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Inditex Group's First Quarter Net Profit Hit 5 Year Low
< p > > a href= "http://m.pmae.cn/news/index_c.asp" > fast fashion brand < /a > signs of global weakness continue to appear. Spanish brand ZARA and Inditex, the world's largest apparel retailer, reported a net profit of $7.3% in the first quarter ended April at $410 million, the biggest decline in 5 years. < /p >
< p > profit loss is not the first time for the a href= "http://m.pmae.cn/news/index_c.asp" > Inditex < /a >. The earnings report of the company in March also showed that the net profit growth in 2013 was less than 1%. Over the past 3 years, the company has maintained double-digit net profit growth. < /p >
< p > Senior retail expert, Ding Haozhou, President of China business management group, said the decline of Inditex group's performance was mainly due to the rapid expansion of its flagship brand ZARA in the past two years and the increase in product prices, which eventually led to an increase in inventories and a decline in gross margins. < /p >
< p > because the fast fashion's quick advantage in inventory digestion has been obviously weakened, and the core lifeline of the brand has lost its vitality. < /p >
< p > data show that in the past year, the sales cost of < a href= "http://m.pmae.cn/news/index_c.asp" > ZARA < /a > increased by 37.5%, and the administrative cost increased by 146.7%. The growth of operating costs can be seen as a double attack at the time of declining revenue. < /p >
< p > this series of chain reaction is not related to the blind expansion of ZARA. At present, Inditex group has more than 457 stores in China, second only to Spain. < /p >
< p > compared with the fast fashion H&M, the price of ZARA is much more expensive. The price of a dress with a little difference can be up to 200 yuan. Not only that, the quality of products has also been widely criticized. According to incomplete statistics, ZARA has been at least 14 quality blacklists since entering the Chinese market. < /p >
< p > in order to find a breakthrough for the increasingly insignificant core strengths, Inditex announced that its brand ZARA will be in China's online platform Tmall. < /p >
< p > profit loss is not the first time for the a href= "http://m.pmae.cn/news/index_c.asp" > Inditex < /a >. The earnings report of the company in March also showed that the net profit growth in 2013 was less than 1%. Over the past 3 years, the company has maintained double-digit net profit growth. < /p >
< p > Senior retail expert, Ding Haozhou, President of China business management group, said the decline of Inditex group's performance was mainly due to the rapid expansion of its flagship brand ZARA in the past two years and the increase in product prices, which eventually led to an increase in inventories and a decline in gross margins. < /p >
< p > because the fast fashion's quick advantage in inventory digestion has been obviously weakened, and the core lifeline of the brand has lost its vitality. < /p >
< p > data show that in the past year, the sales cost of < a href= "http://m.pmae.cn/news/index_c.asp" > ZARA < /a > increased by 37.5%, and the administrative cost increased by 146.7%. The growth of operating costs can be seen as a double attack at the time of declining revenue. < /p >
< p > this series of chain reaction is not related to the blind expansion of ZARA. At present, Inditex group has more than 457 stores in China, second only to Spain. < /p >
< p > compared with the fast fashion H&M, the price of ZARA is much more expensive. The price of a dress with a little difference can be up to 200 yuan. Not only that, the quality of products has also been widely criticized. According to incomplete statistics, ZARA has been at least 14 quality blacklists since entering the Chinese market. < /p >
< p > in order to find a breakthrough for the increasingly insignificant core strengths, Inditex announced that its brand ZARA will be in China's online platform Tmall. < /p >
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