Digital Transformation Works. Zara Parent Company'S Net Income Rose 12% In The First Nine Months.

Recently, Zara parent company Spanish retail giant Inditex group released the 2019 mid term earnings report before October 31st. Inditex group's net income in the past nine months increased by 12%, from 2 billion 400 million euros in 2018 to 2 billion 700 million euros; sales increased 7.5% to 19 billion 800 million euros; gross margin was 58.2%. Pablo Isla, executive director of Inditex group, points out that the growth of performance is mainly due to the product innovation of its brand, and the high quality service and experience provided by online and offline stores under the support of digital technology.

Source: Inditex earnings

Despite the strong performance and healthy working capital development in the first three quarters, the cash position of the group increased by 17%, but the business mode led to the negative working capital situation. But now the rising trend is a good omen for the group. In the first 9 months of 2019, the number of new stores in Inditex group was 41. As of the end of the reporting period, Inditex group has 7486 stores in 96 countries worldwide. Its brand Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterq u have all implemented the global online operation. Inditex's online and offline integration strategy is still progressing steadily.

The fast fashion industry in 2019 was generally cold. Forever 21 was forced to sell, GAP lost in China, TOPSHOP parent company suffered huge losses, and La Natsu Bell profits fell sharply. The decline of many brands can hardly conceal the industry's cooling. In such a situation, the Inditex group, which is also a fast fashion company, has begun the strategy of digital transformation, and has been affirmed in the three quarter's earnings report.

In the era of rapid information dissemination, whether fast fashion can still attract the attention of the consumer market, more efforts should be made in products and channels. This time, Inditex obviously has get to the market characteristics. Whether Yang Fan can sail on this road in the future depends on whether consumers buy it.