Zara, the Spanish fashion chain, had sales of more than €17 million in the first full year of trading in its flagship Irish store in Henry Street, Dublin. The shop, in the Roches Stores building, had operating profits in the region of €2.77 million.
The chain's owner, Inditex, has opened about a dozen new stores in Ireland this year under four brand names. In addition to Zara, it owns the Bershka, Massimo Dutti and Pull & Bear brands.
Recent Companies Office filings indicate that the Irish subsidiaries of the group, based in La Coruña, north western Spain, are spending more than €12 million this year on its Irish expansion.
Famous for its tight inventory management, which enables it to bring new fashion lines to market within weeks, Inditex has made rapid inroads in the Irish market since it opened the doors of its first Irish store in November 2003.
From modest beginnings 30 years ago, Inditex runs 2,643 stores in 60 countries. With 323 openings in the nine months to October, Inditex this week reported sales of €4.65 billion in the period and net profits of €520.5 million.
Accounts just filed for Za Clothing Ireland, which operates the Zara business, show that the Henry Street store made pretax profits of €567,383 on sales of €4.96 million in the 11 weeks to the end of January 2004.
In the year to last January, the company made a pretax profit of €2.72 million on sales of €17.52 million. This mostly reflects business in Henry Street because the second Zara store, in Blanchardstown, west Dublin, only opened at the end of its financial year. Za Clothing Ireland spent €3.75 million on the development of new stores in the year to January.
Inditex has made big investments since then in the Dundrum Town Centre, south Dublin, and in new stores at several other Irish locations. Each of its four brands now have stores in Dundrum. Zara is also in Cork and Limerick.
Bershka is in Cork, Blanchardstown and the Jervis Centre in central Dublin. Inditex has also opened Pull & Bear outlets in Drogheda and Sligo.
Inditex is understood to have recently signed contracts to open a Zara store at the Whitewater centre in Newbridge, Co Kildare. Discussions on the possibility of taking an additional unit at Whitewater for a Bershka store are also under way.
The latest Za Clothing accounts show that the company was authorised by Inditex to spend up to €5.52 million opening new stores this year.
The previous accounts show that its annual lease commitment of the Henry Street outlet was €1.8 million. This annual commitment increased to €2.5 million a year later, indicating that the rent on the Blanchardstown store is €700,000 per year.
At the end of January, Za Clothing had three new lease commitments to an annual value of €2.86 million in respect of new stores. Such rents are unlikely to reflect the lease agreements on the Dundrum, Cork and Limerick stores that opened this year as Zara had made separate commitments to spend €2.11 million on two new leases a year earlier.
The locations concerned were not disclosed in the accounts.
Separate filings for Massimo Dutti Ireland show that the capital commitment for its only Irish store, at Dundrum, was €1.45 million.
The annual rent commitment for this outlet is €450,000.
