Strong exposure to the Russian market and galloping inflation which is undermining consumers’ purchasing power and driving up production costs. All sanctioned by a stock market fall of nearly 30% in three months. Not to mention the expansion of online sales to continue and growing ethical and environmental requirements… The challenges are piling up for Marta Ortega, 38 and officially new non-executive president of Inditex since Friday 1er April. However, the young, discreet heiress, whose only known function within the Spanish fashion giant for the past fifteen years has been to “supervise the design” at Zara and work for ” Branding “still has everything to prove.
When the youngest daughter of Amancio Ortega was crowned, by surprise, on November 30, 2021, at the head of the empire founded by her father in the 1970s, we had almost forgotten that Inditex is first and foremost a family business, whose 86-year-old patriarch holds almost 60% of the shares. “We consider this to be the best time to address [cette transition]. Because the company is very solid, has a well-defined strategy and fantastic teams in all areas, which combine youth and experience”, said that day the CEO, Pablo Isla. The Board of Directors then celebrated the strong recovery in sales recorded during the first three quarters of 2021, after a year 2020 marked by the pandemic. To support Marta Ortega, he appoints Oscar Garcia Maceiras, a reputedly brilliant 47-year-old state lawyer from the banking sector, as executive director general.
The tandem is to succeed Mr. Isla, who for seventeen years, first as managing director and then as executive chairman, has held the reins of the world number one in clothing – 165,000 employees and nearly 6,500 stores in 96 countries (Zara but also Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho or Uterque). Artisan of the digital shift of the group, he multiplied his stock market value by ten and his sales by five. The bar is high, but the prospects are then good.
Sales reduced by Omicron and the war in Ukraine
This is counting without the wave caused by the Omicron variant, which amputates sales at the end of the year and dampens the hope of a record profit. If the 2021 results show a 36% increase in sales (to 27.7 billion euros) and 193% in net income (to 3.2 billion), the group has not managed to recover the figure of business in 2019 (– 2%), even less its profits (– 11%). The war launched by Moscow in Ukraine leads, on March 4, to the closure of 502 Inditex stores in Russia. The group’s second market in terms of number of stores, the country accounts for 8.5% of operating income. By adding the 85 stores located in Ukraine, almost 10% of profits before charges, interest and taxes are at risk.
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