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So here are more ways on how fast fashion is starting to fizzle out, while slow fashion starts to take over.
According to BOF, Inditex, the fashion giant behind Zara, has been on a roll for the past few years, but its latest sales report shows a bit of a slowdown. In the first weeks of its new financial quarter (February 1 to March 10), sales only grew by 4%—a big drop from the 11% growth it saw in the same period last year. Investors didn’t take the news well, and the company’s stock tumbled over 8% in early trading.
Why Are Inditex Sales Growth Slowing?
Zara has been outpacing competitors like H&M, helping Inditex’s stock price double in the past three years. But now, with consumer demand softening—especially in the U.S., the company’s second-biggest market—sales aren’t climbing as quickly as before.
Analysts had predicted an 8.8% sales growth for the first quarter, so Inditex will need to pick up the pace to meet those expectations. CEO Oscar Garcia Maceiras isn’t too worried, though. He pointed out that the company had massive growth over the past two years, so a slower start this season isn’t necessarily a red flag.
The Bigger Picture: What’s Affecting Consumer Spending?
One major factor impacting Inditex sales is the uncertainty in the U.S. economy. With ongoing trade tensions involving China, Mexico, and Canada, American shoppers are feeling the strain. While Inditex hasn’t directly blamed these issues, the overall weaker demand in the market suggests it’s playing a role.
Despite the short-term challenges, Inditex still pulled in €38.6 billion ($42.07 billion) in sales last year, a 10.5% increase. The company remains confident about the future, even as experts warn that the days of rapid sales growth might be behind it.
Inditex’s Plan Moving Forward
Inditex isn’t slowing down when it comes to investing in its future. The company is spending €1.8 billion this year to upgrade stores, improve online shopping, and expand into new markets. It’s even experimenting with new store concepts—like adding a coffee shop inside a Zara menswear store in Madrid.
The brand is also continuing its global expansion, with plans to open its first stores in Iraq and launch its Bershka brand in Sweden. Meanwhile, Oysho, its sportswear and loungewear brand, is making its debut in the Netherlands and Germany.
On the financial side, Inditex is rewarding its investors by increasing its dividend by 9% to €1.68 per share, signaling confidence in its long-term profitability.
Final Thoughts
While Inditex’s sales growth isn’t as fast as before, the company is still in a strong position. It’s investing heavily in logistics, store upgrades, and new markets, which should help it stay ahead in the competitive fashion industry. The real question is whether consumer demand will bounce back in the coming months—or if this slowdown is the beginning of a new normal for the fashion giant.
What do you think? Is Inditex just hitting a temporary roadblock, or are shoppers moving on to other brands? Let’s chat in the comments!
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