingcited a denying 2008 and virtually downright 2009. Mr Isla, who dispose-ofs a third of all his robes in Spain, was equeffectual upwhack encircling his abode bargain on Wednesday. [The] existence in Spain is emend than the beneathstanding you may possess. I idiosyncratically possess a brawny dependence in the dynamism of the Spanish arrangement going ready. ” The unseemly room, meanepoch rose to 59. 9 per cent frequentlyst 56. 9 per cent. “[It is] simponderous to transfer to consensus upgrades,” wrote Andrew Hughes, analyst at UBS, in a voice. The divides rose 5 per cent to €46. 11. “Despite concerns of sinferior sales enlargement into the remedy mercy and as the year progresses, the foremost mercy whack [expectations] and brawnyer unseemly room trends should advance than expend,” Mr Hughes extraneous. Analysts to-boot welcomed the tidings that Zara, which stationary moulds a third of all its sales in Spain, would initiate trading onthread at the foundation of September in its ocean European bargains: France, Germany, Italy , Portugal, Spain and the UK. “Onthread should act as a downward security for trading tidings in the remedy half,” wrote Bernstein in a voice. During the epoch, Inditex unreserveded 98 provides in 29 countries, prelude its mode to almost 5,000 provides in 76 nations environing the universe. Ultimate month, it unreserveded its foremost Indian fund in Delhi”. Histor y of Inditex Gr oup 2) Industria de Diseno Textil (Inditex) moulds ill-conditioned chic shapes that are near today and bybygone tomorrow. The Spanish intentioner-cum-retailer uses technology and an armada of intentioners to subdue inextravagant chic. Inditex dispose-ofs on a global lamina, delay counterpoise 4700 funds in 76 countries beneath eight opposed dispose-of stigmas each intlimit opposed customer propositions : Stor e Br and Zara Zara Kids Pull and Bear Massimo Dutti Pr imar y Intend ing Mar ket 3) and Tar get Women’s and men’s robes. Childrens’ robes Boyish women and men’s incidental and “laid end” robes and accessories Men’s and women’s robes for the advance “sophisticated” fundper. To-boot dispose-ofs some effect’s robes Boyish women’s and men’s robes . Stores possess “bitter edge” contempadvanced and are parley sharp-ends for shape, voicelessness and street art Past trends in boyish women’s robes and accessories Women’s beneathwear, lingerie and nightgroove Items for abode eg abode textiles, bedclothes, bathroom and consideration threadn, glassware, cutlery and effect’s bedding Shape accessories eg handbags , footwear, leather consequence and uniform jewellery Bershka Stradivarius Oysho Zara Abode Uterque The firm's provides counter-argument to favorite trends by sharp-ended intentioners in Spain what customers are question for charily. Inditex counterparts in encircling two weeks delay new intentions. Amancio Ortega Gaona, Spain's wealthiest matterman, founded Zara in 1975 and advancedr created Inditex as a avocation community. He got his initiate in the drapery matter at the age of 13, when he went to employment for a topical shirtmaker in A Coruna , Spain, delivering the fund's consequence, which interposed lingerie and surroundings gowns. Ortega employmented his way up to befit an associate supervisor, then fund supervisor, by the hale 1960s. These positions gave Ortega experiment not simply in intermode undeviatingly delay customers but to-boot in purchasing works and other esthetics for the fund's thread of raiment. Inaugurated out of his sister's abode, Ortega began developing his own intentions. One day in the hale 1960s, he hit upon the formula that was to befit convenient to the operations of Inditex: that of reconceding favorite shapes using near extravagant esthetics in command to dispose-of elevatedclaim drapery sstep at inferior appraisements. Ortega left his job and set up in matter delay equiconsultation 5,000 pesetas (the equipollent of $25). Legend has it that Ortega's foremost scheme was to remould a favorite but extravagant surroundings gown. Ortega cut the intention himself, then, delay the acceleration of his copy and sister, began conceding the surroundings gown at his sister's kitchen consideration. Ortega's foremost customer was his antecedent mistress at the shirtmaker's fund. Antecedently hanker, Ortega began provideing the surroundings gown, as polite as a accrueing concatenate of housecoats and lingerie, to other drapery funds in A Coruna. By 1963, Ortega had saved up plenty to unreserved his foremost ingredienty. From manufacturing, Ortega antecedently-crave molded to dispose-of, launching an judicious format for his housecoats and lingerie in the hale 1970s. In 1975, thus-far, Ortega, then 39 years old, hit upon the formula that was to induce him his biggest luck. In that year, Ortega unreserveded a new dispose-of provide denominated Zara, which featured beggarly contemplateaaffect results of favorite, surpassing-end drapery shapes. The provide proved a luck, and the followingcited year Ortega incorporated his matter beneath the spectry Goasam and began unreserveding advance Zara provides in Spain. Despite the provides' accrueing favoriteity, Ortega himself remained decidedly astern the scenes, deserting the spotimponderous and developing a gear for himself as a recluse--no photographs of Ortega were made unreservedly advantageous until 2001. By the hale 1980s, Ortega had begun formulating a new form of intention and dissection mould. The drapery perseverance followed intention and extrication wayes that required hanker transfer stipulations, frequently up to six months, betwixt the judicious intention of a garment and its grant to dispose-ofers. This mould effectively scant constructionrs and distributors to equiconsultation two or three collections per year. Predicting consumer tastes afore of term confer-uponed inbred difficulties, and producers and distributors visaged the true facilitate of beseeming saddled delay unsold schedule. Ortega sought a media of nonobservance the mould by creating what he denominated "instant” or “secure shapes" that undisputed him to undeviatingly counterpart to shifts in consumer tastes and to newly emerging trends. Ortega's reverie remained unfulfilled, thus-far, until he met up delay Jose Maria Castellano. A computer unhesitating, Castellano had employmented in Aegon Epa's counsel technology continuity antecedently beseeming pre-eminent financial swayary for a Spanish helpful of ConAgra. Castellano appended Ortega in 1984 and set to employment developing a dissection mould that revolutionized the global drapery perseverance. Beneath Castellano's computerized method, the community lowly its intention to dissection way to equiconsultation 10 to 15 days. Rather than placing the intention parcel on a solitary intentioner, the community unreserved its own in-house team of intentioners--advance than 200 by the mold of the 21st epoch - who began developing robes naturalized on favorite shapes, epoch at the selfselfselfcorresponding term conceding the community's own intentions. In this way, the team was effectual to counterpart closely instantly to emerging consumer trends as polite as to the claims of the community's own customers - for sharp-end by adding new colors or intentions to hale intentions. State-of-the-art extrication and warehousing procedures, as polite as the installation of computerized schedule methods connection provides to the community's accrueing enumeblame of ingredienties, enabled the community to desert prelude on the facilitate and consummate disbursement of developing and oceantaining a enlightened end schedule. The poorer, advance sympathetic community - which adopted the spectry of Industria de Diseno Textil S. A. , or Inditex, in 1985 - enslaved the regard of Spanish fundpers. By the end of the decade, the community had unreserveded advance than 80 Zara provides in Spain. The community's secure shape mould, which alconjointly rotated its dispose-of fund integral two weeks, to-boot encouraged customers to remold frequently to its provides, delay grant day beseeming notorious as "Z-day" in some bargains. The enlightenment that drapery sstep would not be advantageous for very hanker to-boot encouraged fundpers to mould their dissipations advance undeviatingly. The luck of the Zara mould in Spain led Inditex to the interdiplomatic bargain at the end of the 1980s. In 1988, the community unreserveded its foremost stclass provide in Oporto, Portugal. The followingcited year, Inditex moved into the United States. Luck in that bargain remained uncertain, thus-far, and at the foundation of the 2000s, the community had unreserveded equiconsultation six U. S. provides. A advance receptive bargain for the Zara format existed in France, which Inditex entered in 1990. The community undeviatingly began adding new provides in superior city courages throughout the dominion. Through the 1990s, Inditex extraneous a polite-regulated running of new bargains. The community entered Mexico in 1992, Greece in 1993, Belgium and Sweden in 1994, Malta in 1995, and Cyprus in 1996. In the advanced 1990s, Inditex stepped up the tread of its interdiplomatic dilution, adding Israel, Norway, Turkey, and Japan (the dying in a joint-venture delay a topical companion) in 1997, then, in 1998, moved into Argentina, the United Kingdom, and Venezuela. Epoch the allty of the knot's provides remained community owned, in undeniefficient bargains, such as the Mean East, initiateing in 1998, Inditex's dilution took establish through immunity bonds delay topical distributors. By 2000, Inditex had extraneous another dozen or so countries to its concatenate of operations, including Germany, the Netherlands, and Eastern European bargains including Poland. At the selfselfselfcorresponding term as Inditex pursued its geographic dilution, it to-boot began unfolding elapsed its flagship Zara dispose-of format. The community inaugurated the Kiddy's Class effect's groove format as a subknot of the ocean Zara concept in the hale 1990s. In 1991, the community extraneous an allly new dispose-of format, Pull & Bear, which began providing "urban" shapes. By the foundation of the 2000s, the Pull & Bear obligation had accruen to 300 provides in almost 20 countries; it to-boot done its own spray format, Often, targeting the 20- to 45-year-old men's separate, in 2003. Inditex went upbargain in 1991 when it bought 65 percent of the Massimo Dutti knot. Inditex took liberal repress of Massimo Dutti in 1995 and began architecture it into a obligation of almost 300 provides in 23 countries. Epoch Massimo Dutti appealed to a advance equitefficient men's and women's shapes bargain, the community targeted the boyish feminine bargain in 1998 delay the invention of a new format, Bershka. That dispose-of obligation undeviatingly evolved into a netemployment of advance than 200 provides unhindered in 11 countries. Inditex continued adding new formats at the mold of the 21st epoch. In 1999, the community extraneous Stradivarius, a boy shape obligation confer-upon in nine countries. In 2001, Inditex extraneous its lingerie format, Oysho. In 2003, Inditex moved elapsed the garment commerce for the foremost term, launching its own abode furnishings concept, Zara's Abode and in 2008, inaugurated its shape accessories obligation – Uterque. Meanwhile, Inditex had begun a oppidan extrication as polite. As Ortega approached privacy, and no components of his present family appeared simponderous to yield him in the matter, the community contemplateed to the unreserved bargain to fix its coming. In 2001, Inditex scheduleed its fund on the Bolsa de Madrid, one of the most luckful judicious unreserved intendings of the year. Ortega's sale of advance than 20 percent of his avocation in Inditex made him Spain's wealthiest man. In 2010, he stationary represss 59% of Inditex’s divides (see Subjoin 1) and was ranked by Forbes Magazine as the 9th richest man in the universe in their annual schedule of billionaires – up 1 establish from his ranking in 2009 - delay a net think thinkd at $25 billion. He is now 74 years old. Inditex moved to a new oppidan sectionquarters in Arteixo, delayout of A Coruna in 2000. In 2002, the community began workation on a state-of-the-art logistics courage in Zaragoza. At the selfselfselfcorresponding term, Inditex continued adding to its dress of interdiplomatic bargains, unreserveding provides in Luxembourg, Iceland, Ireland, Jordan, and Puerto Rico in 2001; Switzerland, Finland, El Salvador, and Singapore in 2002; and Hong Kong in 2003. In the 6 years from 2004, Inditex has advance than doubled its enumeblame of provides from equiconsultation counterpoise 2000 in mid 2004 to counterpoise 4600 by 31 January 2010. Inditex’s financial year end is 31 January. In thread delay Inditex’s annual recitals, this pimponderous con-counterpoise attributes to its year consequence 31 January 2010 as “Financial year 2009” or “2009”. Similar abbreviations are made for precedent years . Inditex Gr oup Stor e Enumeblame s and Locations in 2010 At financial year end for Inditex for 2009 - 31 January 2010 - Inditex had 4607 provides as follows: The separateition of Inditex’ s 2009 sales for each of its 8 provide concepts was as follows : Amid the sound, 3983 were community administerd provides and 624 were immunityd – see Subjoin 2 for details. In 2009, 92% of sales were in community owned provides. Geographically, 1900 of the provides were in Spain, 1856 provides were in other European countries, 485 provides were in Asia and Africa and 366 provides were in North and South America – see Subjoin 3 for details. The Knot unreserveded 343 provides in 2009 and resultd its dispose-of netemployment in all of Europe's superior bargains delay voiceworthy enlargement in Russia (37 new provides) and Poland (34). In Asia, Inditex continued its strategic shove into the territory’s top three bargains, which posted weighty enlargement, delay 41 new provides in China, 12 in South Korea and 10 in Japan. Retail sales area resultd by 8% in 2009 – see Subjoin 4 for details by provide concept. During its foremost mercy 2010 from 1 February to 30 April , Inditex unreserveded a advance 98 provides as follows : This took the sound enumeblame of provides to 4705 at 30 April 2010. The percentage of Inditex’s sales consummated in each geographical territory for the ultimate 3 financial years was as follows : 2009 31. 8 % 45. 7 10. 2 12. 2 2008 33. 9 % 44. 8 10. 7 10. 5 2007 37. 5 % 42. 4 10. 8 9. 4 Spain Europe excl. Spain Americas Asia The Mar ket The raiment dispose-of perseverance rests of the sale of all menswear, womensgroove and effectswear. The sector to-boot comprises footwear, sportsgroove and accessories. The mensgroove sector comprises all livery made for men and boys. It comprises twain exterior and beneath livery. The womensgroove sector rests of the dispose-of sale of all women's and girls' livery including dresses, suits and coats, jackets, tops, shirts, skirts, blouses, sweatshirts, sweaters and beneathgroove . Both womensgroove and mensgroove can be separateed by: - sharp-end or use of the drapery sepascold eg incidental groove, requisites, activewear, pompous groove , eespecial create pompous groove and exteriorgroove - age knot - lifestyle eg “sporty”, “conservative ” , “shape conscious” , “hippie”, “urban”, “rural” - ethnic knot styles eg Afro-Caribbean , African American , Asian or mean eastern or voicelessness knot styles eg “rapper”, “reggie”, “punk”, “rocker” - appraisement eg concatenates from low appraisement to extravagant intentioner imprint to restricted “haute couture” of Paris, Milan, London, Tokyo and New York or by a league of these ingredients. The effectsgroove sector is defined as sales of livery for effect betwixt the ages of 0-2 years. The socio-collective environments coupled delay the deficiency for specific and knot oneness moulds dispose-of drapery requisite to consumers. Style, thus-far, is an unembodied concept that defines specifics, is frequently an result of correspondingness and hence very-abundant specificized. Fashion, by its very sort, is unpredictable. The results are steadfast by trends in companionship, intentioners and supposititious industries and are esthetic to active and unpredicconsideration changes. Wnear customer stigma allegiance exists, it is advance simponderous to be to the intentioner than the dispose-ofer, although this is usually towards the top end of the perseverance. Counterfeiting of stigmas is a tenor in segregates of the drapery and accessories perseverance. Mar ket in Eur ope The European raiment dispose-of perseverance grew by 2. 1% in 2008 to gain a treasure of €287. 7billion ($420. 9 billion). Its fresh fact per Datamonitor 4) was as follows : The consumer bargain for drapery and footgroove in the European Union (or EU) has beneathbygone relevant changes in fresh years 5). Arguably, the pristine contact has yield from bargain harshnesss beneath the auspices of the Universe Commerce Organisation (WTO) as a ten-year alterefficient Bond on Textiles and Drapery (ATC) came to an end delay the diminution of textile and drapery memorialificance quotas on 31 December 2004. Delay the dissection of quotas, tnear was an judicious result in arrangementately inextravagant memorialificances of drapery and footgroove into the EU, oceanly commencementating from China. For illustration, in the foremost 40 days followingcited the end of the ATC, memorialificances of trousers from China were 3. 3 stipulations surpassing than during the sound of 2004 and memorialificances of pullovers 4. stipulations surpassing. A bilateral bond betwixt the EU and China (the so-denominated Shanghai Agreement) on a advance, alterefficient epoch during which the enlargement of memorialificances of drapery could be administerd through until the end of 2007 was agreed in June 2005. In observation to commerce harvests, consumer knots and other bodies are increasingly avocation constructionrs and dispose-ofers accounconsideration for ensuring that gregarious standards and employmenting provisions of their suppliers confront interdiplomatic labour standards. Tnear are illustrations of dispose-ofers counterparting to this hurry. For illustration, in October 2007 the Inditex knot identified an Interdiplomatic Frameemployment Bond on oppidan gregarious province delay the Interdiplomatic Textile, Garment and Leather Workers’ Federation (ITGLWF), which expresses the community’s commitment to attributeence adventitious hues at employment throughout their all extrication obligation. Equitefficient commerce garment initiatives possess to-boot been smitten, publicly to fix that a equitefficient appraisement is hired to producers who confront separateiality gregarious, and in some plights environmental, standards and that trading kinsfolkhips betwixt producers and buyers are advance similar, rather than guaranteeing nucleus labour standards. Tnear has to-boot been a countersepascold delayin the EU to concerns encircling environmental and prophylactic outcomes. These concerns possess predominantly consummateed on the use of chemicals (such as dyes, pigments or bleaches in the drapery manufacturing way) and on impair inspire liberate. On 1 June 2007, new parliament on chemicals and their trustworthy use came into harshness athwart the EU. REACH (Registration, Evaluation and Authorisation of Chemicals) aims to rectify the security of cosmical sanity and the environment through the emend and precedent identification of the native properties of chemical substances. Within the EU 5) : - accustomed expense on drapery and footgroove sumityed for 5. 7% of sound accustomed delaydraw expense in 2005 - The stupendous superiority of this, closely three mercys, was gone-by on drapery livery - Spconsequence on drapery and footgroove tended to fuse as a sway of pay, delay the preferefficient pay 20 percent in the 27 countries of the EU devoting 6. 1% of their sound accustomed budget to these results, epoch those in the definite pay 20 percent gone-by 5 % - the divide of sound expense gone-by on drapery and footgroove was publicly abundant surpassing unarranged accustomeds delay subject effect, exaltation to 7. % of the accustomed budget for those accustomeds compexaltation two adults delay subject effect, compared delay 4. 6 % of the budget for solitary living-souls. - Annual expense on drapery and footgroove meand €800 per idiosyncratic in the 27 countries of the EU in 2006, delay unreserved instrument ranging from €100 per idiosyncratic in Romania to €1200 per idiosyncratic in Italy . See Subjoin 5 for details of 2000 and 2006 expense per idiosyncratic. - Counterpoise the epoch from 2000 to 2006 , the tome of drapery and footgroove bought rose in most countries of the EU segregateicularly in the United Kingdom and Poland wnear tomes resultd by counterpoise 40%. In dissimilarity , Germultifarious and Italy reputed delaydraws in the tome of drapery and footgroove bought (the simply component states of the EU to do so). Details are shown at Subjoin 6 for the 6 countries which sumity for counterpoise 70% of the EU’s population – Germany, France, Italy ,UK, Spain and Poland . - Counterpoise the selfselfselfcorresponding 2000- 2006 epoch, whilst consumer appraisements for drapery and footgroove sunk by 0. 1% for the EU counterpoiseall, tnear were existing differences in the “Top 6” countries scheduleed counterpoisehead. The UK narrative appraisement decreases of counterpoise 20% , Poland of counterpoise 15% and Germultifarious of counterpoise 2%, whilst appraisement results were narrative in Italy (over10%) , Spain ( counterpoise 13%) and France ( 1%) - see Subjoin 6. - Betwixt 2007 and 2008 , the tome of drapery and footware bought in the EU counterpoiseall sunk by 0. 5% . France , Italy and Spain narrative delaydraws of counterpoise 2% whilst Germultifarious , UK and Poland narrative results - see Subjoin 6. - In 2008 , UK accustomeds gone-by near on mean per week on drapery and footgroove than at any term elapsed 2001-02 6) - Hale indications are that tomes to-boot demolish in 2009 versus 2008 in Europe. France reputed a year on year decthread of 3. 6% . a) Mar ket Segmentation by Gender and Age Womensgroove sales dominated the European raiment dispose-of perseverance in 2008 4) generating 54. 4% of the perseverance's counterpoiseall revenues - €157 billion ($ 229 billion) . Mensgroove sumityed for 30. 9 % - €89 billion ( $130 billion)- and Infantsgroove the cherishing 14. 7%. Details of womensgroove bargain enlargement and separateation in Europe are shown at Subjoin 7 and of the mensgroove bargain in Europe at Subjoin 8. b) Partition by Superior Countr y Italy sumitys for 19% of the European raiment dispose-of perseverance's treasure , Germultifarious 18. % and the UK 14. 4% . Shares for other countries are shown beneath: c) Mar ket Treasure For ecast The European raiment dispose-of perseverance was intercept by Euromonitor to accrue by simply 1. 3 % in 2009 versus 2008 – including appraisement changes. In 2013, the European raiment dispose-of perseverance is intercept to possess a treasure of €320 billion ($467. 6 billion), an result of 11. 1% from 2008. Details are shown at Subjoin 9. d) Dispose-of Sour ce of Pur prosecutes Consumers in Europe are effectual to dissipation drapery and footgroove from a remote medley and enlightened enumeblame of dispose-ofers, especialised and non- especialised. Speciaschedule drapery and footgroove dispose-ofers compfuse obligations (such as H, C or Zara) and insubject robes provides. Nonspeciaschedule dispose-ofers comprise continuity provides (that possess drapery and footgroove continuitys), hypermarkets and supermarkets, as polite as mail- command dispose-ofers. According to Datamonitor, 69% of dissipations of womensgroove and 55% of dissipations of mensgroove in 2008 was in obligations or insubject speciaschedule drapery, footgroove and accessories funds . Purchases at hypermarkets, supermarkets and discounters sumityed for 19. 5% of womensgroove sales and 12. 1% of mensgroove delay continuity provides prelude a 6. 9% of womensgroove and 24. % of mensgroove in 2008 ( see Annexes 7 and 8). Tnear are publicly surpassing planes of dispose-of eagerness in northern Europe5). The counterpoisewhelming superiority of drapery and footgroove sales in Germany, France and segregateicularly the United Kingdom are made in non-speciaschedule provides. The favoriteity of insubject drapery and footgroove dispose-ofers is considerably surpassing in southern Europe. For illustration, in Italy and Spain, the prominent arrangement of drapery sales was unarranged insubject dispose-ofers (65% and 53 % attributeenceively in 2004), and this conductiveness was equeffectual brawnyer in provisions of footgroove (76 % and 88 % attributeenceively in 2003). Despite these differences, drapery bargains in Europe are publicly beseeming advance concentrated, as drapery obligations, continuity provides and supermarkets/ hypermarkets dispose-ofing drapery and footgroove unreserved observational outlets in multifarious of the countries that possess appended the EU elapsed 2004. Indeed, the structural mould-up of drapery dispose-ofers in the EU has radical considerably counterpoise the elapsed 15 years, according to a 2007 recital on ‘Business kinsfolk in the EU drapery obligation’ carried out for and funded by the European Commission 5). The bargain divide of insubject dispose-ofers in the five enlightenedst EU bargains (Italy, Spain, France, Germultifarious and the United Kingdom, that conjointly sumity for closely three mercys of the EU’s drapery bargain) sunk from 46. 8 % of sound drapery sales to 27. 1 % by 2007. In dissimilarity, tnear was polite-regulated enlargement in the divide of edissection obligations (from 18. 7 % to 25. 1 %), hypermarkets and supermarkets (5. 1 % to 6. 8 %) and emerging formats such as medley provides and enlightened sports obligations (whose divide of drapery sales confusedly rose from 14. 0 % to 27. 2 %). A fresh counterpoiselook on consumer compensation 5) provides advance counsel on the fundping morality of European consumers for drapery and footwear. Advance than half (55. 7%) of those counterpoiselooked in the EU in 2008 replied that they themselves or a component of their accustomed had bought drapery and footgroove in a dispose-of obligation provide, a subordinately surpassing arrangement than for trivial, insubject drapery dispose-ofers (50. 2 %). Continuity provides (30. 7%), supermarkets/ hypermarkets (23. 0 %) and street bargains (16. 3 %) were to-boot favorite establishs for buying robes and footgroove – see Subjoin 10. Furthermore, compared delay a enumeblame of other results, a arrangementately elevated arrangement of European consumers used mail or phone command (8. 0%) or the Internet (6. 1 %) to dissipation drapery and footwear. When purchasing drapery and/or footgroove in 2008, 10. 9 % of EU consumers reputed facing at smallest one tenor 5). The most contemptible lamentation was result gear (69% of unwilling customers) followed by tenors repaying unwanted consequence (9. 2% of counterpartents) then gear of employment supposing (8. 8% of counterpartents). Details are shown at Subjoin 11. This postulates to-boot provides an instinct into consumers’ priorities when purchasing drapery and footgroove . Mar ket in USA Americans gone-by closely $326 billion on drapery and footgroove in 2009 equipollent to simply 2. 98% of ill-conditioned idiosyncratical pay - the definite forforever in U. S. fact. Spconsequence on drapery as a divide of pay has flat in 20 out of the ultimate 22 years, from 4. 78% in 1988 to near than 3% in 2009 - see Subjoin 12 for details . Quality, medley and availforce possess all rectifyd counterpoise the years . The selfselfselfcorresponding applies to footwear. Since 1992, appraisements in public possess fusen by 57%, epoch appraisements for drapery possess flat by 8. 5% - see subjoin 13. Delay weightyly gliding appraisements in actual provisions, drapery has befit advance and advance affordeffectual closely integral year, requiring trivialer divides of US accustomed pay. This has freed up ill-conditioned pay that can now be gone-by on other consumer consequence (eg electronics, pilgrimage, nourishment, etc. ). Mar ket in Asia Pacific 7) The Asia-Pacific raiment dispose-of bargain has been accrueing at a vigorous tread for the ultimate few years. The Asia-Pacific raiment dispose-of perseverance generated sound revenues of $224. pet in 2008, representing a junction annual enlargement blame (CAGR) of 4. 1% for the epoch pning 2004–08. The accomplishment of the perseverance is intercept to rectify advance and to gain a treasure of $259. 6 pet by the end of 2013. Key Dispose-of Competitor s Inditex’s key competitors in Europe comprise : Hennes and Mauritz ( H ) Levi Strauss ( via immunityd and community administerd provides and third segregatey dispose-ofers) Adidas sportsgroove ( including Reebok ). In the UK, key competitors comprise Primark ( a dissection of Associated British Food) , Next, and Marks and Spencer . ASOS. com is a superior dispose-ofer of men’s nd women’s robes and accessories via the internet and is now the UK’s enlightenedst insubject on-thread shape dispose-ofer. Worldwide, key competitors to-boot comprise Gap and “Fast Retailing” (Japanese constructor community of Uniqlo and Asia’s biggest drapery dispose-ofer). In provisions of sales treasure, Inditex counterpoisetook Gap in 2009 and is now the universe’s enlightenedst drapery and raiment dispose-ofer. Digest financial profiles of Hennes and Mauritz, Levi Strauss , Primark and Gap are shown at Annexes 14 ,15 and 16. A fresh condition encircling the confer-upon prospects for “Fast Retailing” is shown at Subjoin 17. Manufactur ing Sour ces – Gener al Key suppliers to the dispose-of drapery perseverance are drapery constructionrs and soundsalers, delay dispose-ofers effectual to commencement from twain. Recently, weighty results in sway consume, dyes & chemical consume and astride exaltation cotton consume possess strengthened supplier sway in an perseverance that relies on the availforce of raw esthetic. The soundsale and drapery manufacturing sectors in most countries, thus-far, are equitablely fragmented. As interdiplomatic commerce liberalizes, drapery constructionrs in the unreserved territorys such as Europe and America visage existing emulation from constructionrs in low-wage territorys such as Asia eg from China. Raiment manufacturing is closely symmetrically strive intensive, due to the awkwardness of automating wayes such as the sewing of livery. ). Key outcome for drapery dispose-ofers in selecting its suppliers comprise : - appraisement and gear - tomes - the force of its suppliers to contend delay unanticipated changes in claim in an perseverance tender to changes in shape - gregarious, collective and environmental hurrys to fix that suppliers in developing countries confront separateiality interdiplomatic holy standards for employmenting, gregarious and environmental provisions. Many superior dispose-ofers such as Inditex, Gap and Primark now beneathadmit symmetrical audits of their suppliers to fix that such standards are met and oceantained and recital their findings as segregate of their oppidan gregarious province in their annual recitals. Manufactur ing Pr ocesses The key wayes used in garment construction are as follows: Cloth manufacturing ( eg cotton or wool) - spinning - weaving - dyeing - intention printing - finishing. Undeniefficient aspects are labour intensive eg sewing . Garment manufacturing from the perfect cloth: - bitter - sewing and constellation - buttons and accessories charity. Tnear possess been multifarious technological harvests in esthetics used counterpoise fresh years including non-iron shirts, washeffectual silk and man- made fibres. Key Aspects of the Inditex Matter Mould 3) A) Counterpoise end The Inditex matter mould has a elevated size of upright integration compared to other moulds unreserved by its interdiplomatic competitors. It covers all phases of the shape way: intention, construction, logistics and dissection to its own administerd provides and has a brawny customer consummate in all its matter areas. The key atom in the organisation is the provide, a careamply intentioned stread conceived to mould customers comforconsideration as they disccounterpoise shape concepts. It is to-boot wnear Inditex obtains the counsel required to adregular the intend to confront customer claims. The key to this mould is the force to adregular the intend to customer desires in the shortest term feasible. For Inditex, term is the ocean ingredient to be considered, counterpoisesection and elapsed extrication consumes. Vertical integration enables Inditex to abridge moldenvironing stipulations and consummate important flexibility, reducing fund to a separateiality and subordinate shape facilitate to the pristine feasible size. B) Intention The luck of Inditex’s collections lies in the force to recognise and assimiadvanced the normal changes in shape, truely intentioning new moulds that counterpart to customer desires. Inditex uses its pliant matter mould to adregular to changes occurring during a suitableness, reacting to them by induceing new results to the provides in the shortest feasible term. The moulds for each suitableness -counterpoise 30,000 in 2009 - are unreserved in their allty by the supposititious teams of the opposed obligations. Counterpoise 300 intentioners -200 for Zara alone- admit their ocean intuition from twain the prevalent trends in the shape bargain and the customers themselves, through counsel floating from the provides. C) Manufacturing A weighty arrangement of extrication admits establish in the Group’s own ingredienties, which oceanly construction the most shapeeffectual livery. The Knot admits frequented repress of work provide, marking and bitter and the ultimate finishing of livery, epoch subcontracting the garment- making sort to speciaschedule firms located predominantly in the North-West of the Iberian peninsula. The Group’s outer suppliers, a elevated percentage of which are European, publicly take the work and other atoms compulsory for making the drapery from Inditex. The enumeblame of livery done and advantageous for sale at Inditex’s provides has accruen as follows from financial years 2005 to 2009 : On 31 January 2010, Inditex had a netemployment of 1,237 suppliers delay which it oceantains sconsideration kinsfolkhips and which are inferior by its Outer Manufacturers and Workshops Command of Conduct. This command describes the separateiality holy, employmenting habit, gear, prophylactic and environmental standards expected of its suppliers and must be reliable to oceantain dispose-of kinsfolk delay the Group. Advance details of Inditex netemployment of suppliers is shown at Subjoin 18. Inditex audits its netemployment of suppliers symmetrically and ceased using 145 suppliers in 2009 and 175 in 2008 consequently of their non-compliance. In 2008, the manufacturing commencements in provisions of tomes of livery done for Inditex were as follows : 46% 11% 36% 5% 2% European Union Non –EU Europe Asia Africa Americas D) Logistics All extrication, regardnear of its commencement, is floating at the logistical consummates for each obligation, from wnear it is as sorted conjointly to all the provides universewide. The dissection admits establish twice a week and each grant symmetrically comprises new moulds, so that the provides are truely refreshing their consequence and intend. The logistics method, naturalized on software intentioned by the community’s own teams, media that the term betwixt receiving an command at the dissection consummate to the grant of the consequence in the provide is on mean 24 hours for European provides and a completion of 48 hours for American or Asian provides. Inditex logistics consummates are located in Arteixo (A Coruna), Naron (A Coruna), Zaragoza, Meco (Madrid), Tordera, Palafolls and Sallent de Llobregat (Barcelona), Leon and Elche (Alicante). Together, their survisage area exceeds one pet counterpoise metres. Advance details are shown at Subjoin 19. In 2008, 700 pet livery were as sorted by 5000 employees at Inditex logistics consummates. E) Stor es In Inditex, the sharp-end of sale is twain the end and initiate of its treasure adding wayes, as the provides act as bargain counsel bunch terminals, providing feedend to the intention teams for each of the 8 formats and recitaling the trends claimed by customers. As dispose-ofers, the provides compose the obligations’ ocean advertising middle. Their pre-eminent personalitys comprise: - Preferred locations in the universe’s ocean fundping streets - Meticulously intentioned window unfolds - Unique inner and outer provide intention - Tailored coordination and unfold of the result - Excellent customer employment. The ocean harvest policy for the Inditex sales formats is the unreserveding of provides administerd by companies in which Inditex is the sepascold or superiority divideholder. In 2009, 86% of provides were own administerd. In trivialer or culturally opposed bargains, the Knot has unlimited the provide netemployment through immunity bonds delay transfering topical dispose-of companies. The ocean personality of the Inditex immunity mould is the sound integration of immunityd provides delay own administerd provides in provisions of result, cosmical instrument, grafting, window- surroundings, inland intention and logistical optimisation. This fixs progression in provide skillful-treatment criteria and a global idea in the eyes of customer environing the universe. F) Other Aspects of Mar keting 1) Internet Each of Inditex’s 8 provide formats has its own website and these are truely updated delay the advancedst shape intendings. In 2009 , the provide websites were inaugurated and interposed in gregarious netinaugurated websites. 2) Affinity card The Intitex Affinity Card is the Group’s reimbursement and allegiance card substantial for its holders in any Knot establishment: Zara, Massimo Dutti, Bershka, Pull and Bear, Stradivarius, Oysho, Zara Abode and Uterque. Advantageous in Spain for advance than 15 years, the Affinity Card is to-boot held by customers in Mexico and Greece wnear it was inaugurated in 2007, and in Portugal wnear it has been advantageous elapsed 2008. Currently tnear are advance than a pet Affinity Card holders in these filthy countries. All of them possess a card that intends financial advantages and methods of reimbursement naturalized on the holders’ deficiencys. Inditex Financial Per for mance A digest of Inditex’s financial accomplishment counterpoise the ultimate 6 years is as follows : Details of Inditex’s : - P for 2006 to 2009 are shown at Annexes 20-22 - sales and contributions by provide format are shown at Subjoin 23 - counterpoise sheets for 2006 to 2009 at Annexes 24 and 25 - 2006 to 2009 consummate mode statements at Annexes 26 and 27. Details of Inditex’s 1st Mercy financial results for 2010 are shown at Annexes 28 and 29. Boar d of Dir ector s Shareholders vulgar the 2009 recital at Inditex’s July 2010 Annual Public Parley including the projected dividend of €748 pet – up 13% on the prior year. Inditex’s divide appraisement determined at €51. 20 on 29 July 2010 – up 38% on its appraisement of €38 a year ago – see Subjoin 30. The consideration of Inditex rested of 9 Directors as at 31 January 2010 – 3 Magistscold Directors and 6 Non Magistscold Directors. The Magistscold Directors are : Amancio Ortega Gaona ( Chairman) Pablo Isla Alvarez de Tajera ( CEO and 1st Deputy Chairman. Appointed to consideration in 2005) - Antonio Abril Abadin ( Consideration Secretary and Public Counsel). Their sound reward was €4. 35 pet in the year ended 31 January 2010. The elder skillful-treatment of Inditex who are not magistscold frequentedors is shown at Subjoin 32. Their sound reward was €10. 9 pet in the year to 31 January 2010. Details of the consideration including the 6 non magistscold frequentedors are shown at Subjoin 31. - Employees Inditex is a multi-cultural and multi-racial community delay 92,301 employees at 31 January 2010 representing advance than 140 unreservedities. On-going grafting plays an requisite role, segregateicularly that of provide staff. This grafting, which to-boot comprises basics in customer employment, consummatees on speciaschedule enlightenment of shape trends and the force to grapple and declare the counsel that provide staff take from customers integral day. The enumeblame of employees has accruen as follows : The enlightenedst percentage are industrious in the provides as follows : Inditex undeviatingly owns 13 textile manufacturing companies in Spain and 12 logistic companies including one for each of its 8 provide formats. Inditex to-boot has its own in-house architecture contractor and divers companies to administer its provide and other properties. These companies are utterly owned by Inditex and their financial results and employee enumerates are liberaly dim in those of the Inditex knot. In 2009 : - 81. 4% of Inditex’s employees were feminine - 18. % were male - 40% of employees were liberal term - 60% were segregate term. Inditex’s Str ategy At his confer-uponation at the July 2010 AGM, Inditex’s Deputy Chairman and CEO, Pablo Isla beneathscored dependence in the Inditex matter mould and its acquitted strategic consummate on interdiplomatic dilution, confer-upsolely targeted at European and Asian bargains. He aged that Inditex has earmarked encircling €570 pet in consummate expense to unreserved betwixt 365 and 425 new provides in its financial year 2010 of which almost 95% achieve be in Inditex’s interdiplomatic bargains delayout Spain. Some 70% of the embezzle contracts possess been identified although in some plights unreservedings may be deceased until 2011. The planned results by provide format are as follows: "Our control is to consummate enlargement in Europe and Asia," said Isla. "We see weighty opportunities in Eastern Europe and the Russian Federation, and tnear is a powerful immanent to unfold advantageably in Europe for multifarious years, as our bargain divide is beneath 1% in most countries. " He said the ocean areas of enlargement for Asia are China, Japan and South Korea. "We see stupendous hanker-term immanent for Inditex in Asia bargains," he said. Over the contiguous three years, the community expects to see stread enlargement of betwixt 8% and 10%. Isla was asked precedent by analysts why they aren't paying out an equeffectual bigger interest of net pay in dividends loving the knot's stupendous consummate counterpoise. "Our ocean control is to endue in the coming enlargement of the matter. We symmetrically absence a elevated plane of flexibility - we symmetrically absenceed advance polite-regulated enlargement in the dividend, rather than big jumps," he said. He to-boot aged that Zara achieve initiate onthread sales in France, Germany, Italy, Portugal, Spain and the UK on 2 September, 2010. Key Outcome to be Consider ed Is Inditex’s confer-upon policy simponderous to yield . If so why ? Or do you terminate that the policy deficiencys to be adjusted in imponderous of your separateition of this pimponderous con-counterpoise ? If so, what changes do you intend and why ? References : 1) 2) 3) 4) FT condition 9 June 2010 Answers. com 2010 Inditex Press dossier 2009 Datamonitor “Apparel dispose-of in Europe” August 2009 . The perseverance treasure is conducive at dispose-of dispose-ofing appraisement (RSP), and comprises all taxes and levies. The postulates for Europe comprises Russia, Poland, Czech Republic, Hungary, Romani and Ukraine. All prevalence conversions in the Datamonitor recital and intercepts possess been conducive at true 2008 annual mean modify blames. 5) European Commission recital “ Consumers in Europe” 2009 publiscatter by Eurostat 6) UK Appointment for Unreserved Statistics January 2010 7) Datamonitor recital “Apparel dispose-of in Asia Pacific” August 2009 Shar eholdings of Dir ector s in Inditex as at 31 J anuar y 2010 Subjoin 1 Subjoin 2 Subjoin 3 Page 1 Subjoin 3 Page 2 Subjoin 4 Sales Ar ea by Stor e Concept – Squar e Metr es Totals 2,180,889 1,914,493 EU Expenditur e on Robes and Footgroove - € per section 000 Countr y EU (27 countries) 700 Belgium 700 Bulgaria N/A Czech Reunreserved 200 Denmark 800 Germultifarious 800 Estonia 200 Ireland 900 Greece 600 Spain 600 France 700 Italy 1100 Cyprus 800 Latvia 200 Lithuania 100 Luxembourg1100 Hungary 100 Malta 500 Netherlands 800 Austria 1100 Poland 200 Portugal 600 Romania N/A Slovenia 400 Slovakia 100 Finland 600 Sweden 700 United Kingdom 1000 Memo : Turkey 300 Iceland 1100 Norway 900 Switzerland 900 2006 800 800 N/A 300 N/A 800 400 900 800 700 700 1200 900 N/A 400 1100 200 400 800 1100 200 N/A 100 500 200 800 N/A 1100 300 1100 N/A 900 Annex 5 Commencement : “Consumers in Europe” 2009 edition publiscatter by Eurostat , the statistical appointment of the European Commission Pr ice and Tome Changes delayin Accustomed Expenditur e on Drapery and Footgroove - EU Aver age and Selected Countr ies (a) Subjoin 6 Germultifarious France Italy UK Spain Poland EU Mean (b) Cumulative Percentage Appraisement Increase/(Decrease) 2000-6 (2. 6) % 0. 1 10. 4 (23. 5) 13. 3 (15. 7) 0. 1 % Cumulative Percentage Tome Increase/(Decrease) 2000-6 (1. 7) % 5. 8 (8. 3) 44. 5 2. 7 44. 3. 5 % Percentage Tome Increase/Decrease) 2006 -7 2007 -8 3. 1% 1. 7 0. 1 2. 7 4. 5 4. 5 2. 0% 1. 4 (2. 1) (2. 6) 4. 4 (2. 5) 11. 2 (0. 5)% (a) = The 6 countries sumity for counterpoise 70% of sound EU population (b)= counterpoise the 27 component countries Eur opean Mar ket for Womensgroove Subjoin 7 Subjoin 8 Eur opean Mar ket for Mensgroove Eur opean Appar el Mar ket Treasure For ecasts Subjoin 9 Page 1 Eur opean Appar el Mar ket Treasure For ecasts Subjoin 9 Page 2 EU Drapery and Footgroove Sour ces of Pur prosecute 2008 Subjoin 10 Note that these figures readvanced to trips made by consumers purchasing drapery and footwear, and they do not ruminate the mean expense or treasure of sales made in each dispose-of format Customer Complaints - Pr oblems visaged by Consumer s when Pur chasing Drapery or Footgroove in the EU in 2008 Per centage shar e of those exper iencing pr oblems (multiple counter-argument s undisputed) Subjoin 11 Source: ‘Retail compensation counterpoiselook’, IPSOS for the European Commission, August/September 2008 USA Drapery and Footgroove Mar ket Subjoin 12 Subjoin 13 USA Mar ket – Consumer Pr ice Index Changes Subjoin 14 Summar y Financial Pr ofiles of Selected Appar el Retailer s H - 1738 provides in 33 countries as at November 2008 Levi Strauss Gap Past results for Gap for its financial year ended 31 January 2010 (“Fiscal Year 2009”) are shown in contiguous subjoin . At mean 2009 register year modify blames of US $ 1. 3948 = €1 , Gap’s net sales soundled € 10,179 pet in 2009 – some €900 pet inferior than Inditex’s sales of €11,083 pet for the selfselfselfcorresponding epoch ended 31 January 2010 . January 2010 mean modify blame was US$ 1. 4272 = €1 Modify blame commencement : Banque de France Subjoin 15 Commencement : The Gap Inc. annual recital and sumitys Subjoin 16 Enumeblame of provides : 191 Enumeblame of provides unreserveded in year : 12 - 5 in Spain -4 in the UK - 1 in each of Netherlands, Germultifarious and Portugal ( foremost Primark provides in each dominion) Planned provide unreservedings in contiguous year : 11 ( including foremost provide in Belgium) Selling stread : 5. 9 pet counterpoise feet - an result of 9% versus prior year Pr imar k – Key Postulates for Year Ended 12 September 2009 Revenue for year : ? 2314 pet ( ? 1933 m in prior year) Year on year sales enlargement : 20 % - segregately result in dispose-ofing stread - segregately affect- for- affect sales enlargement of 7% Unhindered advantage for year : ? 252 pet ( ? 233 pet in prior year) Commencement : ABF annual recital and sumitys Subjoin 17 Cur fissure Prospects for Uniqlo’s constructor “Fast Retailing” Tadashi Yanai - the superintendent of Secure Retailing, Japan’s wealthiest man (net think $9. 2bn), has seen the treasure of his 27 per cent avocation in the Uniqlo constructor gravitate by advance than a mercy this year. That’s a slump three stipulations worse than the benchmark, making Asia’s biggest clothier the worst-performing dispose-ofer athwart the territory. Having watched new threads affect polo shirts and jeans miss to fly off the shelves, equeffectual followingcited precipitous appraisement cuts, Yanai-san is now betting big on camisoles, leggings and Silky Dry, a summer statement of its blockbuster heat-trapping beneathwear. This is no settled poor attraction sales enlargement slowed the most in filthy years in the three months to May, causing Secure Retailing to deck its net pay think for the year consequence August by 5 per cent. Nimbler rivals such as United Arrows (up 22 per cent elapsed the foundation of the year) and Honeys (+143 per cent), twain betwixt 30-40 stipulations trivialer by bargain consummateisation, achieve absence to fix Uniqlo’s discounting continues. For all its favor to elevate counterpoiseseas – this year it extraneous provides in China and Russia to its UK, US, France and South Korean portfolios – the community is on sequence to get 95 per cent of this year’s unhindered pay from anaemic Japan. It debris a harsh fund to disencumber, though. Not simply are Secure Retailing’s repays on endueed consummate accordingly encircling 50 per cent emend than peers’, it is that ratey romance in Japan: a fund think a fifth advance today than it was ten years ago (counterpoise which epoch the Nikkei has scatter advance than two-fifths). BACKGROUND NEWS Japan’s Secure Retailing on Thursday cut its annual outcontempadvanced for the foremost term in three years followingcited the breakneck tread of enlargement at its Uniqlo budget shape obligation came screeching to a stop in fresh months, recitals Reuters. Fast Retailing enjoyed brawny sales ultimate year equeffectual as other dispose-ofers were hit by infirm consumer spending, calling frugal fundpers delay hit results affect heat-trapping beneathgroove and savvy bargaining. But Uniqlo’s selfsame-provide sales possess been on the decthread in the remedy half of the confer-upon financial year to August 31st, which some analysts see as a memorial that the fresh circular of vigorous enlargement has run its sequence. Commencement - FT condition Published: July 8 2010 Subjoin 18 Details of Inditex Suppliers Key supplier countries comprise Bangladesh, India, Turkey, Morocco , Spain, Portugal and Cambodia (Source : 2008 annual recital) Annex 19 Inditex Logistics Centr es in 2009 Inditex Pr ofit and Loss Totality for Financial Year s 2009 and 2008 Subjoin 20 Notes attribute to details in Inditex annual recital for 2009 – see Inditex. com/investor kinsfolk/annual recitals/2009 Unhindered Expenses rested of 2009 - €m 2008 - €m 2007-€m 2006- €m Staff consumes 1,791 1,703 1,473 1,251 Provide gear 1,134 1,028 855 718 fissureal consumes Other Provide 1,027 976 898 831 unhindered consumes, logistics and public counterpoisesection consumes a) 3,953 3,708 3,226 2,800 a) = Including conveyance of consequence from logistic consummates to provides Subjoin 21 Details of “Financial Results” shown in Inditex P& L “Financial Results” shown in the dim P& L rest of ( €000) : And for 2007 and 2006 : Inditex Pr ofit and Loss Totality for Financial Year s 2007 and 2006 ( in €000s) Subjoin 22 Net Sales Consume of consequence Unseemly Advantage Unhindered Expenses Other net unhindered expenses & pay Oper ating Pr ofit (EBITDA) Amortization and Depreciation Oper ating Pr ofit (EBIT) Financial Results Equity Accounting Losses Pay Befor e Taxes Pay Tax Net Pay Net pay attribuconsideration to minority interests Net Pay Attr ibuconsideration to the Par ent Earnings per divide (€cents) Notes attribute to details in Inditex annual recital for 2007 – see Inditex. com/investor kinsfolk/annual recitals/2007. Details of Unhindered Expenses and “Financial Results” are shown in precedent subjoines Sales and Pr ofit Contr ibutions by Stor e For mat 2007- 2009 Provide Format No. of Stores at 31 Jan 2010 1608 626 497 651 515 392 261 57 4607 Net Sales in Financial Year 2009 €m 7077 771 790 1177 702 280 243 44 11084 Subjoin 23 Zara (incl Zara Kids) Pull and Bear Massimo Dutti Bershka Stradivarius Oysho Zara Abode Uterque Totals Operating Advantage EBIT in 2009 €m 1105 101 117 196 149 38 25 (2) 1729 Provide Format No. of Stores at 31 Jan 2009 1520 583 470 591 456 374 239 31 4264 No. of Stores at 31 Jan 2008 1361 519 426 510 381 290 204 0 3691 Zara (incl Zara Kids) Pull and Bear Massimo Dutti Bershka Stradivarius Oysho Zara Abode Uterque Totals Provide Format Net Sales in Financial Year 2008 €m 6824 720 722 1026 633 242 222 17 10407 Net Sales in Financial Year 2007 €m 6264 614 696 925 521 213 201 0 9434 Unhindered Advantage EBIT in 2008 €m 1067 119 108 155 144 21 14 0 1628 Unhindered Advantage EBIT in 2007 €m 1091 99 106 154 119 40 16 0 1625 Zara (incl Zara Kids) Pull and Bear Massimo Dutti Bershka Stradivarius Oysho Zara Abode Uterque Totals Inditex Counterpoise Sheets for Financial Year s 2009 and 2008 Subjoin 24 Notes attribute to details in Inditex annual recital for 2009. The divide consummate of Inditex amounts to €93. 5 pet separated into 623. 3 pet divides each delay a par treasure of 15 Eurocents – liberaly subscribed and hired – at 31 January 2010 . This has remained unradical elapsed Inditex’s financial year 2006 Inditex Counterpoise Sheets for Financial Year s 2007 and 2006 Annex 25 Notes attribute to details in Inditex annual recital for 2007 Inditex Consummate Mode Statements for 2009 and 2008 Subjoin 26 Subjoin 27 Inditex Consummate Mode Statements for 2007 and 2006 Inditex Gr oup P& L for 1st Quar ter s 2010 and 2009 Subjoin 28 Subjoin 29 Inditex Gr oup Counterpoise Sheet for 1st Quar ter s Consequence 30 Apr il 2010 and 2009 Inditex Shar e Pr ice fr om August 2009 to J uly 2010 Subjoin 30 Commencement : Inditex. com/ Investor Kinsfolk Subjoin 31 Boar d of Dir ector s of Inditex as at 31 J anuar y 2010 The 6 Non Magistscold Directors are : - Flora Perez Marcote ( representing Gartler S. L. , the avocation community repressled by Mr Ortega Gaona and owning equiconsultation counterpoise 50% of Inditex’s divides) - Carlos Espinosa de los Monteros Bernaldo de Quiros ( consideration component from 1997) - Francisco Luzon Lopez ( consideration component from 1997) - Irene Ruth Miller ( consideration component from 2001) - Juan Manuel Urgoiti Lopex de Ocana ( consideration component from 1993) - Jose Luis Varquez Marino ( consideration component from 2005) Elder Skillful-treatment of Inditex as at 31 J anuar y 2010 Subjoin 32