Zara-owner Inditex reports profits up 32%

The world's biggest clothing group, Spanish titan Inditex, reported Tuesday a profit surge in the first half of 2012 as brands including Zara spread across Asia and the Americas. Net profits leapt 32 percent from a year earlier to 944 million euros ($1.23 billion) in the six months, said the group founded by billionaire Amancio Ortego, who stepped down last year. Under the chairmanship of Ortega's former deputy Pablo Isla, the group said it was managing to keep a "tight control" of operating expenses even as sales boomed 17 percent to 7.2 billion euros. As a proportion of sales, operating expenses eased to 37.16 percent from 38.04 percent. Investors cheered the results, sending Inditex shares up 4.41 percent to 95.99 euros in morning trade on the Madrid stock exchange. Inditex said it opened 166 stores in the first half of 2012, including Zara, Pull and Bear, Stradivarius, Bershka, Oysho, and Massimo Dutti, barely easing up from the year-earlier pace of 177 openings. As a result, the group now relies on recession-bound Spain for only 22 percent of its sales, down from 26 percent a year ago. Outside Spain, the troubled European economy accounted for 44 percent of overall sales, down from 45 percent a year before. The Americas accounted for 14 percent of Inditex global sales, up from 12 percent a year earlier, and Asia and the rest of the world for 20 percent, up from 17 percent. The first Zara shop opened in 1975 in La Coruna in northwestern Spain, still its headquarters. It employs more than 109,000 people worldwide and has been credited with inventing the 'fast fashion' phenomenon.