CANBERRA: Spanish clothing giant Zara has generated sales of $222 million over one year in Australia, sending profits soaring and rewarding itself with $55 million in dividends. Spanish clothing giant Zara has seen its Australian sales soar by almost 25 per cent in the last year, sending its profits soaring and allowing it to reward investors with $55 million in dividends. Zara sells clothing, footwear and accessories and is among the highest-profile international retailers to enter Australia in recent years. The fast-fashion chain began trading in April 2011, and now employs more than 1100 employees across 15 stores.
Accounts lodged with the corporate regulator show Group Zara Australia’s revenue soared by 24 per cent to $222 million for the year ended 31 January 2016, thanks in part to two new stores, in Brisbane and Miranda, in NSW. The Australian business reported a full-year profit of $15.26 million, up from $10.2 million the previous year. Earnings before interest and tax jumped to $23.6 million, from $15.5 million. One rival said a 10 per cent return was good, but not great. “They’re better than the average apparel business, but not outstanding,” the retail veteran said of the results.
“Australians got excited about it coming here, but there is a perception that the quality has gone down. On the plus side, there’s a little bit for everyone there: men in their 20s can find something smart and there are also clothes for older people. It stretches across the demographics.”
The accounts also appear to show Solomon Lew’s son Peter Lew has halved his stake in Group Zara Australia, with Spain’s Inditex Group increasing its stake in the business by 10 per cent to 90 per cent. Mr Lew remains a director. Zara Holdings and Mr Lew’s International Brand Management received $55 million in dividends in the 2016 financial year, from zero the year before.
By contrast, Swedish rival H&M Australia last reported a tripling in half-year sales to 500 million krona, or $78 million, while Japanese clothing giant Uniqlo said yearly sales had jumped almost 300 per cent to $118.9 million although it remained unprofitable.
Fashion retailers are preparing to wrap up their stocktake sales, which have been boosted by the late arrival of winter finally driving demand for jumpers and coats. The recent disappointing official retail figures showed footwear and other personal accessory sales rose by a strong 3.6 per cent in April, seasonally adjusted, while clothing sales fell 0.9 per cent.
