Zara'S Parent Company, Fast Fashion Giant, Has A Record Rent In 2018 Fiscal Year.

According to documents submitted to the National Securities Market Commission, the rental of Zara (SA LA)'s parent company, Spain's fast fashion giant Inditex SA (hereinafter referred to as "Inditex") in fiscal year 2018 has reached a record level - close to 2 billion 400 million euros.

In the 2018 fiscal year ending January 31, 2019, although sales in the global economy and retail industry were sluggish, sales of Inditex group increased by 3% to 26 billion 140 million euros compared to the same period last year. The growth rate of the group was 7% higher than that of the previous year, breaking through the 26 billion euro mark for the first time.

(see "ornate" report: online channel power, Zara parent company, fast fashion giant Inditex sales breakthrough 26 billion euro for the first time)

In the 2018 fiscal year, Inditex invested 2 billion 392 million euros in the rental of stores, an increase of 1.4% over the previous year, accounting for 9.15% of total sales.

In the financial year, Inditex opened 56 new stores, with a total number of stores of 7490.

In 2018, the newly opened Inditex store area increased by 39% compared to 2017, of which Zara's new store area grew by 50%.

Because the business of Inditex is distributed in 96 different countries around the world, each country has different regulations relating to leasing, so the specific leasing terms of different stores in Inditex group differ widely.

In most cases, the rental of Inditex stores is fixed monthly payment, and Inditex will be adjusted and recorded according to inflation or market price and exchange rate. However, some Inditex stores will pay rent according to a certain proportion of sales.

The length of Inditex stores is generally between 10 and 15 years. Most stores have the right to extend the lease after the expiration of the first contract.

In the 2018 fiscal year ended January 31, 2019, the core financial data of Inditex are as follows:

Sales increased by 3% to 26 billion 140 million euros, unchanged from 7% at the same rate.

Gross profit rose 4% to 14 billion 800 million euros, and gross margin increased 39 basis points to 56.7%.

EBITDA (profit before depreciation and amortization) increased by 3% to 5 billion 500 million euros, up 11% from the fixed exchange rate, reaching the highest level in history. The main reason is that the group has reduced the number of discount promotions, and the profit margin has improved.

Net profit increased 2% to 3 billion 440 million euros, up 12% from the same rate.