MADRID: Zara-owner Inditex posted a rise in first-half profits thanks to a well-honed business model allowing the Spanish group to beat rivals in whisking new trends to the shop racks.
The world’s largest fashion retailer by turnover, owned by the publicity-shy Amancio Ortega who has become the world’s second richest man, said higher clothes sales and a rise in new stores around the globe drove the eight-percent jump.
Profits rose to 1.3 billion euros ($1.4 billion) in the six months from Feb. 1 while sales were up 11 percent at 10.5 billion euros, said the company which operates eight store brands including Zara, upmarket label Massimo Dutti and teen chain Bershka.
CEO Pablo Isla said the main reason behind the sales jump was “the execution of our business model globally,” with the opening of more than 80 stores in the first half, including in the new markets of Aruba, Paraguay and Nicaragua.
While its competitors prioritize low production costs and outsource manufacturing to China, Inditex makes more than half of its clothes in factories in Spain, Portugal, North Africa, Turkey and Eastern Europe — relatively close to its main markets.
This business model allows it to get clothes to stores much faster than its rivals and avoid excess inventory.
Clothes made for Zara, for instance, can go from the design stage to store racks in a mere two weeks.
By comparison the process takes Inditex’s nearest rival H&M six months because it sources its collection further away in China.
While H&M regularly challenges it for the global number one spot, Inditex is currently the largest fashion retailer by sales, based on the two companies’ first-half results this year.
But Noel Byrne, a business strategy professor at the Madrid branch of Boston’s Suffolk University, warned that the Spanish group was bound to face tighter competition in the coming years as rival retailers adjust their own processes to match its quick delivery times.
“When you are making big profits it is one of the most dangerous times in business because the competition want a share of that, and they smell it and they inevitably come,” he said.
As Inditex continues its push outside of Europe and plans to ramp up activities in China, it will also need to adapt its business model for Asia by opening design and production centers in the continent, Byrne added.
International expansion is crucial for the growth of the group, faced with Europe’s slow economic recovery.
According to a study by the Barcelona-based EAE Business School, China, Russia and South Korea are the countries where clothes spending has increased the most since 2004.
Spain, meanwhile, only represents two percent of global clothes spending, and its share in Inditex’s turnover has gone from 45 to less than 20 percent in just a decade.
Despite the good results, shares in the group fell in mid-afternoon trading due to a mix of profit taking and concern over “growth prospects in the second half that are slightly lower than before,” said Manuel Pinto, an analyst at brokers XTB.
Zara owner Inditex profits rise as business model pays off
Zara owner Inditex profits rise as business model pays off
PIF’s Humain invests $3bn in Elon Musk’s xAI prior to SpaceX acquisition
JEDDAH: Humain, an artificial intelligence company owned by Saudi Arabia’s Public Investment Fund, invested $3 billion in Elon Musk’s xAI shortly before the startup was acquired by SpaceX.
As part of xAI’s Series E round, Humain acquired a significant minority stake in the company, which was subsequently converted into shares of SpaceX, according to a press release.
The transaction reflects PIF’s broader push to position Saudi Arabia as a central hub in the global AI ecosystem, as part of its Vision 2030 diversification strategy.
Through Humain, the fund is seeking to combine capital deployment with infrastructure buildout, partnerships with leading technology firms, and domestic capacity development to reduce reliance on oil revenues and expand into advanced industries.
The $3 billion commitment offers potential for long-term capital gains while reinforcing the company’s role as a strategic, scaled investor in transformative technologies.
CEO Tareq Amin said: “This investment reflects Humain’s conviction in transformational AI and our ability to deploy meaningful capital behind exceptional opportunities where long-term vision, technical excellence, and execution converge, xAI’s trajectory, further strengthened by its acquisition by SpaceX, one of the largest technology mergers on record, represents the kind of high-impact platform we seek to support with significant capital.”
The deal builds on a large-scale collaboration announced in November at the US-Saudi Investment Forum, where Humain and xAI committed to developing over 500 megawatts of next-generation AI data center and computing infrastructure, alongside deploying xAI’s “Grok” models in the Kingdom.
In a post on his X handle, Amin said: “I’m proud to share that Humain has invested $3 billion into xAI’s Series E round, just prior to its historic acquisition by SpaceX. Through this transaction, Humain became a significant minority shareholder in xAI.”
He added: “The investment builds on our previously announced 500MW AI infrastructure partnership with xAI in Saudi Arabia, reinforcing Humain’s role as both a strategic development partner and a scaled global investor in frontier AI.”
He noted that xAI’s trajectory, further strengthened by SpaceX’s acquisition, exemplifies the high-impact platforms Humain aims to support through strategic investments.
Earlier in February, SpaceX completed the acquisition of xAI, reflecting Elon Musk’s strategy to integrate AI with space exploration.
The combined entity, valued at $1.25 trillion, aims to build a vertically integrated innovation ecosystem spanning AI, space launch technology, and satellite internet, as well as direct-to-device communications and real-time information platforms, according to Bloomberg.
Humain, founded in August, consolidates Saudi Arabia’s AI initiatives under a single entity. From the outset, its vision has extended beyond domestic markets, participating across the global AI value chain from infrastructure to applications.
The company represents a strategic initiative by PIF to diversify the Kingdom’s economy and reduce oil dependence by investing in knowledge-based and advanced technologies.
